Oil and gas company Hess Corporation has reported a net income of $252 million in the first quarter of 2021, a completely different picture than the one from the first quarter of 2020 when the company had a net loss of $2,4 billion.

Hess said on Wednesday that the improvement in adjusted after-tax results compared with the prior-year period primarily reflects higher realized selling prices, a contribution from the sale of two VLCC cargos and lower depletion, depreciation, and amortization expenses.

E&P net income was $308 million in the first quarter of 2021, compared with a net loss of $2,371 million in the first quarter of 2020.

On an adjusted basis, E&P’s first quarter 2020 net loss was $120 million. Hess’ average realized crude oil selling price, including the effect of hedging, was $50.02 per barrel in the first quarter of 2021, compared with $45.94 per barrel in the year-ago quarter.

Net production, excluding Libya, was 315,000 boepd in the first quarter of 2021, compared with 344,000 boepd in the first quarter of 2020 or 332,000 boepd pro forma for the sale of Hess’ interest in the Shenzi Field.

Net production for Libya was 18,000 boepd in the first quarter of 2021 compared with 5,000 boepd in the first quarter of 2020.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $9.81 per boe in the first quarter of 2021, compared with $9.70 per boe in the prior-year quarter.

The increase in the effective tax rate in the first quarter of 2021 compared with the year-ago period was primarily due to higher production volumes in Libya.

Hess Corporation CEO John Hess said: “Our company continues to successfully execute our strategy to grow our resource base, have a low cost of supply and sustain cash flow growth.

As our portfolio generates increasing free cash flow, we will first prioritize debt reduction and then the return of capital to our shareholders through dividend increases and opportunistic share repurchases”.

As for capex expenditures, E&P capital and exploratory expenditures were $309 million in the first quarter of 2021, down from $631 million in the prior-year quarter.

The decrease is primarily driven by a lower rig count in the Bakken and lower development drilling in the Gulf of Mexico and Malaysia.

Midstream capital expenditures were $23 million in the first quarter of 2021, down from $57 million in the prior-year quarter.

Hess’ 2021 guidance

Net production, excluding Libya, is now forecast to be 290,000 boepd to 295,000 boepd from previous guidance of approximately 310,000 boepd.

This reflects a 7,000 boepd reduction in expected NGL volumes received as consideration from the percentage of proceeds contracts for gas processing fees due to higher NGL prices which improve financial results, a reduction of 6,000 boepd from asset sales, and the balance primarily from adverse winter weather in North Dakota.

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