Hess's stock rallies after plan to boost exploration budget and production
Hess Corp.'s stock surged 1.6% in premarket trade Thursday, after the oil and gas exploration company said its capital and exploratory budget and production will rise in 2017. The company said the E&P capital and exploratory budget for 2017 will rise 18% from a year ago to $2.25 billion, to fund additional rigs in the Bakken, development activities in Guyana and to restart drilling in the Valhall Field in Norway. Production is expected to increase 8% to 12% from the beginning of 2017 to the end of the year. Separately, Hess said it will record a $3.8 billion noncash charge in the fourth quarter to establish valuation allowances against net deferred tax assets. The company will also take a $700 million fourth-quarter charge to impair the carrying value of interests in Equus, and $140 million in charges for rig exit costs. Hess's stock has soared 56% over the past 12 months through Wednesday, while the SPDR Energy Select Sector ETF has run up 36% and the S&P 500 has gained 17%.
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