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How Hess Stock Performed Last Year

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Jul. 22 2016, Updated 12:11 p.m. ET

Performance of Hess stock

Hess (HES) stock was mostly in a falling trend in the second half of 2015. However, since the start of 2016, HES has been mostly on an uptrend, mirroring the rally in crude oil prices (USO).

Year-over-year, Hess stock has fallen ~10%. Crude oil prices have fallen ~11% in the same period. The broader energy ETF—the Energy Select Sector SPDR ETF (XLE)—has fallen by 5.5% in the same period.

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Hess’s key management objectives

One of Hess’s (HES) key management objectives is to preserve growth options. Hess sees growth opportunities in the Bakken and Utica plays. It also has several growth projects offshore, including its North Malay Basin and Stampede projects. The company also sees growth opportunities in its international operations in Guyana and the Gulf of Mexico.

Another key strategy deployed by Hess this year is a reduction in rig count. In its 1Q16 earnings conference, Hess noted that its Bakken rig count would be reduced from three rigs to two rigs in 3Q16 and that it would maintain rigs at that level until crude oil prices were ~$60 per barrel.

Hess noted that as prices recover, it will accelerate drilling activity in the Bakken Shale.

Other companies focusing on lower rigs this year are Anadarko Petroleum (APC) and Apache (APA). These companies make up a combined 2.7% of the iShares Global Energy ETF (IXC).

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