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Hess Corporation (HES)

  • Thu, Feb. 26, 2:58 PM
    • North Dakota's oil producers have cut the number of active rigs in the state to just 121 from 190 a year ago, according to a new list published by the state’s Department of Mineral Resources.
    • The rig count is now below the threshold of “at least 130” the DMR director had identified last month as needed to sustain output at the current level of slightly more than 1.2M bbl/day.
    • Of the 121 active rigs, 115 are drilling in just four counties at the heart of the Bakken - Dunn, McKenzie, Mountrail and Williams.
    • With the number of rigs in even the core areas down by 30% in just over two months, production likely will begin to plateau or fall in the coming months, Reuters' John Kemp writes.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
  • Fri, Feb. 6, 10:44 AM
    • Violence in Libya increasingly is hitting oil companies and their assets, hurting long-term investments by Western companies and driving down production.
    • In the past three months, Libya's oil output has fallen from nearly 900K bbl/day to 325K bbl/day as oil fields are taken over by armed groups or shut down for security reasons.
    • Affected companies include Total (NYSE:TOT), which closed the Mabruk oil field that once produced 30K-40K bbl/day; the country’s main oil port Sidra was closed because of fighting, hurting the prospects of the three U.S. companies - ConocoPhillips (NYSE:COP), Marathon Oil (NYSE:MRO) and Hess (NYSE:HES) - with a stake in connected fields.
    • But the global crude oil market has barely reacted to the renewed fighting, because of OPEC’s decision in November not to cut production virtually guaranteed an oversupply whether Libya produces or not, analysts say.
  • Wed, Feb. 4, 2:58 PM
    • Halliburton (NYSE:HAL), Whiting Petroleum (NYSE:WLL), Hess (NYSE:HES) and other energy companies with a presence in North Dakota have decided, at least for now, not to lay off staff in the state, hoping to be prepared for any prolonged rebound in crude prices.
    • By almost any metric - the jobless rate, payrolls, claims for unemployment benefits - there is little evidence to indicate the state at the center of the U.S. shale oil boom is about to suffer anything resembling a bust.
    • Other large North Dakota producers, including Oasis Petroleum (NYSE:OAS), Statoil (NYSE:STO) and EOG Resources (NYSE:EOG), also have said they have no plans to reduce their workforce.
    • Continental Resources (NYSE:CLR), the state's second largest oil producer, has not commented on staffing levels, but CEO Harold Hamm bragged in a press release yesterday that CLR's North Dakota acreage continues to "provide exceptional results."
  • Tue, Feb. 3, 2:49 PM
    • Veteran energy analyst Christopher Eades recommends a half-dozen safe oil majors, oilfield services firms and transport MLPs as the best bets to ride out the current storm - Halliburton (HAL +4%), Pioneer Natural Resources (PXD +2.2%), Hess (HES +3.2%), Occidental Petroleum (OXY +2.1%), Enterprise Products Partners (EPD +1.4%) and Plains All American Pipeline (PAA +2.4%) - all companies with strong balance sheets, strong growth prospects, and healthy yield levels with no dividend cuts on the table.
    • Eades says he is "more enthusiastic about MLPs than I've been in some time," as the group has essentially given up two years’ worth of gains yet cash flow fundamentals have been largely unchanged - "to me, that sounds like a good opportunity, particularly in a world still so starved for yield."
  • Wed, Jan. 28, 9:18 AM
    • Hess (NYSE:HES) -1.7% premarket as Q4 earnings fall short of Wall Street expectations, as lower gas prices dragged down earnings despite increased production.
    • Q4 oil and gas production averaged 362K boe/day, up 18% Y/Y, with Bakken output of 102K boe/day representing a ~50% Y/Y increase.
    • HES expects overall FY 2015 production to average ~350K boe/day, up ~10% Y/Y, driven by a full year of production from the Tubular Bells field in the Gulf of Mexico following first production in late 2014.
    • HES says it plans to reduce its spending in the Bakken oil patch by 18% Y/Y to $1.8B, with technology as well as lower oil prices factoring into the decision; the company expects to drill almost as many wells as it did last year while running only half of the drilling rigs.
    • HES announced Monday it was cutting its overall capex budget for 2015 by 16% to $4.7B.
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  • Wed, Jan. 28, 7:34 AM
    • Hess (NYSE:HES): Q4 EPS of $0.18 misses by $0.11.
    • Revenue of $2.53B (-18.4% Y/Y) beats by $300M.
    • Press Release
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  • Tue, Jan. 27, 5:30 PM
  • Mon, Jan. 26, 5:46 PM
    • Hess (NYSE:HES) says it is planning a 2015 capital spending budget of $4.7B, a 16% reduction from actual 2014 spending of $5.6B, as it attempts to manage through the current price environment.
    • Hess plans to reduce spending in the Bakken to $1.8B from $2.2B in 2014, operating an average of 9.5 rigs and bringing ~210 new operated wells online, compared with 17 rigs and 238 operated wells brought online in 2014.
    • Expects to spend $290M in the Utica vs. ~$500M last year, with the Consol Energy (NYSE:CNX) joint venture bringing 25-30 new wells online compared with four rigs and 39 new wells in 2014.
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  • Mon, Jan. 26, 12:58 PM
    • ConocoPhillips (NYSE:COP) headlines BofA Merrill's list of five favorite large-cap energy stocks, after recently raising the stock to a Buy rating as the company has somewhat dampened earnings and growth expectations for a time even though it is cash rich.
    • Occidental Petroleum (NYSE:OXY) faces the oil price correction with the strongest balance sheet in the sector, the firm says, with net cash at year-end 2014 estimated at $1.7B and a whopping $11/share of cash available for buybacks.
