In a recently released 2019 budget, Hess Corporation (HES) has revealed that the company is planning to significantly increase spending compared to 2018's levels. Making itself an outlier compared to its exploration and production peers, Hess reiterated that its increased investment will pay big dividends down the road.
Hess also revealed that it plans to invest $2.9 billion in capex during 2019, nearly 40% higher than the $2.1 billion it spent in both 2017 and 2018. Further, it plans to allocate nearly three-quarters of $2.9 billion in assets it calls "high-return growth" in the U.S.'s Bakken formation and in Guyana to boost production in the near term. 20% would be invested in longer-term offshore development projects, and the remaining 15% on exploration and appraisal activities.
According to Hess, a major chunk of the production-focused spending will be on the Bakken Shale, where it plans to invest $1.425 billion so that it can operate an average of six drilling rigs. In addition, Hess plans to invest $290 million in its Gulf of Mexico operations to continue developing its Stampede Field, along with $150 million in Malaysia and Thailand.
All of Hess's development money will go toward the first two phases of Exxon's (XOM) Liza discovery offshore Guyana, where it plans to spend $260 million on phase one. This should enable them to start producing next year, and they have set aside $310 million toward phase two, which Exxon expects to sanction in 2019.
Finally, Hess plans to invest $440 million in continuing its exploration activities offshore Guyana with Exxon, as well as further exploring the deep-water Gulf of Mexico and offshore Suriname.
Hess believes this increased spending could enhance its position to grow production and cash flow at a fast pace over the next few years.
The Moving Average Convergence Divergence (MACD) for HES turned positive on March 14, 2024. Looking at past instances where HES's MACD turned positive, the stock continued to rise in of 48 cases over the following month. The odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on March 12, 2024. You may want to consider a long position or call options on HES as a result. In of 79 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
HES moved above its 50-day moving average on March 07, 2024 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HES advanced for three days, in of 331 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 292 cases where HES Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 67 cases where HES's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HES declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
HES broke above its upper Bollinger Band on March 15, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. HES’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.216) is normal, around the industry mean (4.706). P/E Ratio (33.996) is within average values for comparable stocks, (18.900). Projected Growth (PEG Ratio) (6.419) is also within normal values, averaging (4.471). Dividend Yield (0.012) settles around the average of (0.085) among similar stocks. P/S Ratio (4.466) is also within normal values, averaging (141.956).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a producer of crude oil
Industry OilGasProduction