Hess Corporation which holds a 30 percent interest in the Stabroek Block has reported a net loss of US$2.4B or US$8 per common share, in the first quarter of 2020, including impairment and other after-tax charges of $2,251 million, resulting from the low price environment, compared with net income of US$32 million or US$0.09 per common share, in the first quarter of 2019.
This was disclosed by company officials during Hess’ 2020 first quarter earnings call. In response to the resulting sharp decline in oil prices, the Corporation said its focus is on preserving cash and capability while protecting the long-term value of its assets. To do this, Hess said it has further reduced its capital and exploratory budget for 2020 to US$1.9 billion, a 37 percent reduction from the original budget of US$3.0 billion.
Chief Executive Officer for the oil giant, John Hess, said that this reduction will be achieved primarily by shifting from six rigs to one rig in the Bakken Project in the USA and deferring discretionary spending across the portfolio, including a six to 12-month deferral in the development of the Payara Field and reduced 2020 drilling activity on the Stabroek Block offshore Guyana.
The CEO said, “Our priorities in this low price environment are to preserve cash, preserve capability and preserve the long term value of our assets. Our company is in a strong position to manage through this market downturn and to prosper when oil prices recover.” Hess said he is confident that the company would be able to recover given its low cost of supply and high return investments which he said are expected to drive material cash flow growth and increase financial returns.
