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Hess suffers US$2.4B in losses in first quarter due to COVID-19
Hess Corporation announced on Thursday that it suffered a net loss of US$2.4B in losses for the first quarter of 2020, including impairment and other after-tax charges of US$2.3B due to the effects of the novel coronavirus.
The company’s Chief Executive Officer (CEO), John Hess said that the firm’s priorities in this low price environment are to preserve cash, preserve capability and preserve the long term value of its assets. During Hess’ 2020 first quarter earnings call yesterday, the official said that the company is in a strong position to manage through the market downturn and to prosper when oil prices recover with its low cost of supply and high return investments that will drive material cash flow growth and increasing financial returns.
In addition to this, it was noted by company officials that the corporation’s first priority in the midst of the pandemic has been the health and safety of the Hess workforce and local communities. In this regard, it was stated that a multidisciplinary Hess emergency response team has been overseeing plans and precautions to reduce the risks of COVID-19 in the work environment while maintaining business continuity based on the most current recommendations by government and public health agencies.
In response to the resulting sharp decline in oil prices, the corporation said that its focus is on preserving cash and capability and towards this end, it has further reduced its capital and exploratory budget for 2020 to US$1.9 billion, a 37 percent reduction from the original budget of $3.0 billion.
Kaieteur News understands that this reduction will be achieved primarily by shifting from six rigs to one rig in the Bakken Project it has in the USA and deferring discretionary spending across the portfolio including a six to twelve month deferral in the development of the Payara Field and reduced 2020 drilling activity on the Stabroek Block offshore Guyana.
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