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Hess Corp.: Guyana Is Still The Main Inspiration

Jun. 08, 2020 2:10 PM ETHess Corporation (HES)


  • In the first quarter of 2020, Hess' revenues decreased to $1,369 million from $1,599 million in the same quarter a year ago.
  • HES produced 349K net Boep/d in 1Q'20 (including Libya). It was up 16.7% from the same quarter a year ago on contributions from the Bakken segment.
  • I recommend trading the short term with about 40%-50% of your total amount invested, due to increased volatility in the oil sector.
  • Looking for a helping hand in the market? Members of The Gold And Oil Corner get exclusive ideas and guidance to navigate any climate. Get started today »

Courtesy: Hess Corporation

Investment Strategy

The US-based independent oil and gas producer Hess Corporation (NYSE:HES) can be considered as a "good bet" due to the potential of the Guyana prospect, which has been funded without issuing additional equity or debt.

This significant prospect has been a challenge for this independent oil and gas producer due to the sheer size of the CapEx that it has required and still demands as we speak. However, the company is now indicating the first production from Guyana with 15K Boep/d, and the situation is improving quickly. However, it is still a long way to go before free cash flow turns positive.

For the ones who want more information about the Stabroek prospect in Guyana, please read my 11 preceding articles on Hess.

The problem is that oil prices have dropped significantly, and despite some optimism due to the recent OPEC proposed cut, we should expect fierce headwinds on the horizon. The investment thesis that I recommend for Hess Corporation is a dual strategy combining a long-term investment with a significant part allocated to short-term trading to take full advantage of the oil volatility. We are in a period of exuberance, and it is precisely the time to make some profit off the table before the market regains some common sense. The oil prices have reacted to the cut proposed by OPEC+ but has disregarded the other part of the problem, which is the dismal demand. As always, the market looks only to the part it deems advantageous and encourages the momentum. So far, momentum is positive, but it is only temporary.

I recommend trading the short term with about 40%-50% of your total amount invested, due to increased volatility in the oil sector.

1Q'20 Balance Sheet and Trend - The Raw Numbers

Hess Energy

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