(Reuters) - U.S. oil and gas producer Hess Corp posted a smaller-than-expected quarterly loss on Wednesday, as higher crude prices offset an unexpected drop in production.
New York-based Hess, which has not reported a profit since 2014, has come under increasing pressure from investors to make money. Many of the company’s peers have turned profitable after the oil-price crash two years ago, fueling questions as to why Hess has not followed suit.
Shares dropped more than 2 percent in Wednesday morning trading.
“We continue to make significant progress in executing our strategy and position our company to deliver long-term value and superior financial returns to our shareholders,” John Hess, the company’s chief executive and largest shareholder, told investors on a Wednesday conference call.
Hess last month bemoaned the rising pressure from Wall Street to turn a profit, saying more attention on shareholder returns could drive down needed investment.
For the second quarter, the net loss attributable to the company narrowed to $130 million, or 48 cents per share, from $449 million or $1.46 per share, a year earlier.
Excluding one-time items, Hess lost 23 cents per share. Analysts on average were expecting a loss of 29 cents per share, according to Thomson Reuters I/B/E/S.
The company’s average realized price of crude oil increased 36 percent to $62.65 per barrel, while production fell 16 percent to 247,000 barrels of oil equivalent per day (boe/d), excluding its operations in Libya.
U.S. crude prices topped $75 a barrel at the end of June, rising more than 18 percent in the second quarter.
Hess said it earned $31 million from its exploration and production business in the quarter, compared with a loss of $354 million a year ago.
The gains were also helped by higher production in North Dakota’s Bakken shale formation, where Hess is the third-largest operator. Hess plans to add a sixth Bakken drilling rig in the fourth quarter.
Hess has been investing heavily in an oil development project off the coast of Guyana along with oil major Exxon Mobil Corp. The companies said earlier this week they expect one of the oil blocks in the project to contain about 25 percent more recoverable resources than initially estimated.
For the full year, Hess reaffirmed its output forecast of 245,000 boe/d to 255,000 boe/d.
Reporting by John Benny in Bengaluru and Ernest Scheyder in Houston; Editing by Arun Koyyur and Steve Orlofsky