Hess Corporation (NYSE: HES) has reported its financial and operational results for the first quarter of 2025, a critical period marked by significant developments in its global oil and gas production portfolio. This analysis provides an authoritative and quantitative overview of Hess’s Q1 2025 performance, with a focus on key themes including production growth, capital expenditures, and impacts anticipated from ongoing projects, notably in Guyana.
Hess Corporation, a leading independent energy company, is operating major oil developments globally, including the U.S. (Bakken and Gulf of America), Guyana, and Southeast Asia. The company is preparing for a significant expansion in production capacity offshore Guyana through the Stabroek Block.
Reported net income dropped to \(430 million (\)1.39 per share) in Q1 2025 from \(972 million (\)3.16 per share) in Q1 2024. Adjusted net income, excluding comparability items, was \(559 million (\)1.81 per share).
The decrease in net income primarily reflects lower realized oil selling prices (\(71.22 per barrel in Q1 2025 vs. \)80.06 in Q1 2024) and slightly lower sales volumes.
Oil and gas net production held steady at 476,000 boepd (barrels of oil equivalent per day) compared to the prior year’s quarter.
E&P capital and exploratory expenditures increased to \(1.085 billion in Q1 2025 from \)927 million in Q1 2024, driven by accelerated development activities in Guyana.
The largest oil development on the Stabroek Block to date, the Yellowtail project, is on track for startup in Q3 2025 with an initial gross production capacity of approximately 250,000 barrels per day, supported by the ONE GUYANA FPSO vessel which arrived offshore Guyana in mid-April 2025.
In the U.S. Bakken region, net production increased to 195,000 boepd due to increased drilling and completion activity.
The Gulf of America offshore production reached 41,000 boepd, up from 31,000 boepd in Q1 2024, aided by the Pickerel well startup in mid-2024.
Hess’s Q1 2025 net income represents a 55.8% decrease from the previous year’s quarter, principally due to a 11% decline in oil prices affecting revenue, though production volumes remained flat.
Cash operating costs increased to \(12.27 per boe from \)10.79 per boe, mainly due to higher maintenance activities.
The company expects Q2 2025 production to increase slightly to a range of 480,000 to 490,000 boepd.
Capital expenditures for the full year 2025 are projected at approximately $4.5 billion, emphasizing robust investment especially in Guyana developments.
Hess’s continued expansion in Guyana aligns with its strategic focus on high-impact offshore projects, reflecting its confidence in long-term value creation despite near-term price volatility.
This Q1 result is consistent with prior earnings calls, where management highlighted development momentum in Guyana and efforts to maintain production stability amid fluctuating commodity prices.
Operational challenges such as increased maintenance and legal charges in North Dakota are impacting cost efficiency but are weighed against expected production gains.
Net profit margin stood at 21.27%, reflecting solid profitability despite volatile commodity markets.
Operating margin was robust at 33.67%, supported by controlled operating expenses and strong production output.
Return on assets was 11.95%, demonstrating effective asset utilization.
Free cash flow margin was modest at 5.02%, indicating ongoing capital-intensive investments.
This detailed insight into Hess Corporation’s Q1 2025 earnings underscores the company’s strategic focus on maximizing production capacity, especially in Guyana, while managing operating costs and navigating market headwinds. Investors and stakeholders should watch the upcoming startup of Yellowtail and subsequent developments as key catalysts for growth.
For detailed financial data and the original full report, please visit the source: Hess Corporation Q1 2025 8-K Report.
Tags: Hess Q1 2025, Guyana Oil Development, Stabroek Block, Production Growth, Energy Sector Capital Expenditure