Hess producing more despite taking a loss

NEW YORK, April 27 (UPI) -- Even as it reported a loss for the first quarter of the year, U.S. energy company Hess Corp. said it was producing more from its U.S. assets than in late 2015.

Crude oil prices are rallying with reckless abandon, though current levels are still about 25 percent lower than they were at this point last year. Oil remains under pressure, albeit weakening, from a market tilted toward the supply side as demand falters in a lackluster global economy.

Hess Corp. reported net production from the Bakken shale reserve area in North Dakota in Montana was up 2.7 percent from the fourth quarter to 110,000 barrels of oil equivalent per day. In the Utica shale natural gas basin in the eastern United States, the company said its net production was up 70 percent to 29,000 barrels of oil equivalent per day.

Output from its onshore U.S. portfolio came despite a decrease in rig activity. Companies are spending less on exploration and production because of lower crude oil prices. Hess said its spending on exploration and production was down by roughly 50 percent.

Hess last year set a 2016 spending target of between $2.9 billion and $3.1 billion. By January, the company revised its full-year guidance lower to $2.4 billion, 40 percent below 2015 spending levels.

In the Gulf of Mexico, which federal U.S. reports say is less exposed to the pressure from lower oil prices, Hess reported net production increased 4.5 percent to 69,000 barrels of oil equivalent per day over the fourth quarter.

"With our balance sheet strength, oil-leveraged portfolio and attractive growth opportunities, we believe the company is well positioned to deliver strong cash flow growth and long term value as oil prices recover," CEO John Hess said in a statement.

The company nevertheless said it recorded a net loss of $451 million in the first quarter, against a $314 million loss in the previous period. Its average selling price for crude oil during the first quarter was about 35 percent lower, while the selling price for natural gas was off 27 percent.