Hess posts bigger-than-expected loss, cuts annual production forecast

(Reuters) - Hess Corp HES.N reported a bigger-than-expected quarterly loss on Wednesday and cut its full-year production forecast as hurricanes disrupted the oil and gas producer's operations in the Gulf of Mexico.

FILE PHOTO: Eighteen oil pumpjacks are seen on a Hess well pad near Tioga, North Dakota April 30, 2016. REUTERS/Andrew Cullen/File Photo

Intense hurricane activity in the region over the last few months has forced companies to shut down their production platforms, curtailing output.

Hess said it was expecting 2020 production, excluding Libya, of around 325,000 barrels of oil equivalent per day (boepd), below its prior estimate of 330,000.

Current-quarter production forecast of 300,000 boepd, excluding Libya, was below analysts’ estimates of 323,000 boepd, due to the hit from hurricanes as well as a slower ramp up at a key well offshore Guyana.

The company said it was expecting its Liza I well off the coast of Guyana to reach full capacity of 120,000 gross barrels of oil per day (bpd) only in December. It had previously expected to reach full capacity in August.

However, the company raised the estimate of discovered recoverable resources at its Stabroek Block, offshore Guyana, by about 1 billion barrels of oil equivalent (boe) to about 9 billion.

Hess, which also has operation in North Dakota’s Bakken shale play, said it had no plans for mergers and acquisitions in the near term.

“We see nothing in the M&A market that will compete for capital against our existing portfolio,” Chief Executive Officer John Hess said.

Hess’s comment comes against the backdrop of a string of takeover deals announced in recent weeks as shale companies look to consolidation to survive the pandemic-driven downturn.

The company posted a third-quarter loss of 71 cents per share, bigger than analysts’ estimate of 67 cents, according to IBES data from Refinitiv.

Quarterly production, excluding Libya, rose 10.7% to 321,000 boepd, while average realized price for crude, excluding hedges, fell 35.3% to $36.17 per barrel.

Reporting by Yajush Gupta and Shariq Khan in Bengaluru; Editing by Rashmi Aich and Anil D’Silva