Oil producer Hess beats profit estimates as production jumps

(Reuters) – Oil and gas producer Hess Corp (HES.N) on Wednesday beat Wall Street estimates for second-quarter profit, buoyed by higher production and disclosed a new oil discovery in the Gulf of Mexico.

Crude prices have slipped from the multi-year highs hit last year following Russia’s invasion of Ukraine but remain strong enough to encourage oil and gas producers to drill profitably.

Meanwhile, the company’s net production jumped 28% to 387,000 barrels of oil equivalent per day (boepd) in the April-June quarter, while worldwide average realized crude oil selling price, excluding hedges, tumbled nearly 33% to $73.74 per barrel.

Hess said the Pickerel-1 well in the Gulf of Mexico, where it struck oil in July, is expected to start production in mid-2024.

New York-based Hess raised its annual production forecast to 385,000 to 390,000 boepd from 365,000 to 375,000 boepd, betting on production starting at the Payara project in Guyana.

Hess holds a 30% stake in a consortium that operates in Guyana that has made more than 30 discoveries in the South American country’s offshore waters since 2015.

Exxon Mobil (XOM.N) and China’s CNOOC (0883.HK) are part of the consortium.

In the second quarter, Hess sold nine cargos of crude oil from Guyana compared with six in the prior-year quarter. Production jumped about 64% from the country, the company said.

On an adjusted basis, the company reported a net income of 65 cents per share, compared with analysts’ estimate of 50 cents, according to Refinitiv data.