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Hess posts loss, but notes production gains

Bakken shale provided silver lining for U.S. midstream company.

By Daniel J. Graeber
Hess Corp. reports second quarter loss, but credits Bakken shale area with providing silver lining to latest fiscal report. File photo by Gary C. Caskey/UPI | <a href="/News_Photos/lp/49c09c8da2a32ff81af5abd423557735/" target="_blank">License Photo</a>
Hess Corp. reports second quarter loss, but credits Bakken shale area with providing silver lining to latest fiscal report. File photo by Gary C. Caskey/UPI | License Photo

NEW YORK, July 29 (UPI) -- Though posting a net loss from exploration and production activities, Hess Corp. said nevertheless production was up 23 percent year-on-year.

Hess issued preliminary estimates for the second quarter, reporting an adjusted net loss of $147 million, compared with net income of $432 million for second quarter 2014. Exploration and production activities accounted for the bulk of the overall loss.

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In terms of production, the company said its net 310,000 barrels of oil equivalent per day for the second quarter was up 23 percent from last year. Production from the Bakken shale in North Dakota accounted for about 12 percent of the net gains, with the Utica shale in the Midwest adding 6 percent. Gains from the U.S. Gulf of Mexico and joint developments in Malaysia and Thailand also contributed.

Hess, which has headquarters in New York, in April said it was cutting its overall capital and exploration budget for 2015 by more than 10 percent to $4.4 billion. Spending in Bakken, a shale area at the heart of the U.S. oil boom, was cut by 18 percent to $1.8 billion.

In early July, the company completed the sale of half of its midstream holdings in the Bakken reserve area to Global Infrastructure Partners for cash consideration of $2.68 billion, which Chief Executive Officer John Hess said brought "immediate value" to shareholders.

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"We remain confident that our financial strength, resilient portfolio and proven operating capabilities position us well in the current low oil price environment as well as for a future price recovery," he said in a statement.

Net production for Hess from its Bakken holdings increased by nearly half to 119,000 barrels of oil equivalent per day from the previous year.

State government data show oil production for May, the last full month for which data are available, was 1.2 million barrels per day, its second highest rate ever and 32,000 bpd above April's average rate.

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