Hess Corp. has announced it plans to spend $2.9 billion in its 2019 capital and exploratory budget, with 75% of that money earmarked for high-return growth assets in the Bakken Shale and and Guyana, Kallanish Energy reports.
The company on Monday said its net production is predicted to be between 270,000 and 280,000 barrels of oil-equivalent per day (Boe/d) next year, excluding Libya.
That compares to about 245,000 Boe/d in 2018 pro forma for the sale of the company’s joint venture interests in the Utica Shale in eastern Ohio.
Focus on ‘high-return’ investments
Bakken net production in North Dakota and Montana is forecast to average between 135,000 and 145,000 Boe/d next year.
“Our capital and exploratory expenditure program is designed to deliver strong returns, production growth and significant future free cash flow,” said Ceo John Hess, in a statement.
“As we focus spending on our high-return investment opportunities, we will continue to reduce our unit costs to drive margin expansion and improve profitability,” he said.
The company said it intends to operate six rigs in the Bakken Shale in 2019, up from an average of 4.8 rigs in 2018. It plans to drill 170 new Bakken wells in 2019, up 42% from 2018, and bring online roughly 160 new wells in 2019.
Those plans will help Hess complete the transition to higher intensity plug and perf completions, which are expected to generate “a significant uplift” in net present value and initial production rates, while also increasing the estimated ultimate recovery of oil and natural gas, said chief operating officer Greg Hill.
Peak spending on Liza Phase 1
In Guyana, 2019 will be the peak spend year for the Liza Phase 1 development, which is on track to produce first oil by early 2020, Hill said.
The company is also planning to spend $570 million in offshore Guyana. That includes beginning Liza phase 2 development spending, completing the plan of development for Payara and advance front end engineering and design work for future Guyana development, he said.
It has also earmarked $290 million for the Gulf of Mexico and $150 million for the Gulf of Thailand. It will also spend $440 million in the Stabroek Block in offshore Guyana.
The New York-based company will review its long-term capital program at Investor Day today in Houston.
