Hess Corporation, which has a 30 percent stake in the Stabroek Block, could hardly wait for the day Guyana becomes an oil producer in mid-2020. When that time comes, Guyana will completely change what Hess’ free cash flow and risk profile would look going forward since the production stage requires very low maintenance.
This perspective was highlighted earlier today when Hess Corporation participated in the Barclays CEO Energy-Power Conference held in New York.
There, Senior Vice President and Chief Financial Officer (CFO) for Hess Corporation, John Riley stated that indeed, Guyana is a “game changer” for the company. Riley said, “…The first, second, and third priority, which we continue to say, is to maintain that balance sheet, make sure that we have liquidity to fund Guyana and this growth and obviously the Bakken in the short term as well. So for now where we are …we’re going to use that cash, leave our leverage where it is and use that cash to fund these opportunities.”
Further to this, the CFO said that once the Liza Phase Two comes on stream, “We like to say we win in any commodity price environment at that point…”
In essence, Riley said that the company will be able to benefit from millions of dollars in profit fairly quickly when Phase Two kicks in. He said, too, that this is when Hess will start to prioritize the return of capital to shareholders. “We are taking dividends initially, some increases and then going with opportunistic share repurchases,” the Senior VP added.
While Liza Phase One will be producing 100,000 barrels of oil per day with the ability to operate at sustained peaks of 120,000 barrels per day, Liza Phase Two Phase will be producing approximately 190,000 to 220,000 barrels of oil per day.
