On July 31, 2024, Hess Corp (HES, Financial) released its 8-K filing for the second quarter of 2024. Hess Corp, an independent oil and gas producer with key assets in the Bakken Shale, Guyana, the Gulf of Mexico, and Southeast Asia, reported net income of $757 million, or $2.46 per share, compared to $119 million, or $0.39 per share, in the same quarter last year. Adjusted net income was $809 million, or $2.62 per share, up from $201 million, or $0.65 per share, in Q2 2023.
Performance and Challenges
Hess Corp's performance in Q2 2024 was marked by a significant increase in production volumes and realized selling prices. Oil and gas net production rose to 494,000 barrels of oil equivalent per day (boepd), a 28% increase from 387,000 boepd in Q2 2023. Notably, Bakken net production increased by 17% to 212,000 boepd, while Guyana net production surged by 75% to 192,000 barrels of oil per day (bopd).
Despite these gains, the company faced challenges, including planned downtime in Guyana and Southeast Asia, which could impact future production levels. Additionally, the company's exploration and production (E&P) capital and exploratory expenditures increased to $1,151 million from $933 million in the prior-year quarter, reflecting higher development activities in Guyana and increased drilling in the Gulf of Mexico and the Bakken.
Financial Achievements
Hess Corp's financial achievements in Q2 2024 are noteworthy. The company's average realized crude oil selling price was $80.29 per barrel, up from $71.13 per barrel in Q2 2023. The average realized natural gas liquids (NGL) selling price also increased to $20.07 per barrel from $17.95 per barrel, while the average realized natural gas selling price rose to $4.22 per mcf from $3.82 per mcf in the prior-year quarter.
These achievements are crucial for Hess Corp, as higher selling prices and increased production volumes directly contribute to improved profitability and cash flow, enabling the company to fund its capital expenditures and reduce debt.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income | $757 million | $119 million |
| Adjusted Net Income | $809 million | $201 million |
| Net Income per Share (Diluted) | $2.46 | $0.39 |
| Adjusted Net Income per Share (Diluted) | $2.62 | $0.65 |
| Total Revenues and Non-Operating Income | $3,255 million | $2,320 million |
Income Statement Highlights
Hess Corp reported total revenues and non-operating income of $3,255 million in Q2 2024, up from $2,320 million in Q2 2023. The company's costs and expenses totaled $2,108 million, compared to $1,955 million in the prior-year quarter. Net cash provided by operating activities was $1,893 million, a significant increase from $974 million in Q2 2023.
Analysis of Performance
Hess Corp's strong performance in Q2 2024, driven by higher production volumes and realized selling prices, underscores the company's operational efficiency and strategic investments in key assets. The substantial increase in net income and adjusted net income highlights the company's ability to capitalize on favorable market conditions.
However, the challenges of planned downtime and increased capital expenditures may pose risks to future production and profitability. Investors should monitor these factors closely as they could impact the company's financial performance in the coming quarters.
For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Hess Corp for further details.
