Hess stock holds gains as Chevron deal and strong 2023 cash flows reshape outlook

Hess Corporation (ISIN US42809H1077) reported strong 2023 financial results with adjusted net income of roughly $1.9 billion and shareholder distributions of about $1.2 billion, while its pending all?stock acquisition by Chevron frames the medium?term path for Hess stock, according to the company’s 2023 Form 10?K and year?end update for 31 December 2023 as cited by multiple financial data providers.

Revenue and profit trends in 2023

According to Hess Corporation’s 2023 annual filings and compiled market data for the year ended 31 December 2023, the company generated total revenues of about $11.3 billion, down from roughly $12.0 billion in 2022 as lower realized oil and gas prices offset higher production volumes.

The same 2023 filings and secondary financial portals show that Hess delivered net income attributable to the company of approximately $2.1 billion in 2023, compared with around $2.7 billion in 2022, reflecting a lower commodity price environment despite operational growth.

Based on those filings and consensus data services, Hess reported adjusted net income of roughly $1.9 billion for 2023 versus approximately $2.4 billion a year earlier, while also emphasizing that operating cash flow remained strong enough to support capital spending and shareholder returns.

Production growth and Guyana impact

Hess’s 2023 Form 10?K and related investor materials indicate that net production averaged about 387,000 barrels of oil equivalent per day in 2023, up from roughly 343,000 barrels of oil equivalent per day in 2022, an increase of around 13% year over year driven primarily by development in Guyana and the Bakken.

The same 2023 disclosures and widely cited analyst summaries note that net production from Guyana alone averaged approximately 112,000 barrels of oil equivalent per day in 2023, compared with about 77,000 barrels of oil equivalent per day in 2022, representing an increase of roughly 45% as new phases of the Stabroek Block came onstream.

In addition, Hess’s capital and exploratory expenditures totaled around $4.2 billion in 2023, up from roughly $3.7 billion in 2022, underscoring the company’s continued investment in high?return projects in Guyana, the Bakken shale, and other key assets as laid out in its year?end investor presentations and financial statements.

Shareholder returns and balance sheet

Hess’s 2023 year?end communications and standard financial data summaries state that the company returned approximately $1.2 billion to shareholders in 2023 through dividends and share repurchases, up from about $650 million in 2022, after it doubled its quarterly dividend earlier in the year.

The same materials show that Hess’s annual dividend rate increased from $1.00 per share in 2022 to $1.50 per share in 2023, a fifty percent step?up that was supported by strong cash generation from Guyana and the Bakken and positioned as a key element of the company’s cash?return framework.

In addition, Hess reported total debt of roughly $5.6 billion as of 31 December 2023 compared with about $6.1 billion at the end of 2022, with cash and cash equivalents of around $2.0 billion, resulting in net debt that remained manageable relative to its cash flow according to 2023 filings and widely used financial databases.

Chevron all?stock acquisition of Hess

According to public announcements by Hess Corporation and Chevron and widely reported transaction summaries, Chevron agreed in late October 2023 to acquire Hess in an all?stock deal that values Hess at approximately $53 billion, including debt, based on Chevron’s share price at the time of the announcement.

The transaction terms, as laid out in the deal announcement and subsequent regulatory filings, specify that Hess shareholders are to receive 1.025 Chevron shares for each Hess share, implying an equity value of about $53 per Hess share at an illustrative Chevron stock price of $51.70 at announcement and an overall enterprise value of roughly $60 billion when including assumed debt.

Deal documentation and multiple financial news reports note that the acquisition is designed to give Chevron a significant stake in the Guyana Stabroek Block, where Hess holds a thirty percent interest alongside its partners, as well as to add scale in the Bakken and Gulf of Mexico, while Hess shareholders are set to participate in the combined company’s future dividends and buybacks through their new Chevron shares.

Bakken oil and gas operations

Hess’s operational review and 2023 Form 10?K data indicate that the company’s Bakken shale operations in North Dakota and surrounding areas contributed net production of approximately 190,000 barrels of oil equivalent per day in 2023, compared with about 158,000 barrels of oil equivalent per day in 2022, an increase of roughly 20% year on year.

Within that Bakken total, Hess’s 2023 filings and supporting materials show that crude oil production averaged around 115,000 barrels per day in 2023 versus approximately 95,000 barrels per day in 2022, reflecting continued drilling and completion activity and the impact of prior infrastructure investments.

The same operational data and widely disseminated investor presentations report that Hess operated an average of four rigs in the Bakken during 2023, down from around five rigs in 2022, while still delivering higher production thanks to efficiency gains and improved well performance across its acreage.

Cash flow and capital allocation

According to Hess’s 2023 annual report and commonly cited cash flow analyses, the company generated net cash provided by operating activities of approximately $4.6 billion in 2023, compared with about $4.8 billion in 2022, despite the decline in commodity prices relative to the prior year.

After capital and exploratory expenditures of roughly $4.2 billion in 2023, Hess reported free cash flow of about $0.4 billion, which, together with its cash on hand and balance sheet flexibility, supported the previously mentioned $1.2 billion in shareholder distributions through dividends and buybacks as summarized in year?end presentations.

These cash flow figures, taken from 2023 filings and widely used market data services, also underpin the company’s capital allocation priorities, which emphasize sustained investment in Guyana and the Bakken while maintaining a competitive dividend and opportunistic share repurchases ahead of the planned integration with Chevron.

Representative product and assets

One of Hess’s most important assets is its participation in the Stabroek Block offshore Guyana, where sanctioned developments such as the Liza and Payara projects are expected to drive long?term production growth and cash flow for the combined company once the Chevron transaction closes.

Hess stock and market context

Hess stock is listed on the New York Stock Exchange under the ticker HES, and market data providers report that the company’s market capitalization has recently been in the range of roughly $45 billion to $50 billion, reflecting both the underlying oil and gas portfolio and the value of the pending all?stock acquisition by Chevron.