Hess Corp. reported net income of $624 million in fourth-quarter 2022 compared with net income of $265 million in fourth-quarter 2021. On an adjusted basis, the company had net income of $548 million in fourth-quarter 2022.
The improvement in adjusted after-tax earnings compared with the prior-year period was primarily due to increased sales volumes in Guyana in fourth-quarter 2022.
During fourth-quarter 2022, Hess’s oil and gas net production, excluding Libya, was 376,000 boe/d, up 27% from 295,000 boe/d in fourth-quarter 2021, primarily due to higher production in Guyana. Exploration and production capital (E&P) and exploratory expenditures were $818 million compared with $593 million in the prior-year quarter. E&P net income was $667 million in fourth-quarter 2022, compared with $309 million in fourth-quarter 2021.
The company's average realized crude oil selling price, including the effect of hedging, was $76.07/bbl in fourth-quarter 2022, compared with $71.04/bbl in the prior-year quarter. The average realized NGL selling price in fourth-quarter 2022 was $26.93/bbl, compared with $36.47/bbl in the prior-year quarter, while the average realized natural gas selling price was $5.17/mcf, compared with $4.77/mcf in fourth-quarter 2021.
Hess’s year-end proved reserves are estimated to be 1.26 billion boe; organic reserve replacement was 144% at a finding and development cost of about $14.8/boe.
Production highlights
Hess’s net production from the Bakken of 158,000 boed in the fourth quarter was impacted by unplanned production shut-ins caused by severe winter weather in December. Net production in the fourth quarter of 2021 was 159,000 boed. The operator added a fourth drilling rig in July 2022, and drilled 19 wells, completed 14 wells, and brought 15 new wells online during the quarter. Net production is forecast to be 165,000-170,000 boe/d in 2023.
Net production from the Gulf of Mexico was 35,000 boe/d in fourth-quarter 2022, compared with 39,000 boe/d in the prior-year quarter.
In Guyana, at Stabroek block (Hess, 30%), net production from Liza Destiny and the Liza Unity floating production, storage, and offloading vessels (FPSOs) totaled 116,000 b/d in fourth-quarter 2022 compared with 31,000 b/d in the prior-year quarter. The Liza Unity FPSO, which commenced production in February 2022, reached production capacity of 220,000 gross b/d in July 2022.
The third development, Payara, will utilize the Prosperity FPSO with an expected capacity of 220,000 gross b/d, with first production expected by end-2023. The fourth development, Yellowtail, was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross b/d, with first production expected in 2025. A fifth development, Uaru, was submitted for approval to the Government of Guyana in the fourth quarter. Pending government approvals and project sanctioning, the project is expected to have a capacity of about 250,000 gross b/d with first oil anticipated at end-2026.
Hess also announced a significant oil discovery at the Fangtooth SE-1 well on the Stabroek block, offshore Guyana. The Fangtooth SE-1 well encountered approximately 200 feet of oil bearing sandstone reservoirs. Further appraisal activities are underway.