Hess Seeking Partners for Assets in Kurdistan & Ghana

Hess Corp reported a bigger-than-expected quarterly profit due to higher oil and gas prices and said it was seeking partners to explore two fields in Kurdistan and a block offshore Ghana, sending its shares up 3.5 percent to a two-year high. The company, which is looking to sell its retail and trading businesses to focus on exploration and production, also said it expected higher production from North Dakota's Bakken shale field in the second half of the year.

Hess said in March it would sell its retail gasoline and marketing and trading businesses in response to a campaign by activist investor Elliott Management to break up the company. After months of sparring over governance and long-term strategy, Hess struck a deal with Elliott in May to place three directors backed by the hedge fund on its board. "The board transition has gone very well. I would characterize the first board meeting that we had in June as very constructive, and we are totally focused on executing the strategy we have outlined," Chief Executive John Hess said on a post-earnings conference call.

The company said that British utility Centrica Plc would buy its energy marketing unit for about $1.03 billion. Including the sale of the marketing business, Hess has raised $4.5 billion from asset sales this year. The company also plans to sell producing assets in Indonesia and Thailand.

Hess owns a 90 percent stake in the Deepwater Tano/Cape Three Points block in Ghana, one of the top 10 oil producers in sub-Saharan Africa. Ghana National Petroleum Co owns the remaining stake. Hess has a production-sharing agreement for the Dinarta and Shakrok fields in the Kurdistan region of northern Iraq. Kurdistan began exporting crude oil last July, despite the Iraq government's claim to sole authority over crude exports.

Oil and gas production in the second quarter fell to 341,000 barrels of oil equivalent per day (boe/d) from 429,000 a year earlier. The decrease was mostly due to asset sales in Russia, the UK North Sea and Azerbaijan, offset by a 16 percent rise in Bakken output, Hess said. The company expects Bakken production to go up in the second half of the year due to the transition to pad drilling, a technique where more wells are sunk from a single spot.

The average worldwide crude oil selling price realized by Hess rose 12 percent in the quarter, while natural gas prices rose about 8 percent. Net income nearly tripled to $1.43 billion, or $4.16 per share, from $549 million, or $1.61 per share. Adjusted profit was $1.51 per share. By that measure, analysts on average had expected earnings of $1.41 per share, according to Thomson Reuters I/B/E/S. Hess shares were up about 3 percent at $75.14 on the New York Stock Exchange on 31 July.

For more information about related Opportunities and Key Players visit West Africa Projects