NEW YORK – Hess Corp. has reported an E&P capital and exploratory budget of $2.25 billion for 2017, compared to its 2016 actual spend of $1.9 billion.
The $2.25-billion budget is allocated as follows: $700 million (31%) for unconventional shale resources, $375 million (17%) for production, $825 million (37%) for developments, and $350 million (15%) for exploration and appraisal activities.
The operator forecasts net 2017 production to average between 300,000 and 310,000 boe/d, excluding Libya. Production is expected to increase 8-12% as a result of additional rigs in the Bakken, restart of drilling at Valhall, and start-up of North Malay Basin in 3Q.
The company has allocated $375 million primarily for production activities in the deepwater Gulf of Mexico, including the drilling and completion of a production well at the Penn State field (Hess 50% and operator) and for operations at the Aker BP-operated Valhall field offshore Norway. Here drilling is expected to restart in late 1Q 2017. Hess holds 64%.
For developments, Hess has allocated $425 million to drill two wells and complete three wells, install the tension leg platform, and progress development of the Stampede field in the deepwater Gulf of Mexico to achieve first oil in 2018. Hess is the operator and holds 25%.
It has assigned $275 million to complete initial full field development of North Malay Basin offshore Malaysia to achieve first production in 3Q 2017. It is the operator and holds 50%.
At the Esso Exploration and Production Guyana Ltd.-operated Liza field offshore Guyana, Hess has allocated $125 million for development activities. The company holds 30%.
As for exploration and appraisal, the operator has assigned$350 million to drill wells on the Stabroek block offshore Guyana that include appraising the Liza field, the recent Payara discovery, and new exploration prospects. Additional funds are included for seismic acquisition and processing and for license acquisitions.
In 4Q 2016, the company deferred further development of the Equus natural gas fields offshore the North West Shelf of Australia.
CEO John Hess said: “Our 2017 budget reflects our balanced approach to investing in short cycle and long cycle growth options while maintaining our financial flexibility.”