Hess Corporation (HES): BCG Matrix [Dec-2025 Updated]

You're looking at Hess Corporation's portfolio right after Chevron closed the deal in July 2025, and honestly, the picture is starkly divided between massive potential and steady income. We've got the world-class Star in Guyana, sitting on 11.6 billion barrels of recoverable resource, which required about $4.5 billion in E&P spending this year, balanced against the reliable Bakken Cash Cow still pumping out 195,000 boepd in Q1 2025. Then there are the non-core Dogs in Southeast Asia and the high-risk, high-reward Question Marks in the Gulf of Mexico; mapping these units onto the BCG Matrix shows exactly where Chevron needs to focus its new capital. Dive in to see the clear-eyed breakdown of which assets are set to drive future value and which ones are just taking up space.

Background of Hess Corporation (HES)

Hess Corporation (HES) is a New York City-headquartered, global independent energy company focused on the exploration and production of crude oil and natural gas. You should know that Hess was formed way back in 1968 through the merger of Hess Oil and Chemical and Amerada Petroleum. As of late 2025, Hess Corporation operates as a subsidiary of Chevron Corporation, following the closing of the acquisition in July 2025.

The company's primary operations are spread across a few key areas. You'll find significant assets in the Bakken Shale in the onshore United States, offshore Guyana (specifically the Stabroek Block, where Hess holds a 30% interest), the Gulf of Mexico, and Southeast Asia. At the end of 2024, Hess reported net proved reserves totaling 1.44 billion barrels of oil equivalent.

Looking at the most recent figures from the first quarter of 2025, Hess reported a net income attributable to shareholders of $430 million, which translated to $1.39 per diluted share. This was a drop from the $972 million (or $3.16 per share) seen in the first quarter of 2024, largely due to lower realized oil selling prices, which averaged $71.22 per barrel in Q1 2025. Total oil and gas net production held steady at 476,000 barrels of oil equivalent per day (boepd) for both Q1 2025 and Q1 2024.

The strategic focus remains heavily on development, especially in Guyana. The fourth major development on the Stabroek Block, Yellowtail, was on track to start up in the third quarter of 2025, with an initial gross production capacity near 250,000 barrels of oil per day. In Q1 2025, E&P capital and exploratory expenditures hit $1,085 million, and the full-year 2025 expectation was set around $4.5 billion.

Operationally, the Bakken region contributed 195,000 boepd in Q1 2025, showing growth from the prior year, while Guyana net production was 183,000 bopd. The Midstream segment, which Hess Midstream Operations LP manages, posted a net income of $70 million in the first quarter of 2025. As of March 31, 2025, Hess Corporation, excluding the Midstream segment, maintained a debt to capitalization ratio of 27.8%, with cash and cash equivalents at $1.3 billion against total debt and finance lease obligations of $5.3 billion.

Hess Corporation (HES) - BCG Matrix: Stars

You're looking at the engine driving Hess Corporation's future growth, and right now, that engine is unequivocally the Stabroek Block in Guyana. This asset fits the Star quadrant perfectly: it operates in a high-growth market-deepwater oil development-and Hess holds a significant, leading position within it.

Hess Corporation maintains a 30% interest in the Stabroek Block, which is a world-class asset. The gross discovered recoverable resource estimate for the entire block has been stated as 11.6 billion barrels of oil equivalent as of late 2024, a figure Hess's CEO suggested was higher than the operator's own conservative estimate. This massive resource base supports the high-growth market share definition of a Star.

The immediate cash flow and production growth are being fueled by the next wave of developments. The Yellowtail development, the fourth major project on the block, is on track for startup in the third quarter of 2025. This project alone is set to add gross production capacity of approximately 250,000 barrels of oil per day (bopd). To be fair, while Yellowtail is starting up, Hess's total E&P capital and exploratory expenditures for the full year 2025 are expected to be approximately $4.5 billion, showing the significant cash burn required to keep these Stars shining.

The high market growth potential isn't just about Yellowtail; it's about the queue of sanctioned projects that extend this growth well into the 2030s. The Uaru and Whiptail projects are already sanctioned and are key to sustaining this high-growth trajectory. If Hess keeps its market share here, these assets are definitely set to mature into Cash Cows later on.

Here's a quick look at the key production drivers Hess is investing heavily in:

• Stabroek Block Hess interest: 30%
• Total discovered resource estimate: 11.6 billion barrels of oil equivalent
• Yellowtail start-up: Q3 2025
• Yellowtail gross capacity: Approximately 250,000 bopd
• Uaru start-up target: 2026
• Whiptail start-up target: 2027

The capital intensity is clear when you look at the planned capacity additions from these Stars:

The strategy here is classic: invest heavily in the Stars to secure future market dominance. Hess's full year 2025 E&P capital budget of approximately $4.5 billion is largely dedicated to ensuring these projects come online successfully, which is the necessary support for a Star to eventually transition into a Cash Cow when the high-growth phase moderates.

Finance: review the Q2 2025 capital spend against the $4.5 billion full-year forecast by next Tuesday.

Hess Corporation (HES) - BCG Matrix: Cash Cows

The Bakken Shale in North Dakota represents a leading and mature U.S. onshore position for Hess Corporation. This asset base is characterized by high market share within a mature segment, providing a foundation of stable cash flow.

