Hess Earnings: Boosts Production Guidance and Purchases Liza FPSO Ahead of Chevon Deal

Hess’ third-quarter earnings were solid, in our view. Our fair value estimate is now dependent on our Chevron fair value estimate of $172 per share and the merger exchange ratio, so that remains unchanged at $176 per share. Our narrow moat rating is also unchanged. Hess boosted its production guidance for 2023 to be about 390,000 barrels of oil equivalent a day, at the upper end of its prior guidance. The outperformance is primarily due to the Bakken and higher levels of drilling activity and more natural gas liquids obtained via percentage of proceeds contracts. Pretax income fell to $817 million from $888 million last year, as lower realized oil and gas prices more than offset higher production.