Hess sinks to $3bn loss

Low oil prices and fewer asset sale gains sent US independent Hess to a $3 billion loss last year.

Eoin O'Cinneide

The New York-based giant saw its revenues wane from $11.44 billion to $6.56 billion as the oil price continued to lag significantly behind 2014’s value.

Gains from asset sales were a mere $51 million as against $823 million a year earlier, significantly impacting the bottom line, which slumped from a profit of $2.37 billion to a loss of $3.01 billion.

Costs were also up from $9 billion to $10.82 billion, with Hess taking $1.62 billion in impairments, and depreciation, depletion and amortisation costs soaring from $3.22 billion to $3.96 billion.

The exploration and production wing showed a fourth-quarter net loss of $328 million and on an adjusted basis this was a loss of $1.71 billion.

The division took a $1.36 billion impairment in the final quarter due to low oil prices and a goodwill impairment.

Hess had already revealed earlier this week that it was slashing its capital expenditure this year by 40% to $2.44 billion, with output set to slide from 368,000 barrels of oil equivalent in 2015 to between 330,000 and 350,000 boepd this year.

The new budget forecast will be allocated between unconventional ($470 million), production ($610 million), developments ($820 million) and exploration and appraisal ($200 million).

For its E&P business unit, the company will focus most of its budget on US operation ($1.4 billion), it said, with the rest going into Europe ($140 million), Africa ($40 million) and Asia and neighbouring areas ($840 million).