U.S. oil and gas producer Hess Corp said on Wednesday that third-quarter revenue surged nearly 40 percent as it benefited from higher oil prices, but warned that operational issues caused by U.S. hurricanes would weigh on production for the rest of the year.
Shares of Hess, which pumps oil in the U.S. Gulf of Mexico and is one of the largest producers in North Dakota’s Bakken shale, fell 5.3 percent in morning trading. The company also reported a quarterly loss that nearly doubled due to changes in tax accounting.
Hess earlier this week sold its Norwegian and Equatorial Guinea assets for a combined $2.65 billion, part of a plan to focus more on its U.S. and Guyana operations.
“We are successfully executing our strategic plan to focus our portfolio by investing in our highest return assets and divesting mature higher cost assets,” Chief Executive John Hess said in a statement.
U.S. crude prices CLc1 rose about 12 percent in the third quarter, boosted by production cuts by OPEC and other major oil countries such as Russia.
Hess had said in September that the downtime due to Harvey caused the loss of production of several thousand barrels of oil equivalent per day (boepd) in the quarter.
On Wednesday, the company said production in the U.S. Gulf of Mexico dipped 3.3 percent to 59,000 boepd during the quarter.
Total quarterly production, excluding Libya, fell 4.8 percent.
Harvey tore through Corpus Christi in southern Texas on Aug. 25, drenching the Houston area with record rainfall, and knocking out nearly a fifth of U.S. oil refining capacity in the Gulf Coast.
The company said that downtime caused by the hurricane would continue to weigh on production in the fourth quarter, Reuters reported.
During the quarter, Hess said it discovered a new oil field containing about 500 million barrels of oil equivalent in its Guyana operations, where the company has a 30 percent interest. Exxon Mobil Corp (XOM.N) is the project’s operator.
Total revenue rose to $1.67 billion in the third quarter due to a 13.3 percent jump in average realized selling prices of crude oil.
However, net loss attributable to Hess was $624 million, or $2.02 per share, in the quarter ended Sept. 30, compared with a loss of $339 million, or $1.12 per share, a year earlier.
Hess said third-quarter results included an impairment charge of $2.5 billion related to how it accounts for taxes.
Reporting by Yashaswini Swamynathan in Bengaluru and Ernest Scheyder in Houston
