Hess has announced a 2021 Exploration & Production capital and exploratory budget of $1.9 billion, of which more than 80% will be allocated to Guyana and the Bakken.
Net production is forecast to average approximately 310,000 barrels of oil equivalent per day in 2021, excluding Libya. Bakken net production is forecast to average approximately 170,000 barrels of oil equivalent per day in 2021. This forecast includes the impact of operating a two rig program beginning in the first quarter and a planned 45-day turnaround and expansion tie-in at the Tioga Gas Plant in the third quarter, which is expected to reduce full year 2021 Bakken net production by approximately 7,500 barrels of oil equivalent per day.
“Our capital program reflects our disciplined approach in the current oil price environment to preserve cash, core capabilities and the long term value of our assets,” CEO John Hess said. “The majority of our 2021 budget is allocated to Guyana, where our three sanctioned oil developments have a Brent breakeven oil price of between $25 and $35 per barrel, and to the Bakken, where we have a large inventory of future drilling locations that generate attractive financial returns at current prices. By investing only in high return, low cost opportunities, we have built a differentiated portfolio of assets that we believe will provide industry leading cash flow growth over the course of the decade.”
Chief Operating Officer Greg Hill said: “In the Bakken, we plan to add a second rig during the first quarter, which will allow us to sustain production and cash flow generation from this important asset. Offshore Guyana, our focus in 2021 will be on advancing our next two sanctioned developments to first oil – Liza Phase 2 in early 2022 and Payara in 2024 – and on front end engineering and design work for future development phases on the Stabroek Block. We also will continue to invest in an active exploration and appraisal program, with 12-15 wells planned on the Stabroek Block.”
The $1.9 billion budget is allocated as follows: $670 million (35%) for production, $780 million (41%) for offshore Guyana developments and $450 million (24%) for exploration and appraisal activities.
- $450 million to fund a two rig program in the Bakken. The company expects to drill approximately 55 gross operated wells and to bring online approximately 45 wells in 2021. Funds are also included for investment in nonoperated wells.
- $165 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.
- $25 million associated with the Liza Phase 1 development on the Stabroek Block in Guyana (Hess 30%), where production reached nameplate capacity of 120,000 gross barrels of oil per day in December 2020.
- $450 million for the Liza Phase 2 development with a capacity of up to 220,000 gross barrels of oil per day, with first production expected in early 2022.
- $235 million for the Payara development with a capacity of up to 220,000 gross barrels of oil per day, with first production expected in 2024.
- $70 million primarily for front end engineering and design work for future development phases on the Stabroek Block.
Exploration and Appraisal
- $450 million to drill 12-15 exploration and appraisal wells on the Stabroek Block in Guyana (Hess 30%). Funds are also included for well planning on Block 42 in Suriname (Hess 33.3%), seismic acquisition and processing in Guyana and the Deepwater Gulf of Mexico and for license acquisitions.