    • Chatter about takeover speculation has resumed around Hess (NYSE:HES); with a market cap falling to just north of $21B, Merrill says the company could fall prey to larger integrated as a quick bolt-on acquisition to boost growth.
    • Also recommended: XOM, PXD
  • Fri, Jan. 23, 9:45 AM
    • Exxon Mobil (XOM -1.3%) opens lower after Credit Suisse downgrades shares to Underperform from Neutral and cuts its stock price target to $82 from $90, writing that major oil companies are entering a period of "less production, more debt and lower upstream cash margins than they were projected to earn six months ago."
    • The firm lowers its 2015 EPS estimates for XOM to $2.82 from $5.04, and its 2016 EPS estimates to $5.42 from $6.27.
    • Credit Suisse also downgrades several other major oil names, including Chevron (CVX -1.2%), Hess (HES -1.3%), Noble Energy (NBL -1.2%) and Murphy Oil (MUR -1%).
  • Thu, Jan. 15, 10:25 AM
    • North Dakota oil production rose to a new record even as energy companies drilled fewer wells and the rig count dropped to a near five-year low.
    • The state's oil output hit a record 1.19M bbl/day in November, the most recent month available, according to data released yesterday by North Dakota’s Department of Mineral Resources.
    • Despite the new record, the head of the department warned the state’s crude production will peak and decline later this year if oil prices don’t rebound; the current price of North Dakota sweet crude is ~$29.25/bbl, the lowest since Dec. 2008.
    • The latest drilling rig count is 158, the lowest in nearly five years and down from a high of 218 rigs in 2012, but the department says production may not start to drop until the rig count falls to 130 or lower.
    • Gregor McDonald argues that the North Dakota data confirming that Bakken drilling activity has slowed meaningfully has sparked the snapback rally in crude oil prices.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
  • Tue, Jan. 13, 6:55 PM
    • MarketWatch's Philip Van Doorn spotlights U.S. drillers and oilfield services companies with efficiency advantages that could help them weather the bear market in crude oil.
    • A key step in the fracking process to extract oil from shale is pumping proppant into a well to open cracks from which oil and gas can flow, but the cost of proppant varies widely; companies with the lowest proppant cost will have the best shot of turning a profit from shale extraction operations during a prolonged period of low oil prices, Van Doorn writes.
    • The Rockies formation is considered the most efficient, with a proppant cost of $8.88/bbl during the first 90 days of production; 54% of WPX Energy’s (NYSE:WPX) non-conventional oil wells are in the Rockies.
    • 83% of Noble Energy’s (NYSE:NBL) non-conventional wells are located in the Niobrara formation, which has a low proppant cost of $15.41/bbl.
    • Overall, Hess (NYSE:HES) is calculated to boast the best proppant efficiency, with an average cost of $3.58/bbl for the first 90 days of production, followed by BHP Billiton (NYSE:BHP) with an average cost or $9.14, and Whiting Petroleum (NYSE:WLL) with an average proppant cost of $11.08/bbl.
  • Tue, Jan. 13, 9:16 AM
    • Enbridge (NYSE:ENB) says it was selected to build and operate a crude oil pipeline that will connect the planned Stampede deepwater project to an existing pipeline system.
    • ENB says the new pipeline will be built in the Gulf of Mexico for ~$130M and begin operations in 2018.
    • Hess (NYSE:HES), which plans to drill as many as six production wells in the Stampede area starting early this year, owns Stampede alongside partners Statoil, Nexen and Chevron.
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  • Mon, Jan. 12, 7:22 PM
    • The number of drilling rigs operating in North Dakota's oil fields has dropped to 159, the lowest level since November 2010.
    • The state lost eight rigs overnight, according to state data, a steep one-day drop not seen for years in the second-ranked U.S. oil producer.
    • The drop comes after Continental Resources (NYSE:CLR), Oasis Petroleum (NYSE:OAS) and other companies announced capital spending cuts for 2015, admitting they planned to use fewer rigs this year.
    • Other major North Dakota producers include EOG, WLL, HES, XOM, NOG, EOX and MRO.
  • Fri, Jan. 9, 10:56 AM
    • North Dakota needs an oil price of $55/bbl and a fleet of at least 140 rigs to sustain production at the current level of 1.2M bbl/day, according to a presentation from the state's chief mineral resources regulator.
    • Breakeven rates for new wells range from $29 in Dunn county and $30 in McKenzie to $36 in Williams and $41 in Mountrail; these four counties account for 90% of drilling in the state.
    • The number of rigs operating in the state already has fallen to 165, down from 191 in October.
    • The projections confirm North Dakota's oil output will start to fall by year's end unless prices rise from current depressed levels.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
  • Thu, Jan. 8, 3:29 PM
    • News reports about crude oil futures prices plunging through $50/bbl have been plentiful but many U.S. physical crude producers are receiving far less and would be thrilled if they could get $50, Reuters' John Kemp writes.
    • Case in point: Prices received by oil producers in North Dakota's Williston Basin have averaged less than $34/bbl so far this month, according to Plains Marketing, falling by almost two-thirds since June when Plains posted an average price of nearly $92/bbl for Williston Sweet.
    • The recent decline has been almost as rapid and brutal as 2008-09 when Williston prices crashed from $116 to less than $17.
    • Kemp says past experience suggests extreme prices tend be relatively short-lived phenomena and followed by at least a partial correction, and thinks some sort of rebound is likely this time around in the next 2-3 months.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO.
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Company Description
Hess Corp is a Exploration and Production (E&P) company that develops, produces, purchases, transports and sells crude oil and natural gas. The Company operates in two segments: E&P and Retail Marketing.