Oil companies’ profits triple in 1st Quarter

Apr 26, 2024 ExxonMobil, News, Oil & Gas

Chief Executive Officer of Hess Corporation, John Hess

Kaieteur News – US oil producer, Hess Corporation saw its profits leap by $626M in the first quarter of 2024 thanks to higher production volumes in the Bakken shale in the US and the Stabroek block offshore Guyana.

This according to the company’s most recent first quarter report for the year. Hess’ net income, the company said, was US$972M in the three months ended 31 March, compared to $346 million in the first quarter of 2023, according to the company’s latest earnings report.

This would mean that Hess’s profits have almost tripled over the previous reporting period. According to Hess, its overall net production of oil and gas was 476,000 barrels of oil equivalent per day, up 27 percent from 374,000 barrels of oil per day (bpd) in 2023.

The Bakken production surged by 27,000 (bpd), according to Hess, “while Guyana offered up an additional 78,000 (bpd) this quarter.”

The first quarter results “substantially outperformed” expectations, according to a report from analyst firm TD Cowen. Overall production beat projections by 9 percent, while Hess’ Guyana output beat consensus by 28 percent, Cowen noted. Hess is still in line to be acquired by US supermajor Chevron for $53 billion, though that deal could be upended by arbitration challenges by ExxonMobil and CNOOC International over a right-of-first-refusal debate in the prolific Stabroek field, which ExxonMobil operates with a 45 percent stake.

Hess’ 30 percent stake in Stabroek would wind up in Chevron’s hands if the merger is still completed. CNOOC International owns 25 percent. The merger however is expected to drag out until the end of the year owing an arbitration challenge by ExxonMobil Guyana and China National Offshore Oil Corporation (CNOOC), over the 30 percent stake held by the company in the lucrative Stabroek Block. ExxonMobil Corporation is slated to release its first quarter 2024 financial results today (Friday, April 26, 2024).

Meanwhile CNOOC, yesterday reported that its first-quarter net profit surged 24% to a record, driven by higher realised oil prices and output growth. Net income for January-March, according to CNOOC rose to 39.7 billion yuan (US$5.48 billion) from 32.1 billion Yuan in the same period last year. This much is documented in the company’s filing with the Hong Kong Stock Exchange on Thursday. “CNOOC’s total net production during the period was 180.1 million barrels of oil equivalent (bpd), up 9.9 percent, credited to increased output from the company’s international operations which increased by 16.9 percent, “lifted by higher production in Guyana and Canada.”

As such, the company in January revised its 2024 production target by about 8 percent to a record 700 million to 720 million bpd, while raising the annual capital spending target to new highs. ExxonMobil in presenting its last report, for the fourth-quarter 2023, the Company’s Chief Executive Officer (CEO), Darren Woods had reported earnings of US$7.6B for the last quarter of the year. For the full year 2023, the company reported earnings of US$36B.

To this end, Woods had observed “…our consistent strategy and execution excellence across the business delivered industry-leading earnings and enabled us to return more cash to shareholders than our peers in 2023.”

According to Woods, at the time of the release of that report in February last, “These results demonstrate the fundamental improvements we’ve made to our business, reflecting our progress in high-grading our portfolio through investments in advantaged projects and select divestments, while, at the same time, driving a higher level of efficiency and effectiveness throughout the business. The foundation of our success comes from the resiliency, hard work and commitment of our people. As I reflect on our industry-leading results over the past year, I have a great sense of pride in what our people accomplished.”

• Chief Executive Officer of Hess Corporation, CNOOC, John Hess, production, quarter