Hess Secures A Top Spot In 2016 Newsweek Green Rankings

Global exploration & production (E&P) company, Hess Corporation (NYSE:HES) was awarded one of the highest rankings in 2016 Newsweek Green Rankings U.S. 500. This is one of the world’s most recognized assessments of corporate environmental performance. The rankings are among the 500 largest publicly traded companies in the U.S. by market capitalization.

For an upstream player, this is a commendable achievement given the fact that the ranking judges the sustainability and environmental impact of the company. It is based on research from Corporate Knights Capital, along with a “Green Revenue” score from HIP (Human Impact + Profit) Investor Inc. The current rankings are based on eight indicators that are used to assess and measure environmental performance.

Past Laurels

In April, Hess was ranked the first among the oil and gas companies on Corporate Responsibility magazine’s list of 100 Best Corporate Citizens for 2016. However, this was no exception for the company that has featured in this list in each of the past nine years, and was the No. 1 oil and gas company for the third consecutive year.

Company Details

Hess operates as a pure play E&P and is working toward becoming a more focused, higher growth and lower risk company. The company continues to concentrate on its E&P portfolio by divesting assets that do not fit its growth profile.

However, in the company’s sensitivity to gas and oil price volatility, drilling results, costs, geo-political risks and project delays are likely to limit its upside potential. The longer the price of oil stays low, the harder it will be for the oil sector companies to make money or restructure debt.

As a result, Hess reduced its 2016 capital expenditure target by 40% to $2.4 billion from $4 billion spent in 2015. In fact, capital spending during first-quarter 2016 was $544 million, down 56% year over year. Therefore, production levels are also expected to decrease and are estimated to range between 330 thousand barrels of oil equivalent per day (mboed) and 350 mboed. The drastic fall in oil prices has affected all oil majors and the impact can be witnessed in the reduced level of operations and cost cuts.

Zacks Rank & Key picks

Hess currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the broader energy sector are Braskem S.A. (NYSE:BAK) , McDermott International Inc. (NYSE:MDR) and North Atlantic Drilling Limited (NYSE:NADL) . All these stocks sport a Zacks Rank #1 (Strong Buy).

MCDERMOTT INTL (MDR): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

HESS CORP (HES): Free Stock Analysis Report

NORTH ATL DRILG (NADL): Free Stock Analysis Report

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