Oil prices hit multi-year records during the quarter as the conflict in Ukraine led to sanctions against Russia, one of the biggest exporters of crude, creating a global supply crunch. Brent oil futures were trading over $104 per barrel on Wednesday and have risen about 36% this year.
Hess said its average realized crude oil selling price rose to $86.75 per barrel, from $50.02 per barrel last year.
But even with higher prices, Hess warned that some production had come in lower than anticipated due to field declines and unplanned downtime, as well as severe weather. The company also said it was facing rising costs for materials.
"Like our competitors, were also seeing upward cost pressure across both onshore and offshore businesses," Chief Executive John Hess told analysts in a webcast.
Excluding Libya, the company said net production fell about 12% to 276,000 barrels of oil equivalent (BOE) per day in the quarter largely due to output declines and unplanned downtime in the Gulf of Mexico.
Hess also said its full-year net production would come in at the lower end of its 325,000 BOE per day BOE to 330,000 BOE per day guidance due to weather-related issues in North Dakota, where severe winter storms have hampered production.
Shares were up more than 2% to $104 each in morning trading.
The company warned that inflation may require it to add $80 million to $100 million to its capital program during the year. It said drilling and completion costs in the Bakken have increased about 7% from last year to $6.2 million per well.
Hess said net income attributable to the company jumped 65% to $417 million, or $1.34 per share, in the three months ended March 31, from last year.
Excluding items, Hess earned $1.30 per share, above average analysts' estimate of $1.13 per share, according to Refinitiv IBES.
Hess, along with partners Exxon Mobil Corp and CNOOC Ltd, said on Tuesday it has found oil in three new wells off the coast of the South American country of Guyana, raising recoverable oil and gas potential from its discoveries to nearly 11 billion barrels.
On Wednesday, Hess said it anticipated seven 1-million barrel liftings from Guyana in the current quarter, and eight 1-million barrel liftings in both the third and fourth quarters of this year.
(Reporting by Liz Hampton, in Denver; Sabrina Valle, in Houston; and Ruhi Soni, in Bengaluru; Editing by Amy Caren Daniel, Maju Samuel and David Gregorio)
By Liz Hampton, Sabrina Valle and Ruhi Soni
