Hess quarterly profit beats on strong Guyana output

(Reuters) Hess Corp (HES.N) beat estimates for second-quarter profit on Wednesday, helped by sharply higher oil production in Guyana and stronger prices.

The South American country and its lucrative oil assets are at the center of a dispute between Hess, Chevron (CVX.N) and Exxon.

Last October, Hess agreed to sell itself to Chevron for US$53 billion in stock, but the deal has been stalled by a regulatory review and challenged by Exxon, which claims a right to Hess’s Guyana assets.

Hess’s production rose 27.6% to 494,000 barrels of oil and gas per day (boepd), on nearly 75% year-over-year increase in Guyana to 192,000 bpd. Its Bakken shale output also rose, the company said.

It, however, expects a fall in current-quarter production due to planned downtime in Guyana and Southeast Asia. Third-quarter net production is expected to be in the range of 460,000 boepd to 470,000 boepd.

Hess said it expects its Guyana output to fall 10% as a natural gas pipeline is connected this quarter, and expects its North Dakota output to drop 4.5% on planned maintenance.

The company’s average realized crude oil selling price also rose nearly 13% to $80.29 per barrel in the second quarter.

A three-person arbitration panel is expected to decide on

the dispute with Exxon. Exxon believes the process could extend to 2025 while both Chevron and Hess expect a resolution by the end of the year.

Hess’ quarterly profit of $2.62 per share beat analysts’ average estimate of $2.48 per share, according to LSEG data.