Chevron Target Hess Beats Quarterly Profit Estimates on Production Boost

(Photo: Hess Corp)
(Photo: Hess Corp)

Oil and gas producer Hess Corp on Wednesday beat Wall Street estimates for third-quarter profit on higher production, days after agreeing to be bought by larger U.S. rival Chevron Corp for $53 billion.

New York-based Hess's net production was 395,000 barrels of oil equivalent per day (boepd) in the quarter and it forecast production to be around 410,000 boepd in the fourth quarter.

It reported an adjusted net income of $1.64 per share for the quarter, compared with analysts' average estimate of $1.15, according to LSEG data.

Shares of the company were 0.3% lower, at $154.82.

"Overall, Hess reported a good quarter. Earnings and cash flow was better than estimates and guidance due to higher production and higher commodity prices," said Simon Wong, research analyst at Gabelli Funds.

"The share price is down because it is now tied to Chevron's stock price, and Chevron's stock is down currently. Hess's shareholders will receive 1.025 Chevron shares for each Hess share."

Chevron's shares were down 0.6%, to $155.94.

Hess said its worldwide average realized crude oil selling price, excluding hedges, fell 4.4%, to $81.53 per barrel in the quarter, compared to last year.

Production from Guyana totaled 108,000 boepd, 10.2% higher compared with the prior-year quarter. The third oil project in the country, Payara, is expected to start in the fourth quarter.

Chevron is set to get Hess's 30% stake in Guyana in which larger rival Exxon Mobil and China's CNOOC are partners. Production at the Stabroek oil block is expected to triple to more than 1.2 million barrels per day (bpd) by 2027.

Production at the Bakken shale field in North Dakota stood at 190,000 boepd, up 14.4% from the third quarter of 2022, the company said, helped by increased drilling and well completion activity and higher natural gas volumes.

(Reuters - Reporting by Seher Dareen; Editing by Sriraj Kalluvila and Pooja Desai)

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