Hess Corporation (NYSE: HES) announced today a 2016 E&P capital and
exploratory budget of $2.4 billion, a 40 percent reduction from its 2015
actual spend of $4.0 billion and approximately 20 percent below
preliminary 2016 guidance of $2.9-$3.1 billion provided in October.
The $2.4 billion budget is allocated as follows: $470 million (20
percent) for unconventional shale resources, $610 million (25 percent)
for production, $820 million (34 percent) for developments and $500
million (21 percent) for exploration and appraisal activities.
Net production is forecast to average between 330,000 and 350,000
barrels of oil equivalent per day in 2016. Bakken net production is
forecast to average between 95,000 and 105,000 barrels of oil equivalent
per day in 2016. These production forecasts are unchanged from
preliminary guidance provided in October.
“In 2016 Hess will remain focused on preserving the strength of our
balance sheet, our top quartile operating capabilities and our long term
growth options,” CEO John Hess said. “While we are well positioned to
navigate the current low oil price environment with one of the strongest
balance sheets and liquidity positions among our E&P peers, we are also
well positioned to benefit from a recovery in prices, with a high
quality portfolio that is leveraged to oil and offers attractive
investment opportunities which will create long term value for our
shareholders.”
Greg Hill, President and COO, stated: “We take a long term view to
managing our business and we will continue to invest in our growth
projects and prospects, including exploration and appraisal activities.
However, in response to the current low oil price environment, we have
significantly decreased our 2016 capital and exploratory expenditures
and we plan to reduce activity at all of our producing assets. Moreover,
we will continue to pursue further cost reductions and efficiency gains
across our portfolio.”
Unconventionals - $470 million, including:
-
$425 million to operate two rigs and bring online approximately 80 new
wells in the Bakken Shale in North Dakota
-
$45 million to drill five wells and bring 14 new wells online in the
Utica Shale in Ohio during the first quarter of 2016, after which the
rig will be released
Production - $610 million, including:
-
$375 million for production activities in the deepwater Gulf of
Mexico, including the drilling and completion of a production well and
completion of a water injection well at the Tubular Bells Field (Hess
57.1 percent and operator), a production well at the Conger Field
(Hess 37.5 percent and operator) and a water injection well at the
Shenzi Field (Hess 28 percent, BHP operator)
-
$140 million to complete the current stage of the Phase 3 drilling
campaign at the South Arne Field (Hess 61.5 percent and operator) in
Denmark by the end of the first quarter and for operations at the
Valhall Field (Hess 64 percent, BP operator) in Norway
-
$50 million to complete the Booster Compression project and processing
of new broadband seismic data in the Joint Development Area in the
Gulf of Thailand (Hess 50 percent, Carigali Hess operator)
Developments - $820 million, including:
-
$375 million to progress full field development of the North Malay
Basin project (Hess 50 percent and operator) in Malaysia
-
$325 million to integrate hull and topsides, install subsea
umbilicals, risers and flowlines and commence drilling at the Stampede
Field (Hess 25 percent and operator) in the deepwater Gulf of Mexico
-
$70 million for pre-development activities at the Liza Field (Hess 30
percent, Esso Exploration and Production Guyana Limited operator) in
Guyana
Exploration and Appraisal - $500 million, including:
-
$250 million to drill up to four wells on the Stabroek Block, offshore
Guyana that include evaluating the significant Liza discovery, a drill
stem test, and additional exploration activities
-
$175 million for drilling in the deepwater Gulf of Mexico including an
appraisal well to delineate the Sicily discovery (Hess 25 percent,
Chevron operator) and an exploration well at the Melmar prospect (Hess
35 percent, ConocoPhillips operator), a large Paleogene four way
structure in the Perdido Fold Belt, and other exploration activities
2016 Estimated Capital and Exploratory Expenditures
|
($ Millions)
|
|
|
|
|
|
|
By Segment:
|
|
|
|
By Region:
|
|
|
|
|
|
|
|
Exploration and Production
|
|
|
|
Exploration and Production
|
|
|
|
|
|
|
|
Unconventionals
|
$
|
470
|
|
|
United States
|
$
|
1,400
|
Production
|
|
610
|
|
|
Europe
|
|
140
|
Developments
|
|
820
|
|
|
Africa
|
|
40
|
Exploration and Appraisal
|
|
500
|
|
|
Asia and Other
|
|
820
|
|
|
|
|
|
|
Total
|
$
|
2,400
|
|
|
|
$
|
2,400
|
Note: This budget excludes expenditures associated with Hess’
50 percent interest in Hess Infrastructure Partners, which has a 2016
capital budget of $340 million and will be funded at the joint venture
level.
Hess Corporation is a leading global independent energy company engaged
in the exploration and production of crude oil and natural gas. More
information on Hess Corporation is available at http://www.hess.com.
Cautionary Statements
This news release contains projections and other forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
projections and statements reflect the company’s current views with
respect to future events and financial performance. No assurances
can be given, however, that these events will occur or that these
projections will be achieved, and actual results could differ materially
from those projected as a result of certain risk factors. A
discussion of these risk factors is included in the company’s periodic
reports filed with the Securities and Exchange Commission.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160126005794/en/
Copyright Business Wire 2016
Source: Business Wire
(January 26, 2016 - 7:30 AM EST)
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