Oil and natural gas producer Hess Corp posted a lower-than-expected profit on Wednesday, as a steep fall in global crude prices eroded results.
The weak results from Hess, one of the first major U.S. oil companies to report quarterly earnings, could portend a wave of negative earnings reports across the industry, especially with oil prices down more than 60 percent since last June.
Chevron Corp and Exxon Mobil Corp are set to report within the week.
While production at many Hess wells rose, the jump was largely attributed to technological advancements, not new drilling.
In response, oil producers are trimming their expenditure outlays and cutting costs this year. Hess said on Monday it would cut its 2015 capital budget by 16 percent to $4.7 billion.
“We are confident in our ability to manage the current pricing environment and remain very optimistic about the company’s long-term growth potential,” Chief Executive John Hess said in a statement.
Hess’s oil and gas production jumped 18 percent to 362,000 barrels of oil equivalent per day (boepd) in the fourth quarter ended Dec. 31.
The company, which also has operations in the U.S. Gulf of Mexico, Denmark and Norway, said production from North Dakota’s Bakken shale field accounted for about 28 percent of total output.
However, the rise in production volumes was offset by a steep fall in prices. Hess said its average worldwide crude oil selling price, including the effect of hedging, fell 24 percent to $74.97 per barrel in the quarter.
Net loss attributable to Hess was $8 million, or 3 cents per share, compared with net income of $1.93 billion, or $5.76 per share, a year earlier.
Adjusted profit was 18 cents per share, below the average analyst estimate of 20 cents per share, according to Thomson Reuters I/B/E/S.
Hess shares, down about 2 percent in premarket trading, have lost 28 percent of their value in the past six months. They closed at $71.61 on Tuesday on the New York Stock Exchange.
U.S. crude oil futures, meanwhile, fell 2 percent to $45.28 per barrel on Wednesday.