Hess Corporation's Q1 2025 net production from the Bakken was reported at 195,000 boepd (barrels of oil equivalent per day). This figure reflects an increase from the 190,000 boepd seen in the prior-year quarter, despite winter weather impacts in Q1 2025.

The expectation for the immediate future suggests continued, albeit modest, output stability. Hess Corporation forecasted Q2 2025 Bakken net production to be in the range of 210,000 boepd to 215,000 boepd. During Q1 2025, the Corporation maintained four drilling rigs in the region, drilling 28 wells, completing 36 wells, and bringing 32 new wells online.

The cash flow generated here is critical; it is the source of capital that Hess Corporation deploys to fund its higher-growth international assets, such as those in Guyana. The cash flow support from this mature asset is evident in the associated midstream segment's projections, which are designed to support and maximize the basin's output.

Here are key operational and financial metrics related to the Bakken asset and its supporting infrastructure for 2025:

Investments into supporting infrastructure, such as those managed by Hess Midstream LP (HESM), are focused on maintaining efficiency and increasing cash flow capture from the existing production base. HESM's 2025 guidance included capital expenditures of approximately $300 million to support this infrastructure.

The cash generation capability of the midstream support system is quantified by its own outlook:

• Hess Midstream LP expects Adjusted Free Cash Flow of between $735 million and $785 million in 2025 at the midpoint of guidance after funding distributions.
• Hess Midstream LP expects to generate $1,235 million to $1,285 million of Adjusted EBITDA in 2025.
• Crude oil gathering volumes are anticipated to average 120,000 to 130,000 MBbl per day in 2025.

The Bakken asset's role is to generate the necessary surplus cash to cover corporate needs and fund higher-risk, higher-reward ventures. The cash operating cost of $12.27 per boe in Q1 2025, while higher than the prior year's $10.79 per boe, still reflects a mature asset capable of producing significant netbacks when compared to development-stage assets.

Hess Corporation (HES) - BCG Matrix: Dogs

You're looking at the assets that, while still producing, don't align with the high-growth, high-return focus Chevron is now driving post-merger. These are the classic Dogs in the portfolio, units with low market share in mature segments.

The Southeast Asia assets, specifically the North Malay Basin and the Malaysia-Thailand Joint Development Area (MTJDA) interests, fit this profile. These are smaller, mature portfolios compared to the massive growth engines in Guyana or the established Bakken position. The trend here is clear: these assets were divested shortly after the Chevron acquisition closed in July 2025, confirming their non-core status.

Here's a look at the production profile for these assets as of early 2025, which illustrates the lower scale:

The MTJDA Block A-18 project, which Hess held a 50% interest in, was producing approximately 600 million standard cubic feet of natural gas per day (MMSCFD), split equally between Thailand and Malaysia, as of the sale date. This asset was sold for a base consideration of $450 million on July 25, 2025.

The characteristics supporting the Dog classification include:

• Mature Portfolio: North Malay Basin fields are characterized as relatively small, typically under 100 bcf in size.
• High Operating Costs/Impurities: Some fields are noted for a high CO2 content.
• Divestiture Action: The sale of the MTJDA interest for $450 million confirms the assets were non-core following the July 2025 merger.

The trend shows a decline in production for this segment, moving from 65,000 boepd in Q1 2024 to 57,000 boepd in Q1 2025. This is cash that the combined entity is choosing to redeploy elsewhere, which is the textbook action for a Dog. Finance: draft the final cash impact statement for the $450 million MTJDA sale by next Tuesday.

Hess Corporation (HES) - BCG Matrix: Question Marks

These business units operate in markets showing growth potential but currently hold a relatively low market share within Hess Corporation's overall portfolio. They require significant cash investment to build that share, which is characteristic of a Question Mark quadrant position.

The Gulf of Mexico (GoM) operations fit this profile. While smaller in scale compared to the major Guyana or Bakken assets, recent activity shows upward momentum, suggesting a high-growth market segment Hess Corporation is trying to capture.

• Gulf of Mexico (GoM) net production for Q1 2025 reached 41,000 boepd.
• This represented a significant increase from the prior-year quarter, driven by new tiebacks like the Pickerel-1 oil discovery, which achieved first production in late June 2024 as a tieback to the Tubular Bells production facilities.

The high-risk, high-reward nature of pursuing growth in new areas is clearly illustrated by exploration efforts. The Vancouver exploration well, spud in June 2024, completed drilling in late December 2024, but it did not encounter commercial quantities of hydrocarbons.

This exploration failure resulted in a direct financial hit recorded in the preceding period; Q4 2024 results included $92 million in exploration expense for well costs incurred through December 31, 2024. This is the cash consumption aspect of a Question Mark that does not immediately convert to a Star.

The Midstream segment, while providing stable, fee-based revenue, is capital-intensive, consuming cash needed for expansion to support future growth, which aligns with the investment needs of a Question Mark needing to scale up.

The strategy here is clear: heavy investment is required to rapidly increase market share in the GoM, or these smaller, high-potential assets risk becoming Dogs if growth stalls. The Midstream segment requires continued capital deployment of amounts like the $50 million seen in Q1 2025 to maintain its infrastructure base and support the production growth from the E&P side.