U.S. oil and gas producer Hess Corp on Thursday introduced deeper spending cuts after reporting a quarterly loss due to impairment charges of $2.25 billion on some oil-producing assets amid the coronavirus crisis.
Stay-at-home orders designed to contain the coronavirus pandemic have forced businesses to shut down, cutting worldwide demand for oil and creating a supply glut. U.S. crude collapsed this year, and remains down about 60% from January despite a recent rally.
Hess slashed its 2020 capital budget by 37% to $1.9 billion from $3 billion. This is the second time the company has reduced its full-year capital spending.
Most shale companies have cut their annual budget, slashed or suspended dividends and reduced jobs as they try to shore up cash and protect their balance sheets.
The New York-based company said net loss attributable was $2.43 billion, or $8 per share, in the first quarter ended March 31, compared with a profit of $32 million, or 9 cents per share, a year earlier.
On an adjusted basis, it incurred a loss of 60 cents per share, smaller than the average analyst estimate of a loss of 65 cents, according to Refinitiv IBES.
Total production, excluding Libya, rose to 344,000 barrels of oil equivalent per day (boepd) from 278,000 boepd. (Reporting by Arunima Kumar in Bengaluru; Editing by Maju Samuel)
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