(Reuters) – Oil and gas producer Hess Corp (HES.N) today beat Wall Street estimates for second-quarter profit, buoyed by higher production at the Bakken shale field in the U.S. and disclosed a new oil discovery in the Gulf of Mexico.
Crude prices have slipped from the multi-year highs hit last year following Russia’s invasion of Ukraine but remain strong enough to encourage oil and gas producers to drill profitably.
The company’s net production jumped 28% to 387,000 barrels of oil equivalent per day (boepd) in the April-June quarter, while worldwide average realized crude oil selling price, excluding hedges, tumbled nearly 33% to $73.74 per barrel.
“The primary driver was higher than expected volumes in the Bakken which was partially offset by weaker realization,” Jefferies analysts said in a note.
Quarterly production at the Bakken shale field in North Dakota averaged nearly 30% higher than last year, the company said, helped by increased drilling and well completion activity and higher natural gas volumes.
Bakken ranks second in the U.S. in terms of oil production after the Permian basin.
New York-based Hess also raised its annual production forecast for the second time this year to 385,000 to 390,000 boepd from 365,000 to 375,000 boepd, betting on production starting at the Payara project in Guyana.
The company holds a 30% stake in a consortium that operates in Guyana that has made more than 30 discoveries in the South American country’s offshore waters since 2015.
Exxon Mobil (XOM.N) and China’s CNOOC (0883.HK) are part of the consortium.
In the second quarter, Hess sold nine cargos of crude oil from Guyana compared with six in the prior-year quarter. Production jumped about 64% from the country, the company said.
The company said the Pickerel-1 well in the Gulf of Mexico, where it struck oil in July, is expected to start production in mid-2024.
On an adjusted basis, the company reported a net income of 65 cents per share, compared with analysts’ estimate of 50 cents, according to Refinitiv data.
