July 26 (UPI) -- U.S. energy company Hess Corp. said Wednesday its net loss for the second quarter of $449 million masked improvements apparent before income taxes.
The net second quarter loss for Hess was 14 percent higher than the loss reported the same time last year.
"Our loss before income taxes was $425 million in the second quarter of 2017, compared with a loss before income taxes of $678 million in the prior-year quarter," the company explained. "The improved second quarter 2017 pre-tax results reflect higher realized crude oil selling prices and lower operating costs and exploration expenses that were partially offset by lower sales volumes."
Hess Corp. and its partner, Exxon Mobil, announced a final investment decision for the Liza oil prospect offshore Guyana last month. The companies put the reserve estimate for the broader area offshore Guyana as high as 2.75 billion barrels of oil equivalent, 10 percent higher than initially thought. Hess said in a statement the development cost of $3.2 billion was considered relatively low for a field that could yield 450 million barrels of oil after first oil is on stream by 2020.
Hess said earlier this year that Liza has "attractive" economics with oil prices as low as $40 per barrel. After lingering in the mid-$40 range for most of the latter portion of the first half of the year, Brent crude oil returned to trading near $50 per barrel in late July.
"Our company delivered strong operational performance and achieved a number of major strategic milestones in the quarter," CEO John Hess said in a statement. "We continue to take steps to reinforce our outstanding value-driven growth outlook and drive improving returns and lower capital and operating costs across our portfolio."
Net production, however, was lower from second quarter 2016 by 6 percent. From its portfolio in the Bakken shale basin in North Dakota, the company said production increased about 2 percent, though Gulf of Mexico output was down 5 percent. Production from Libya, a member of the Organizatin of Petroleum Exporting Countries, was stable, while new oil from Liza offshore Guyana is expected by 2020.
Operating costs for the company, meanwhile, were 8 percent lower than they were at this point last year. Nevertheless, Hess said it was cutting its spending plans on exploration and production by 4 percent to $2.15 billion.
Leasing the floating production facility for the project offshore Guyana will take up about $1.2 billion of the development cost for the Liza oil field.