Hess earnings rise on asset sales, higher prices

NEW YORK (AP) -- Oil exploration company Hess Corp. reported second-quarter net income more than doubled it sold its Russian subsidiary and got a lift from strong oil and gas selling prices even though production declined.

It reported net income of $1.43 billion, or $4.16 per share, for the quarter that ended June 30. If not for the sale of its Russian subsidiary Samara-Nafta, its net income would have fallen to $520 million, or $1.51 per share.

A year earlier it earned $549 million, or $1.61 per share in the second quarter.

Analysts surveyed by FactSet had been expecting an adjusted profit of $1.41 per share for the most recent quarter.

Revenue rose 23.6 percent to $4.11 billion from $3.32 billion a year earlier.

Oil and gas production fell 20.5 percent to 341,000 barrels of oil equivalent per day because of asset sales in Russia, the U.K. North Sea, and Azerbaijan, partially offset by an increase in the Bakken area. Bakken production rose 16 percent to 64,000 barrels of oil equivalent per day. Its full-year guidance was unchanged at 340,000 to 355,000 barrels per day.

Its worldwide average crude oil selling price, including hedging, was $97.89 per barrel, up from $86.86 a year earlier. Its average selling price for natural gas was $6.44 per thousand cubic feet, up from $5.94 a year earlier.

Hess has been shifting away from refining and toward exploration and production. As part of that plan, it's selling off some assets. So far this year it has sold $3.5 billion in assets. This week it also announced the sale of its energy marketing business to Direct Energy for $1.03 billion.

The rest of its planned sales for assets in Indonesia and Thailand, as well as sales of terminals, retail, and trading business, "are well underway," the company said. It also closed a New Jersey refinery in February.

It's using the money from asset sales so far to cut debt by $2.4 billion and add cash to its balance sheet.

Hess shares rose $1.91, or 2.6 percent, to $75.10 in midday trading.

Source: http://news.yahoo.com/hess-earnings-rise-asset-sales-162217553.html

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