Hess Cuts 2020 Output Forecast Slightly Due to Hurricanes, Lower SE Asia Production

Yajush Gupta and Shariq Khan
Wednesday, October 28, 2020

U.S. oil and gas producer Hess Corp reported a bigger-than-expected quarterly loss on Wednesday and slightly lowered its full year production forecast, as its operations were hit by hurricanes in the Gulf of Mexico and lower production in South East Asia, sending its shares down 3.1% in early trade.

The company and its peers have lowered capital spending this year as part of larger cost cutting measures in order to keep their expenses in check, as they try to cope with record plunges in crude prices due to the pandemic through March and April.

The company cut its exploration and production (E&P) budget for the year to $1.8 billion from an earlier revised estimate of $1.9 billion. Its E&P budget is now down 40% from the $3 billion originally allocated for the year.

Brent was trading at $39.58 per barrel and is down about 40% this year.

The New York-based company said its total production, excluding Libya, rose 10.7% to 321,000 barrels of oil equivalent (BOE) per day, partly due to contribution from the Liza field in Guyana which came online in December 2019.

Average selling price for the company's crude oil fell to $36.17 per barrel.

Excluding items, the company reported a loss of 71 cents per share, wider than analysts' average estimate of 67 cents per share, according to Refinitiv IBES data.

Hess said it now expects 2020 production, excluding Libya, to total around 325,000 BOE per day, compared with its earlier estimate of 330,000 BOE per day.

Morgan Stanley analysts said that besides the storms, the lower forecast could indicate that Hess' Guyanese consortium with Exxon Mobil Corp does not expect Liza I to hit nameplate production capacity of 120 million barrels of oil per day until late in the fourth quarter. 

(Reporting by Yajush Gupta and Shariq Khan in Bengaluru; Editing by Rashmi Aich)

Categories: Finance Energy Activity Production Asia North America Gulf of Mexico

Related Stories

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

MDL Secures Cable Laying Job in Asia Pacific

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Brownfield Output Decline Accelerates, says IEA

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

Saipem Bags $1.5B Contract for Türkiye Largest Offshore Gas Field

CNOOC Brings Online Another Oil and Gas Project in South China Sea

Seatrium Makes First Turnkey FPSO Delivery to Petrobras

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Current News

Shell’s Brazil-Bound FPSO Starts Taking Shape

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com