Profits Climb at Hess

Hess (HES Quote) said Wednesday that its third-quarter earnings jumped 33% year over year as profits from its exploration and production operations doubled.

The company earned $395 million, or $1.23 a share, compared with $296 million, or 94 cents a share, in the third quarter of 2006. Hess received its biggest boost from E&P, where it earned $414 million, up from $206 million a year ago.

Hess said in a press release that the improvement in E&P was partly because of a 1.5% increase in oil and gas production levels. It produced 357,000 barrels a day last quarter, compared with 352,000 barrels a day a year ago.

Also helping was a higher average realized price per barrel of oil, which rose to $65.26 from $58.81 during the same period last year.

Shares of Hess gained 4.2% to $71.66.

Refining and marketing was a weak spot for Hess, as it has been for a number of other companies in the sector. At Hess, earnings from the business fell to $46 million in the third quarter from $152 million last year. The company blamed lower refined product margins for the decline in profits.

Previously, companies including BP (BP Quote) and ConocoPhillips (COP Quote) have reported that refining margins slowed in the third quarter of 2007.

The company generated $7.45 billion in revenue in the quarter, compared with $7.42 billion in the second quarter and $7.04 billion last year.