Oil and gas exploration and production company Hess Corp. (NYSE: HES – $49.65) posted a deeper loss in the latest quarter, though earnings slid less than expected as the company cut spending to pace with the slowdown in the global energy market. The prolonged swoon in energy prices, particularly in crude oil, continues to damp the energy provider’s results. While recovering somewhat over the past few months, the average crude selling price fell 9.1% to $41.50 a barrel from $45.66 a year earlier. U.S. crude prices have nearly doubled from a low of $26.05 in February and have closed above $50 per barrel for the past 10 of 12 days. Still, they remain below the high of $115 hit in mid-2014. Chief Executive John Hess said the company continues to take steps to “materially reduce our spending”. New York City-based Hess posted an adjusted per-share loss of $1.12, wider than $1.03 loss a year ago. Oil and gas production fell 16% to 314,000 barrels of oil equivalent a day and costs were lower by nearly 18% from a year ago. Revenue dropped 29% to $1.2 billion. Analysts had expected a loss of $1.24 a share on $1.18 billion in revenue.
The depressed shares should recover once crude prices return to more historic levels. Until then, investors will need to wait this one out. The $1.00 annual dividend yielding 2% looks safe right now, as the company’s decent balance sheet is supported by the high amount of cash on hand. Positive cash flow, sufficient credit facilities plus manageable long-term debt should sustain the payout.