Oct 26 (Reuters) - U.S. oil and gas producer Hess Corp's (HES.N) third-quarter profit topped Wall Street estimates on Wednesday, as tighter energy supplies following Russia's invasion of Ukraine sent oil prices to their highest level in years.
Oil and gas markets have cooled from earlier this year but remain near multi-year highs, signaling energy companies this year will post their strongest results in decades.
Hess also benefited from sharply higher output and sold its oil at an average $93.95 per barrel, up 38% from a year ago, the company said.
Shares of the company rose nearly 6% to $143.36 in midday trading as U.S. oil prices gained 3% to $88 a barrel.
The company's production climbed 32% to 351,000 barrels of oil and gas per day (boepd) on higher output in Guyana and North Dakota's Bakken shale field. It expects current-quarter output to come in at 370,000 boepd.
The New York-based company raised its full-year 2022 production guidance by 1.6% to 325,000 boepd.
Global oil demand likely will rise to 101 million bpd next year, Chief Executive John Hess told analysts on a conference call, adding that any pullback in demand due to a recession would not be as stark as in 2008's financial crisis.
"The risk, I think, is to the upside. What is going to happen with Russian oil supply? What is going to happen with Russian gas supply?" he said.
Oilfield inflation in areas including the Bakken shale where it operates has jumped 15% to 20% versus last year. But Hess has been able to contain cost increases to about half that rate.
In Guyana, where Hess is part of a consortium that includes Exxon Mobil Corp (XOM.N), the group will boost spending by between $500 million and $700 million next year to around $1.6 billion.
Hess expects to sell nine cargoes of oil, each with 1 million barrels, from Guyana in the fourth quarter, up from eight cargoes last quarter.
For full-year 2022, Hess said its Guyana net production is forecast to be about 77,000 bopd.
The company expects Bakken net production between 165,000 boepd and 170,000 boepd in the fourth quarter, higher than a prior estimate of 160,000 boepd to 165,000 boepd.
Net income attributable to the company rose to $515 million, or $1.67 per share, in the third quarter ended Sept. 30, from $115 million, or 37 cents per share, last year.
Hess posted an adjusted profit of $1.89 per share, beating analysts' consensus estimate of $1.87 per share, according to Refinitiv.
Hess remains focused on returning some 75% of free cash flow to shareholders, and will give "strong consideration" to an increase to its regular dividend next year, it said.
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October 26, 2022 at 11:25PM
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Oil producer Hess tops profit estimates on stronger energy prices - Reuters
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