Hess reported a $4.8 billion net loss in the fourth quarter after production volumes fell by about 50,000 barrels of oil equivalent per day.
The company reported a fourth quarter net loss of $4.89 billion net loss, or a net loss of $15.65 per common share, compared with a net loss of $1.82 billion in the fourth quarter of 2015.
Fourth quarter 2016 results include a noncash accounting charge of $3.74 billion on deferred tax assets and other aftertax charges totaling $838 million.
Fourth quarter adjusted net loss was $305 million, or $1.01 per common share, compared with an adjusted net loss of $396 million in the year-ago quarter.
Oil and gas production was 311,000 barrels of oil equivalent per day (boepd) in the fourth quarter, down from 368,000 boepd in the fourth quarter of 2015.
Excluding production from Libya and assets sold, pro forma net production in the fourth quarter of 2016 was 307,000 boepd, down from 358,000 boepd in the year-ago quarter.
Hess said that the lower volumes were “primarily due to a reduced drilling program across our portfolio, planned and unplanned downtime, and natural field declines.”
Hess added that production in Libya resumed in the fourth quarter at a net rate of 4,000 boepd.
The company’s Exploration and Production net loss in the fourth quarter of was $3.95 billion compared to a net loss of $1.71 billion in the fourth quarter of 2015.
On an adjusted basis, the E&P fourth quarter net loss was $257 million compared to a loss of $328 million in the prior-year quarter.
The company’s average realized crude oil selling price was $45.97 per barrel in the fourth quarter of 2016, a 5 percent boost from the prior-year quarter, including the effect of hedging.
Hess had proved oil and gas reserves of 1.109 million barrels of oil equivalent (boe) as of December 31, compared with 1.086 billion boe a year ago.
Hess said its net production from the Bakken fell about 13 percent year-over-year to 95,000 boepd in the fourth quarter.
The company said the year-over-year Bakken production dip was due to “constrained production operations in the quarter caused by severe winter weather and a reduced drilling program during 2016.”
Hess operated an average of two rigs and brought 21 gross operated wells on production in the fourth quarter of 2016, increasing the company’s year-to-date total to 100 wells.
Hess said its Bakken Midstream segment had net income of $3 million in the fourth quarter of 2016 compared to $11 million in the prior-year quarter.
The company’s Bakken Midstream fourth quarter results include a pretax charge of $67 million to impair older specification rail cars.
Excluding the rail car charge, adjusted fourth quarter 2016 net income for the company’s Bakken Midstream segment was $24 million compared to $11 million in the prior-year quarter.
The company’s net production from the Gulf of Mexico declined to 61,000 boepd in the fourth quarter compared to 73,000 boepd in the prior-year quarter.
Hess said the Gulf of Mexico production dip was a result of “unplanned well downtime due to subsurface valve failures at two fields and natural field declines.”
E&P capital and exploratory expenditures were $414 million for the fourth quarter.
Full year 2016 E&P capital and exploratory expenditures were $1.9 billion, down 54 percent from the company’s 2015 spend.
Hess said it expects its 2017 E&P spend to be $2.25 billion.
The company expects oil and gas production for 2017, excluding Libya, to be in the range of between 300,000 to 310,000 boepd compared to full year 2016 net production of 321,000 boepd.
Net cash provided by operating activities was $326 million in the fourth quarter of 2016 compared to $623 million in the fourth quarter of 2015.
Hess had cash and cash equivalents of $2.73 billion and total debt, excluding the Bakken Midstream, of $6.07 billion at December 31, 2016.
“We see 2017 as the start of an exciting new chapter of value-driven growth for our company and our shareholders. We are increasing activity in the Bakken, our two offshore developments at North Malay Basin in the Gulf of Thailand and Stampede in the Gulf of Mexico are on track to come online in 2017 and 2018, and the Liza Field in Guyana is one of the industry’s largest oil discoveries in the last 10 years,” Hess CEO John Hess said.
