Hess Corp. (NYSE: HES) reported Q4 EPS of $0.18, $0.05 worse than the analyst estimate of $0.23. Revenue for the quarter came in at $2.53 billion versus the consensus estimate of $2.34 billion.

Exploration and Production:

Exploration and Production earnings were $92 million in the fourth quarter of 2014, compared with $1,029 million in the fourth quarter of 2013. Adjusted net income was $147 million in the fourth quarter of 2014 and $436 million in the fourth quarter of 2013.

The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was down 24 percent to $74.97 per barrel in the fourth quarter of 2014 from $98.27 per barrel in the fourth quarter of 2013 reflecting the decline in benchmark crude oil prices. Excluding fourth quarter pre-tax hedging gains of $169 million, the realized crude oil selling price was $67.68 per barrel. The average worldwide natural gas liquids selling price was $22.37 per barrel, down from $44.59 per barrel in the year-ago quarter while the average worldwide natural gas selling price was $5.24 per mcf in the fourth quarter of 2014 compared with $6.97 per mcf in the fourth quarter a year-ago. The Corporation has not entered into any commodity price hedges for 2015.

Oil and gas production was 362,000 boepd, up 18 percent from 307,000 boepd in the fourth quarter of 2013. Assets contributing to the increase in production were the Bakken shale play (35,000 boepd), our Utica wet gas acreage (12,000 boepd), Gulf of Mexico (12,000 boepd), Denmark (10,000 boepd) and Libya (10,000 boepd). Asset sales reduced fourth quarter 2014 production by approximately 30,000 boepd.

Excluding production from assets sold and Libya, pro forma net production was 352,000 boepd in the fourth quarter of 2014, an increase of 28 percent from 275,000 boepd in the fourth quarter of 2013. The Corporation expects production, excluding Libya, to average between 350,000 boepd to 360,000 boepd in 2015, an increase of 10 percent to 13 percent from pro forma production of 318,000 boepd in 2014. The increased production in 2015 will be driven by a full year of production from the Tubular Bells Field in the Gulf of Mexico following first production in late 2014.

Oil and Gas Reserve Estimates:

Oil and gas proved reserves were 1,431 million barrels of oil equivalent (boe) at December 31, 2014, compared with 1,437 million boe at December 31, 2013. During 2014, the Corporation added 193 million boe to proved reserves, net of revisions, primarily relating to the Bakken, Gulf of Mexico, Utica, and North Malay Basin. These net additions, which are subject to final review, replaced approximately 158 percent of the Corporation’s 2014 production at a finding and development cost of approximately $28.75 per boe. Asset sales in 2014 reduced proved reserves by 77 million boe, resulting in a year-end 2014 reserve life of 11.7 years.

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