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CORRECTED-UPDATE 2-Hess profit and production tumble after unrest in Libya
October 30, 2013 / 2:01 PM / 4 years ago

CORRECTED-UPDATE 2-Hess profit and production tumble after unrest in Libya

(In paragraphs three and five, fixes references to second quarter; meant third quarter in both instances.)

By Ernest Scheyder

Oct 30 (Reuters) - Political and military unrest in Libya sharply curtailed oil and natural gas producer Hess Corp’s quarterly production and profit, forcing it to temper expectations for the year, the company said on Wednesday.

Libya’s total exports have slumped to around 90,000 barrels per day, less than 10 percent of capacity, as protests have halted operations at ports and fields.

Hess, which first began operating in the OPEC nation in 1955, said the tensions dented third-quarter production and that it now expects full-year output to be at the low end of its guidance range of 340,000 to 355,000 barrels of oil equivalent per day (boe/d).

The country’s oil production has been sharply down since uprisings against former leader Muammar Gaddafi began in 2011. Libya’s National Oil Corporation controls production in the country and partners with Hess and other international companies, including ConocoPhillips, Marathon Oil and BASF’s Wintershell

Hess’ total oil and gas output fell during the third quarter to 310,000 boe/d from 402,000 boe/d a year earlier.

Hess’ asset sales in Russia, the UK and Azerbaijan contributed to the global output drop. In the year-earlier quarter, those assets boosted production.

The company’s expansion in North Dakota’s Bakken shale field was a bright spot during the quarter. Production in the state, where Hess spent the lion share of its $1.53 billion capital budget during the quarter, rose 14 percent to 71,000 boe/d.

The jump in Bakken production was a “silver lining” in the company’s earnings statement, Capital One Securities analyst Phillips Johnston said in a note to clients.


Hess reported net income of $420 million, or $1.23 per share, compared with $557 million, or $1.64 per share, a year earlier.

Excluding one-time items, Hess earned $1.18 per share in the third quarter. By that measure, analysts expected $1.44 per share, according to Thomson Reuters I/B/E/S.

Revenue dropped 23 percent to $2.69 billion. Analysts expected $2.67 billion.

Shares of New York-based Hess fell 1.7 percent to $82.10 in premarket trading. As of Tuesday’s close, the stock had gained 58 percent this year.

Activist investor Elliot Management took a large stake in Hess earlier this year and put three new directors on the company’s board. (Reporting by Ernest Scheyder; Editing by Lisa Von Ahn, John Wallace and Alden Bentley)

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