Hess Corp. reported a net loss of $222 million during fourth-quarter 2019 compared with net loss of $4 million in fourth-quarter 2018. An adjusted net loss of $180 million was up from an adjusted net loss of $77 million in fourth-quarter 2018.
The company said the decrease in after-tax adjusted results primarily reflects lower natural gas and natural gas liquids realized selling prices, partially offset by higher production volumes and improved midstream earnings, compared with the prior-year quarter.
Hess said net cash from operating activities was $286 million in fourth-quarter 2019, down from $881 million in fourth-quarter 2018.
E&P capital and exploratory expenditures were $876 million in the fourth quarter, compared with $618 million in the prior-year quarter, primarily reflecting greater activity in Guyana, the Bakken, and the Gulf of Mexico, the company said. For 2020, E&P capital and exploratory expenditures are expected to be $3.0 billion.
Midstream capital expenditures were $108 million in the fourth quarter, up from $67 million in the prior-year quarter.
Production
Exploration and production losses totaled $64 million during the quarter compared with net loss of $5 million in fourth-quarter 2018. Adjusted net loss was $124 million. E&P results include a noncash income tax benefit of $60 million resulting from the reversal of a valuation allowance against net deferred tax assets in Guyana upon achieving first production.
Net production, excluding Libya, was 316,000 boe/d in the fourth quarter, up from fourth-quarter 2018 net production of 267,000 boe/d, driven primarily driven by Bakken net production, which was up 38% from fourth-quarter 2018 to 174,000 boe/d. Net oil production in the Bakken was up 28% to 106,000 b/d of oil primarily due to increased drilling activity and new plug and perf well completion design.
Libya net production was 22,000 boe/d in both the fourth quarter of 2019 and 2018.
Net production from the Gulf of Mexico was 70,000 boe/d, compared with 68,000 boe/d in the prior-year quarter. The Esox-1 oil discovery in Mississippi Canyon (Hess, 57%) will be brought online in February as a tieback to the Tubular Bells production facilities. At the Kosmos Energy-operated Oldfield well in Mississippi Canyon (Hess, 60%) commercial quantities of hydrocarbons were not encountered.
At the ExxonMobil-operated Stabroek Block, offshore Guyana, first production from Liza field using the Liza Destiny FPSO was achieved Dec. 20, 2019. Production is expected to ramp up to the full capacity of 120,000 gross b/d of oil in the coming months.
A second FPSO, Liza Unity, with an expected capacity of up to 220,000 gross b/d of oil is under construction for Liza Phase 2, with first oil expected by mid-2022. A third development, Payara, is expected to be sanctioned following government and regulatory approvals and is expected to produce up to 220,000 gross b/d of oil with startup as early as 2023.
The company operated six rigs in the fourth quarter, drilling 42 wells, completing 37 wells, and bringing 59 new wells online.
For 2020, oil and gas production, excluding Libya, is forecast to be 330,000- 335,000 boe/d, compared to full year 2019 net production, excluding Libya, of 290,000 boe/d.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.
