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Hess Beats Q3 Earnings Estimates Ahead Of Acquisition By Chevron

Hess Corporation reported on Wednesday earnings for the third quarter that beat analyst estimates, after announcing earlier this week it had agreed to be acquired by supermajor Chevron.

Hess said its net income stood at $504 million, or $1.64 per share, for the third quarter of 2023, slightly down from the $515 million net income for the same period of 2022, but higher than the analyst consensus of $1.22 earnings per share.

Hess reported higher production in the Bakken shale play in the United States and offshore Guyana for the third quarter.

The company’s net production from the Bakken was 190,000 barrels of oil equivalent per day (boepd) in the third quarter of 2023, compared with 166,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity and higher NGL and natural gas volumes received under the percentage of proceeds contracts due to lower commodity prices.

At Guyana’s offshore Stabroek Block – where Hess’s share is 30% – net production for the company from the Liza Destiny and the Liza Unity FPSOs totaled 108,000 bopd in the third quarter of 2023, compared with 98,000 bopd in the prior-year quarter. In the third quarter of 2023, Hess sold nine cargos of crude oil from Guyana, compared with eight cargos in the third quarter of 2022.

Earlier this week, Chevron said it would buy Hess Corporation in an all-stock transaction valued at $53 billion in another mega deal in the oil industry that will give the U.S. supermajor exposure to Guyana’s large offshore oil reserves.

The all-stock transaction is valued at $171 per share based on Chevron’s closing price on October 20, 2023. The total enterprise value, including debt, of the transaction is $60 billion, Chevron said in a statement on Monday.

The acquisition of Hess, which is expected to close in the first half of 2024, diversifies Chevron’s portfolio with assets offshore Guyana and in the U.S. Bakken.

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By Tsvetana Paraskova for Oilprice.com

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