Hess Corporation which holds a 30 percent stake in the Stabroek Block announced moments ago that its 2020 Exploration and Production capital and exploratory budget stands at US$3.0 billion. More than 80 percent of that budget would be allocated to high return investments in Guyana and the Bakken, USA. In fact, Hess will expend over US$1.3B for exploration and development projects in the Stabroek and Kaieteur Blocks.
Chief Executive Officer, John Hess was keen to note this morning that Guyana and the Bakken are two of the highest return investment opportunities in the industry which will also become significant, long term cash generators for the company.
Also commenting on Hess’ 2020 budget was its Chief Operating Officer Greg Hill. He said, “In the Bakken, we plan to maintain a six rig programme through the year, which is expected to result in our net production growing to approximately 200,000 barrels of oil equivalent per day by the end of 2020.”
Turning his attention to offshore Guyana, Hill said the company’s focus in 2020 will be on the Liza Phase Two development and on front end engineering design work to develop the Payara Field. The Chief Operating Officer also noted that the company will continue to invest in an active exploration and appraisal programme in Guyana on both the Stabroek and Kaieteur Blocks and in the deepwater Gulf of Mexico.
The US$3.0 billion budget is allocated as follows: US$1.69 billion (56%) for production, US$860 million (29%) for offshore Guyana developments and US$450 million (15%) for exploration and appraisal activities. (See below for more details).
Production
US$1.375 billion to fund a six rig program in the Bakken. The company expects to drill approximately 170 new wells and to bring online approximately 175 new wells in 2020. Funds are also included for investment in non-operated wells.
US$135 million for production operations in the deepwater Gulf of Mexico, including development of the Esox-1 tieback (Hess 57.14% and operator).
US$170 million for production activities at North Malay Basin (Hess 50% and operator) and the Malaysia/Thailand Joint Development Area (Hess 50%) in the Gulf of Thailand.
Developments
US$100 million associated with the Liza Phase 1 development offshore Guyana (Hess 30%), where first production was achieved in December 2019.
US$400 million for the Liza Phase 2 development, where first production is expected by mid 2022.
US$360 million to progress development plans for the Payara Field, where production is expected as early as 2023, and for front end engineering and design work for future developments.
Exploration and Appraisal
US$450 million to drill exploration and appraisal wells on the Stabroek and Kaieteur Blocks offshore Guyana (Hess 30% and 15%, respectively) and two exploration wells in the Gulf of Mexico. Funds are also included for seismic acquisition and processing in Guyana, Suriname and the deepwater Gulf of Mexico, and for licensed acquisitions.
