In a noteworthy financial report today, renowned American oil producer, Hess Corporation, disclosed that it made a net income of US$119 million, equivalent to US$0.39 per share, during the second quarter of 2023. However, this figure marks a significant decrease compared to the net income of US$667 million, or US$2.15 per share, achieved in the same period of 2022.
The company attributed the decline in adjusted after-tax results to lower realized selling prices, causing a substantial impact on their profit margin. Despite this setback, Hess emphasized the favourable performance of its assets in Guyana and the Bakken, USA, as they delivered higher production volumes during Q2 2023, providing some respite from the challenges.
Hess informed investors that their net production surged to 387,000 barrels of oil equivalent per day (boepd) in Q2 2023, compared to 303,000 boepd in Q2 2022, primarily due to increased production in Guyana and the Bakken.
Regarding the Bakken assets, the company reported a significant boost in net production, reaching 181,000 boepd in Q2 2023 compared to 140,000 boepd in the same quarter of the previous year. The surge was attributed to enhanced drilling and completion activity, higher Natural Gas Liquid (NGL) and natural gas volumes, and improved uptime after weather-related disruptions in the prior-year quarter.
Anticipating further growth, Hess projected the Bakken’s net production to range between 175,000 boepd and 180,000 boepd for the entirety of 2023, surpassing the previous guidance range of 165,000 boepd to 170,000 boepd.
Turning attention to the Stabroek Block, where Hess holds a 30 percent working interest, the company reported impressive net production from the Liza Destiny and the Liza Unity floating production, storage, and offloading vessels (FPSOs). In Q2 2023, net production totaled 110,0002 bopd, a significant increase from the 67,0002 bopd recorded in the prior-year quarter.
Hess also proudly highlighted the successful production capacity of approximately 220,000 gross bopd achieved by the Liza Unity FPSO in July 2022. Additionally, during Q2 2023, the company managed to sell nine cargos of crude oil from Guyana, up from six cargos in the same quarter of the previous year.
Furthermore, Hess raised the net production guidance for Guyana for the full year of 2023, projecting approximately 115,0002 bopd, surpassing the previous guidance range of 105,000 bopd to 110,000 bopd.
Hess also provided updates on its future projects within the Stabroek Block. The Payara development project, with a production capacity of approximately 220,000 gross bopd, is on track for startup early in the fourth quarter. Meanwhile, the Yellowtail project, sanctioned in April 2022, is expected to achieve a production capacity of approximately 250,000 gross bopd with first production anticipated in 2025. Similarly, the Uaru project, sanctioned in April 2023, is projected to achieve a production capacity of approximately 250,000 gross bopd with first production anticipated in 2026.
Hess clarified that the expiration of the first renewal period of the exploration license for the Stabroek Block has been extended by one year, from October 2023 to October 2024, due to force majeure triggered by the COVID-19 pandemic. As a consequence, the company will be required to relinquish 20 percent of the block not held by discoveries by the following year.
Despite the decline in net income, Hess emphasized its strategic investment in Guyana and the Bakken, with exploration and production expenditures totaling US$933 million in Q2 2023, compared to US$622 million in the previous year’s quarter. CEO John Hess firmly believes that these investments will pay off, particularly in Guyana, where numerous significant discoveries of low-cost barrels have been made.
Remaining committed to their objectives, Hess officials reassured shareholders that the company will maintain its focus on delivering industry-leading cash flow growth and financial returns while responsibly producing oil and gas to meet the world’s increasing energy demands.
