Hess Corp. reported a net loss of $389 million during the first quarter compared with net income of $386 million in first-quarter 2014. An adjusted net loss of $279 million was down from an adjusted net income of $446 million in first-quarter 2014.
The company says lower realized selling prices reduced adjusted net income by $700 million after-tax year-over-year. First-quarter results benefitted from higher crude oil and natural gas liquids production, but were offset primarily by higher depreciation, depletion, and amortization expense.
Net cash provided by operating activities was $362 million in the first quarter, compared with $1.16 billion in first-quarter 2014.
Hess is further reducing its full-year guidance for capital and exploratory expenditures by $300 million to $4.4 billion. The company also forecasts its full-year cash costs will be lower by $250 million.
The company says it will continue to pursue additional savings in 2015 and beyond to improve its financial flexibility.
Exploration and production losses totaled $286 million during the quarter compared with net income of $508 million in first-quarter 2014. Adjusted net loss was $193 million compared with adjusted net income of $514 million in first-quarter 2014.
Capital and exploratory expenditures were $1.3 billion, reflecting an average of 12 rigs in the Bakken shale and increased exploratory drilling expenditures in the Gulf of Mexico, Guyana, and Kurdistan.
Company oil and gas production totaled 361,000 boe/d, up 14% year-over-year from 318,000 boe/d, primarily comprising increases in the Bakken of 45,000 boe/d, Utica shale wet gas acreage of 15,000 boe/d, and the joint development area of Malaysia-Thailand of 3,000 boe/d.
Assets sales reduced production by 23,000 boe/d, while Norway production declined 7,000 boe/d, the company notes.
Net production from the Bakken increased 70% to 108,000 boe/d year-over-year due to continued drilling activities and constrained production in first-quarter 2014 resulting from the shut-in of the Tioga gas plant to complete the expansion project (OGJ Online, May 21, 2015).
John Hess, Hess Corp. chief executive officer, told IHS CERAWeek in Houston last week that his company has cut spud-to-spud times and drilling costs in half (OGJ Online, Apr. 22, 2015). But he also believes the “best way to deal with [low prices] is to leave [oil] in the ground.”
The company nevertheless brought 70 gross operated wells on production during the quarter while operating an average of 12 rigs, down from 17 rigs at yearend 2014. The company is operating 8 rigs and plans to continue at that level for the remainder of the year.