Hess Loses Almost $5Bn in 4Q

US independent Hess crashed to a net loss of $4.89bn in 4Q2016, compared to a $1.82bn loss in the same 2015 quarter, as production slumped by 15% to 311,000 barrels of oil equivalent per day (from 368,000 boe/d in 4Q2015).

Hess reported January 25 its 4Q2016 results include an after-tax charge of $693 million to impair its Equus natural gas project, offshore Australia’s North West Shelf, along with an even larger $3.749bn ‘non-cash accounting charge’ on deferred tax assets.

Oil and gas production excluding Libya is forecast in 2017 to be in the range of 300,000-310,000 boe/d, compared to full year 2016 net production of 321,000 boe/d.

Hess’s full year net loss was $6.13bn, more than double its 2015 loss of $3.06bn. 

On the upside, the company noted that its Libya production resumed in 4Q2016 at a net rate of 4,000 boe/d, and that it has a 30% interest in two world-class offshore Guyana oil finds (Liza and Payara).

Oil and gas proved reserves also rose slightly to 1,109mn boe at end-2016 (from 1,086mn boe end-2015) as additions and technical revisions added 172mn boe in 2016, primarily relating to the US Bakken, North Malay Basin, and Syd Arne oil and gas field offshore Denmark.

The Syd Arne licence was extended until 2047 by Danish regulators in October 2016, reported Reuters. However Danish producers now need to face up to how their oil and associated gas can be produced if the Tyra offshore gas hub is decommissioned. Syd Arne produces 5% of Denmark’s gas.

Mark Smedley