Despite reporting a 21% decline in fourth-quarter profits, oil and natural gas company Hess ( HES) saw its shares close higher Wednesday.

In total, earnings fell to $359 million, or $1.13 a share, from $452 million, or $1.44 a share, generated during the same quarter the previous year. Hess cited lower gasoline and marketing margins as the cause for the decrease.

On average, analysts estimated $1.11 in fourth-quarter earnings, according to Thomson First Call. Revenue for the quarter rose to $7.21 billion from $7.15 billion in the prior-year period.

Meanwhile, the company reported that its oil production rose to 366,000 barrels a day for the quarter, up from 316,000 barrels a day produced the year prior.

Earnings in the energy company's exploration and production division increased 17% for the quarter to $350 million, while earnings from Hess' marketing and refining segment sank 71% to $67 million.

On an annual basis, profits grew to $1.87 billion, or $6.07 a share, from 2005's $1.29 billion, or $3.98 a share. The company also reported $28.72 billion in full-year revenue, compared with $23.26 billion recorded in 2005.

For 2007, Hess said it expects production of 370,000 to 380,000 barrels a day. Also, it said it estimates capital spending of about $4 billion this year, out of which $3.9 billion is expected to be spent on exploration and production.

Hess rose 2.3% to $53.99.

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