Jan 29 Unrest in Libya and maintenance in the
U.S. Gulf of Mexico weighed on Hess Corp's output and
profit in the fourth quarter, and the oil and natural gas
producer reported lower-than-expected results on Wednesday.
New York-based Hess sold $7.8 billion worth of assets last
year, including energy storage terminals and other properties,
to focus almost exclusively on finding and extracting oil and
Despite the sharpened focus, the latest output figures
disappointed Wall Street, and Hess' 2014 production forecast
came in "soft," Capital One Securities analyst Phillips Johnston
said in a note to clients.
Hess produced 307,000 barrels of oil equivalent per day in
the fourth quarter, down from 396,000 boe/d a year earlier.
Roughly 20,000 boe/d of the drop was due to political
instability in Libya. Hess partners there with Libya's National
Oil Corp, which controls the nation's production.
In the U.S. Gulf, production slipped 35,000 boe/d because of
a pipeline shutdown.
Part of the production drop also was due to asset sales
undertaken to appease unhappy investors. They include hedge fund
Elliott Management, which won three seats on the company's board
Hess continued the trend on Wednesday, announcing it sold
74,000 acres in Ohio's Utica shale for $924 million to an
For the fourth quarter, Hess reported net income of $1.93
billion, or $5.76 per share, compared with $374 million, or
$1.10 per share, a year earlier.
Excluding one-time gains from asset sales, the company
earned 96 cents per share. By that measure, analysts on average
had expected $1.08, according to Thomson Reuters I/B/E/S.
Hess expects production to increase 5 percent to 8 percent
each year through 2017. Much of the growth will come in North
Dakota's Bakken shale formation, where the company holds about
645,000 acres and plans to spend the bulk of its 2014 capital
"This coming year will be one in which the company and its
shareholders continue to benefit from our new focus," Chief
Executive Officer John Hess said on a conference call with
As part of the shift away from refining and the retail
businesses, Hess said earlier this month that it would try to
spin off its gas station and convenience store network, which
analysts believe could be worth more than $1.5 billion.
Shares of Hess were up 0.8 percent at $77.40 in morning
trading on Wednesday.