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Jan 27 (Reuters) - Oil producer Hess Corp lost less money than expected in the fourth quarter as it managed to cut costs to weather the low-price storm that has battered the entire energy industry.
The company, which produces oil in North Dakota's Bakken Shale and the U.S. Gulf of Mexico, slashed its budget and curtailed production plans, saying it could no longer justify boosting output in the wake of a more-than 70 percent drop in oil prices during the past 18 months.
The new approach helped push up Hess shares nearly 7 percent to $37.18 per share on Wednesday morning, though many oil producer stocks rose alongside crude prices.
"Our focus is on value, not volume," Chief Executive John Hess said on a conference call with investors. "We do not think it makes sense to accelerate production in the current price environment, particularly given the recent further deterioration in the oil markets."
Hess posted a net loss of $1.82 billion, or $6.43 per share, in the fourth quarter ended Dec. 31, compared with a net loss of $8 million, or 3 cents per share, in the year-ago period.
Excluding one-time items, the company lost $1.40 per share.
By that measure, analysts expected a loss of $1.48 per share, according to Thomson Reuters I/B/E/S.
Hess stressed that for 2016 it has enough cash to fund both its capital budget and dividend, which will cost about $2.5 billion, less than the company's $2.7 billion in cash reserves.
"We don't need any cash flow from operations to fund the capital budget or dividend," John Rielly, Hess' chief financial officer, said on the conference call.
Oil and gas production inched up to 368,000 barrels of oil equivalent per day (boepd) in the quarter, from 362,000 boepd, a year earlier.
In North Dakota's Bakken Shale, Hess plans to cut the number of drilling rigs it operates to two. By contrast, the company ran 14 Bakken drilling rigs as recently as 2014.
"We believe it is prudent to manage the business assuming (oil) prices will stay lower for longer," Greg Hill, the company's operating chief, said on the conference call.
(Reporting by Ernest Scheyder in Houston and Swetha Gopinath in Bengaluru; Editing by Maju Samuel and Marguerita Choy)