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Oil producer Hess Corp posts smaller-than-expected loss

Hess Corp

Hess Corp slashed spending in recent quarters.  Last quarter, the New York based company cut expenses by almost 16 per cent. Getty Images/Bloomberg photo.

Hess Corp expects rebound in activity in 2017

Jan 25 (Reuters) – U.S. oil producer Hess Corp posted a smaller-than-expected quarterly loss on Wednesday, helped by cost cuts, and executives forecast a rebound in activity this year as crude prices edge higher.

The cautiously optimistic outlook for 2017 comes as the number of drilling rigs and other oilfield equipment deployed across the United States continues to rise, with oil executives betting their industry is on the rebound after a two-year price downturn.

“We see 2017 as the start of an exciting new chapter of value-driven growth for our company and our shareholders,” Chief Executive John Hess said in a statement.

Shares of New York-based Hess fell about 0.7 per cent to $57.12 in morning trading, in line with a dip in oil prices.

Hess, like many of its peers, has slashed costs in recent quarters, lowering expenses by almost 16 per cent in the fourth quarter.

Yet the company is boosting annual spending this year by about 18 per cent to $2.25 billion, adding a drilling rig in North Dakota’s Bakken shale and expanding in the U.S. Gulf of Mexico, Thailand and Guyana.

Net loss attributable to Hess in the fourth quarter of 2016 widened to $4.89 billion, or $15.65 per share, from $1.82 billion, or $6.43 per share, a year earlier.

Excluding one-time items, such as accounting charges, the company reported a loss of $1.01 per share, smaller than the average analyst estimate of $1.09, according to Thomson Reuters I/B/E/S.

Oil and gas production fell to 311,000 barrels of oil equivalent per day (boepd) from 368,000 boepd a year earlier.

Revenue was nearly unchanged from a year earlier at $1.39 billion, but higher than analysts’ expectations of $1.23 billion.

Hess also said on Wednesday its offshore project at the North Malay Basin in the Gulf of Thailand would come online in 2017, with its Stampede oil and gas development in the Gulf of Mexico starting up in 2018.

The company is a founding sponsor of the Super Bowl LI host committee. The game is to be played Feb. 5 in Houston, where Hess runs most of its operations.

(Reporting by Ernest Scheyder and Ruthy Munoz in Houston; Additional reporting by Vishaka George in Bengaluru; Editing by Sriraj Kalluvila, Maju Samuel and Andrea Ricci)

Posted in: Energy Financial

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