Here’s Why Hess Corp. (HES) Is a Buy: ConocoPhillips (COP), Marathon Oil Corporation (MRO)

As Ed Hirs, a lecturer in energy economics at the University of Houston explained to the Houston Chronicle, “Oil companies make money when they go explore, drill and prove up. Once you have production in place, the market will pay you more for the production than for the idea. They can sell the producing assets, give some of the proceeds to shareholders and plow the rest into exploration.”

Hess is moving on that lucrative track.

The Houston based company’s latest quarterly earnings of $1.66 per share handily beat estimates by a quarter. Forward guidance was upbeat, prompting Oppenheimer to reaffirm its “outperform” rating with an $85 price target. Deutsche Bank and Credit Suisse reiterated their “buy” ratings; Credit Suisse’s target is $83.

For all of 2013, Hess Corp. (NYSE:HES) has a capital and exploratory budget of $6.8 billion. The budget is “focused on attractive investment opportunities” says Chairman and CEO John Hess. The company’s mission is growth through fresh discoveries. For shareholders, Hess could prove to be a gusher.

As oil tycoon John Paul Getty said, “The formula for success is rise early, work hard and strike oil.” Here’s betting Hess Corp. (NYSE:HES) will succeed.

The article Here’s Why Hess Is a Buy originally appeared on Fool.com.

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