U.S. oil and gas producer Hess Corp. reported a smaller-than-expected quarterly loss on July 29, as higher output and lower costs helped offset a plunge in oil prices due to the coronavirus crisis, sending its shares 3% higher.

Crude prices sank to historic lows in April as demand plummeted due to the COVID-19 pandemic and a price war between the world's top producers flooded the market with oil.

Hess said the average selling price of its crude oil, including hedging, fell 35.4% in the second quarter to $39.03 a barrel.

The slump in prices, however, was cushioned by a 22% jump in production to 334,000 barrels of oil equivalent per day (boe/d), as output rose at its Bakken field in North Dakota and Liza Field, offshore Guyana.

Hess did not curtail production during the downturn and instead charted three very large crude carriers (VLCC) to store its crude. The company plans to load an additional 2.3 million barrels of crude on the vessels in the third quarter.

It also raised its full-year production forecast, excluding Libya, by 10,000 boe/d to about 330,000 boe/d, as it increased the number of active wells in the Bakken and delayed the planned maintenance of its Tioga Gas Plant in North Dakota to 2021 from the third quarter.

The outlook raise is not a surprise given the delay in maintenance, but will likely be an outlier in the current environment, Credit Suisse analysts said.

Its quarterly total costs and expenses fell over 27% to $1.1 billion.

Net loss attributable was $320 million, or $1.05 per share, in the quarter ended June 30, compared with a loss of $6 million, or 2 cents per share, a year earlier.

Analysts on average expected a loss of $1.14 per share, according to Refinitiv IBES data.

Offshore