Hess slashes 2016 drilling budget 27% on oil swoon

CHICAGO (Bloomberg) -- Hess Corp. plans to cut spending by about 27% next year after its oil and natural gas business lost more than $2 million a day during the third quarter.

Hess estimated its 2016 capital budget will fall to $2.9 billion to $3.1 billion from $4.1 billion this year, according to a statement from the New York-based company on Wednesday. Daily oil and gas output will decline to the equivalent of 330,000 bbl to 350,000 bbl next year, an 8.7% drop from the full-year 2015 target, based on the mid-range of those numbers.

The company posted a net loss of $279 million, or 98 cents a share, compared with profit of $1.01 billion, or $3.31, a year earlier, according to the statement. Excluding one-time items, the per-share loss was $1.03, beating the average estimated loss of $1.20 from analysts in a Bloomberg survey.

Hess’s exploration and production unit lost $188 million during the quarter as a 53% plunge in the price the company received for each barrel of crude more than offset a 19% jump in production. Even with hedges in place intended to help the company lock in prices for its output, its average selling prices for crude was $45.66/bbl, compared with $96.78 a year earlier.