Hess Announces 2019 E&P Capital and Exploratory Budget

Wednesday 12 December 2018

Focus on High Return Investments to Deliver Capital Efficient Production Growth and Significant Future Free Cash Flow


Hess Corporation announced a 2019 E&P capital and exploratory budget of $2.9 billion. Of this, approximately 75 percent will be allocated to high return growth assets in the Bakken and Guyana.

Net production is forecast to average between 270,000 and 280,000 barrels of oil equivalent per day in 2019, excluding Libya, compared to approximately 245,000 barrels of oil equivalent per day in 2018 proforma for the sale of the company’s joint venture interests in the Utica shale play. Bakken net production is forecast to average between 135,000 and 145,000 barrels of oil equivalent per day in 2019.

The company will review its long term capital program at its Investor Day in Houston on December 12.

The $2.9 billion capital and exploratory budget is allocated as follows: $1,890 million (65 percent) for production, $570 million (20 percent) for offshore developments and $440 million (15 percent) for exploration and appraisal activities.

Production

- $1.425 billion to fund an increase to six rigs, from an average of 4.8 rigs in 2018, and the shift to higher intensity plug and perf wells in the Bakken. The company expects to drill approximately 170 new wells and to bring online approximately 160 new wells in 2019. Funds are also included for investment in non-operated wells.

- $290 million for production operations in the deepwater Gulf of Mexico, including continued development of the Stampede Field (Hess 25 percent and operator) and tieback opportunities at the Llano Field (Hess 50 percent) and Tubular Bells Field (Hess 57 percent and operator).

- $150 million for production activities in the Gulf of Thailand at North Malay Basin (Hess 50 percent and operator) and the Malaysia/Thailand Joint Development Area (Hess 50 percent).

Developments

- $260 million associated with the Liza Phase 1 development offshore Guyana (Hess 30 percent), where first production is expected by 2020.

- $310 million includes spend for Liza Phase 2 development, completing the plan of development for Payara, and front end engineering and design work for future development phases.

Exploration and Appraisal

- $440 million to drill exploration and appraisal wells on the Stabroek Block offshore Guyana (Hess 30 percent). Funds are also included for seismic acquisition and processing in Guyana, Suriname and the deepwater Gulf of Mexico, and for license acquisitions.