Hess Corp. kept its nose to the drill bit in the fourth quarter, ignoring a pending acquisition by Chevron Corp. as the E&P blasted past analysts’ expectations—a 7% increase in year-over-year Bakken volumes and swelling production offshore Guyana, all while spending less money.

“Hess' growth outlook remains highly differentiated amongst E&Ps, with a resource base that continues to grow, and outsized CFO [cash flow from operations] growth (~20%/yr) in a sector that is increasingly ex-growth,” Piper Sandler analyst Ryan M. Todd wrote in a Jan. 29 research report.

Hess’ net Bakken production in fourth-quarter 2024 averaged 208,000 boe/d, up from 194,000 boe/d in fourth-quarter 2023. The increased production reflected increased drilling and completion activity.

Offshore Guyana, where Exxon Mobil is operator, net production increased 52% yoy to 195,000 boe/d.

The increased volumes helped Hess to generate net income of $542 million that partially offset lower realized selling prices and higher exploration expenses in the quarter.

Hess’ oil volumes beat analyst estimates by 3%, with Bakken production 2% above consensus and Guyana beating expectations by 5%, said David Deckelbaum, managing director at TD Cowen.

At a time when other E&Ps are scrambling for inventory, Hess also estimated its year-end proved reserves at 1.44 Bboe with organic reserve replacement increased 138% as finding and developing costs averaged $19.67 per boe.

Todd said that Hess “continues to make the most of its independent status, reporting another solid beat” driven by higher crude production, lower operating costs and lower than expected corporate expense of $61 million versus Piper Sandler’s estimate of $111 million. 

Overall, Hess’ capex of $1.68 billion was 1% below estimates, Deckelbaum said. Bakken capex was higher than expected at $331 million. But that was offset by Guyana capex of $1.21 billion, 8% lower than consensus, and included the purchase of the Liza Destiny and Prosperity FPSOs ($635 million).

Hess’ first-quarter 2025 guidance fell about 4% below consensus. The company anticipated production at 465,000 boe/d to 475,000 boe/d, reflecting planned Guyana maintenance and weather impacts in the Bakken. Hess plans to maintain a four-rig program in the Bakken, guiding volumes 3% below estimates to 195,000 boe/d to 200,000 boe/d, Todd said.

Hess did not hold an earnings call due to the Chevron acquisition. The company provided no updates on the deal, which is scheduled for arbitration in mid-2025. The arbitration centers around Hess’ 30% Guyana interest in the Stabroek Block. Exxon Mobil Corp., which hold 45% interest, and CNOOC, which holds 25%, have argued they have a right of first refusal to Hess’ ownership interests.

Earnings

Hess reported net income of $1.76 per share in the fourth quarter, compared to $1.34 per share yoy.

The company saw average realized crude oil selling prices of $72.10/bbl, down yoy from $76.63/bbl. Average NGL selling prices in the fourth quarter were $23.05/ bbl, up over 2023’s $20.92/bbl. Average realized natural gas selling prices were $4.10/Mcf, compared with $4.51/Mcf in the fourth-quarter 2023.

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