Feb 5, 2019

Hess May Report More Losses, But A Turnaround Is Near

By Sarfaraz A. Khan

Hess Corporation delivered better-than-expected production and earnings in Q4-2018, but the company continues to lose money and burn cash flows. Hess could report additional losses and negative free cash flows in the coming quarters if oil prices stay weak.

Hess has some downside protection with oil hedges, solid liquidity, and a flexible CapEx plan, which will help the company as it navigates the oil price slump. The company is gearing up to start the Guyana project by early-2020, which can fuel Hess’s recovery.

Hess Corporation will likely post losses and burn cash flows in 2019 due to weakness in oil prices and around 40% increase in capital expenditure. However, the company is prepared to weather the slump and is eyeing a turnaround from 2020 as its biggest offshore project located in Guyana comes online.

Hess has recently released its fourth-quarter results in which it posted an adjusted loss of $77 million, or $0.31 per share, down from a loss of $304 million, or $1.01 per share in the same quarter of 2017. This was better than analysts' consensus estimate of a loss of $0.41 per share. Higher levels of … Read full article at Seeking Alpha