Entering text into the input field will update the search result below

Hess Corporation: Key Takeaways From The Fourth Quarter 2018

Feb. 04, 2019 12:14 PM ETHess Corporation (HES)15 Comments


  • This quarter was a good one, despite a concerning drop in the oil prices the past few months. Adjusted income was an after-tax net loss of $77 million.
  • The company delivered production of 250K net Boep/d in 2018 (excluding Libya) which was within the original production guidance 2018 of 245K to 255K net Boep/d.
  • Hess Corporation is a compelling case from a long-term investor's perspective. However, it is perhaps reasonable to be a little patient before turning bullish on the stock.

Courtesy: Hess Corporation

Investment Strategy

Hess Corporation (NYSE:HES) is a US-based independent oil and gas producer with strong revenue primarily originated from the USA (onshore and offshore), which represented 67.1% of the total output in 4Q'18.

Hess Corporation can be considered long-term investment because of its diversified revenue streams and its ability to enhance total returns through dividend ($1.00 per share or a yield of 1.8%).

Two primary topics can describe the present and future of Hess's business model.

First, a strong presence in the Bakken shale with production expected to increase to 200K Boe/d by 2021. Greg Hill said in the conference call:

For the full-year 2019, we forecast our Bakken production to average between 135,000 and 145,000 net barrels of oil equivalent per day approximately 20% above 2018 levels. In the first quarter of 2019, we expect Bakken production to average approximately 130,000 to 135,000 net barrels of oil equivalent per day. In 2019, we plan to drill approximately 170 wells and bring approximately 160 new wells online, compared to 121 wells drilled and 104 wells brought online in 2018.

Second, an ongoing effort focusing on the company's Guyana massive offshore project conducted in collaboration with Exxon Mobil (XOM), which will begin producing commercially (Phase I) in 2020.

Hess Guyana Exploration, which is a subsidiary of Hess Corp., owns 30% working interest, while Exxon Mobil is the operator of the field and owns 45% working interests.

After Hess and Exxon announced their 10th discovery in the Stabroek block called the Pluma-1 well early December of 2018, the field is estimated holding now 5 billion barrels of oil and gas (resources). The company expects that it can install up to five production platforms in the block over the coming years with a total production of 750k Boe/d by 2025.

This article was written by

Fun Trading profile picture
As an experienced investor, I will help you stay on task more efficiently.

I am a former test & measurement doctor engineer (geodetic metrology). I was interested in quantum metrology for a while.

I live mostly in Sweden with my loving wife.

I have also managed an old and broad private family Portfolio successfully -- now officially retired but still active -- and trade personally a medium-size portfolio for over 40 years.

“Logic will get you from A to B. Imagination will take you everywhere.” Einstein.

Note: I am not a financial advisor. All articles are my honest opinion. It is your responsibility to conduct your own due diligence before investing or trading.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.