| Hess' (HES) Transition & Efficient Operations to Fuel Growth | |
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On Aug 7, 2015, we issued an updated research report on Hess Corporation HES.
Hess is a global exploration and production (E&P) company that develops, produces, purchases, transports and sells crude oil and natural gas.
Hess is undergoing a transition from an integrated oil and gas company to a predominantly E&P entity, thereby shifting its growth approach from high-impact exploration to low-risk unconventionals and a smaller, more focused exploration portfolio. The company divested its downstream businesses that include energy marketing, terminals, retail marketing and refining operations. In view of the global economic slowdown and new refining capacity entering the world market, the aforesaid decisions will help enhance Hess’ shareholder value.
The company’s priority remains investment in future growth with a balanced approach between unconventional, exploitation and exploration. Such investments are expected to realize an average annual production growth of 5–8% through 2017 and beyond. With growing free cash flow over the years, Hess will be able to increase its share buyback as well as dividend. For 2015, the company expects its capital expenditure at $4.7 billion, roughly 16% less than $5.6 billion spent in 2014. Recently, it divested its retail business and is in the process of shedding its upstream assets in Thailand as well as its trading business. The amount raised through asset sale is expected to help fund E&P investments. However, the company will continue to look at all opportunities to enhance long-term shareholder value.
We expect unconventional oil (including sources like oil shales, coal-based liquid supplies etc.) and gas extraction (using non-traditional techniques) to play important roles in the world energy mix in the long run. Following the build up of position in the North American Bakken oil field for unconventional oil, Hess is pursuing unconventional gas in the Marcellus Shale play. Hess’ exposure to Eagle Ford and Utica shales, along with several global development projects (such as Ghana, Brunei, North Sea, Gulf of Mexico, Southeast Asia and Kurdistan), is likely to drive growth in 2015 and beyond.
Hess remains on track with its multi-year transformation program. However, to support its capital expenditures through 2015, the company continues to be highly dependent on major asset sales. Hence, its growth and returns picture will likely be hindered by the asset sale programs in the near term. Moreover, in 2014, Hess registered a fall in its reserves. As of year-end 2014, Hess’ proved reserves tally was 1.43 billion oil-equivalent barrels, down 0.4% from the 2013 level. The current scenario continues to be gloomy and depicts lower reserve and production in 2015.
Moreover, Hess supports its capital expenditures through major asset sales, which may hinder future production.
Key Picks in the Sector
Hess has a Zacks Rank #3 (Hold). Other stocks from the same space that warrant a look are Seadrill Partners, LLC SDLP, CVR Refining, L.P. CVRR and Valero Energy Partners, L.P. VLP. All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HESS CORP (HES): Free Stock Analysis Report SEADRILL PTNRS (SDLP): Free Stock Analysis Report CVR REFINING LP (CVRR): Free Stock Analysis Report VALERO EGY PTNR (VLP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Hess Corporation
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CODE : HES |
ISIN : US42809H1077 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Hess Corp. est une société d’exploration minière et de pétrole basée aux Etats-Unis D'Amerique. Hess Corp. est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 47,8 milliards US$ (44,9 milliards €). La valeur de son action a atteint son plus bas niveau récent le 17 novembre 1989 à 10,06 US$, et son plus haut niveau récent le 18 avril 2024 à 151,78 US$. Hess Corp. possède 315 053 615 actions en circulation. |