Amerada Hess boosts earnings on big downstream improvement

Allen Baker, Petroleum News contributing writer

Amerada Hess reported net income of $176 million for the first quarter, a gain of 25 percent compared with the $141 million the company earned a year earlier. The downstream segment provided the impetus for the New York-based company as E&P earnings actually declined on 8 percent lower volumes.

The sale of Amerada Hess’ 1.5 percent share of the trans-Alaska oil pipeline to ConocoPhillips produced a special gain of $31 million in the quarter, but asset sales in the same quarter a year ago brought in a balancing $28 million.

Upstream earnings were $146 million in the quarter, down 30 percent from $210 million a year earlier. Total production was 421,000 barrels of oil equivalent daily, down 8 percent. With hedging, Amerada Hess didn’t show the big gain in crude sales prices that other companies enjoyed. The average price of a barrel of oil sold by Amerada Hess was $25.55 in the quarter, up $2.60 from the figure a year earlier.

U.S. natural gas showed a bigger percentage improvement at $4.89 per thousand cubic feet, up 43 percent. Refining and marketing showed earnings of $136 million, against a loss of $22 million a year ago on refinery runs that were essentially flat at 198,000 daily barrels. Revenues rose 45 percent to $4.30 billion, from $2.96 billion in the first quarter of 2002.