HES Financial Analysis

Analysis Date: 1/24/2025

Business Model

Hess Corporation generates revenue primarily through oil and gas exploration and production operations

Revenue Sources

• Oil production (primary revenue source - 77% of revenue)
• Natural gas liquids (NGL) production
• Natural gas production

Revenue Distribution by Channel

• United States: $1,674M (53% of Q3 2024 revenue)
• International: $1,509M (47% of Q3 2024 revenue)

Income Statement Analysis

• Net production increased 17% YoY to 461,000 boepd
• Average realized crude oil price decreased to $77.06/barrel from $81.53/barrel YoY
• Operating costs increased 12.8% YoY due to higher production volumes

Balance Sheet Analysis

• Strong balance sheet with $1.86B in cash
• Debt to capitalization ratio improved to 43% from 47.8% at year-end 2023

Cash Flow Analysis

• Strong operating cash flow growth of 53% YoY
• Capital expenditures increased due to Guyana development

Capital Allocation

Company increased quarterly dividend by 14% to $0.50 per share. Capital expenditures focused on Guyana development with 2024 budget increased to $4.9B from $4.2B due to accelerated FPSO purchases.

Management Commentary

Strong production growth with 17% increase YoY

Increased capital budget due to accelerated FPSO purchases

Overall Sentiment: Positive with focus on production growth and Guyana development

Recommendation

Rating: Buy

Reason for Rating: Strong production growth and Guyana development progress support positive outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/24/2025, 5:08:02 AM