Bakken, deepwater Gulf of Mexico to boost Hess’s production

Hess Corp. plans to increase its production growth rate forecast by 6-10%/year during 2013-18, assuming $90-100/bbl Brent, anchored by production in the Bakken shale and deepwater Gulf of Mexico, the company said Nov. 10 during an investor presentation in Houston.

The Bakken represented 24% of the company’s production in 2013, and peak production is expected to reach 175,000 boe/d by 2020. That includes the addition of 1,000 wells to a total of more than 4,000, increasing its net estimated ultimate recovery (EUR) to more than 1.4 billion boe. Hess credits the success of this year’s downspacing pilots for the jump.

Nineteen rigs are expected to be deployed throughout the play during 2017-18, with 80% of the company’s new wells to be drilled in the basin’s core through 2020.

In Three-Forks, 60% of Hess’s acreage has been confirmed prospective, and some of the company’s “best wells” reside in the play, according to the presentation. A coring program has confirmed high oil saturation in the first and second benches.

Gerbert Schoonman, Hess vice-president in the Bakken, touted the company’s research projects in the region, where the company is looking at microseismic to pinpoint where depletion is occurring. A relationship with the University of Wyoming also enables the company to gain insight into the physics of flow in nano and micro pore systems.

Hess is pursuing the formation of a midstream master limited partnership that would support the company’s production growth in the Bakken (OGJ Online, July 30, 2014). The MLP would include the company’s natural gas processing plant in Tioga, ND, where a large-scale expansion, refurbishment, and optimization program was recently completed (OGJ Online, May 21, 2014).

The company says it hopes to leverage its efficiencies in the Bakken into the Utica shale, where the company’s acreage resides in the “wet gas sweet spot,” according to the presentation. Utica’s net peak production is forecast to reach 40,000 boe/d by 2020, with 500 wells and a net EUR of more than 300 million boe. The company plans a 2-3 rig program.

Hess in 2013 agreed to terms with PVR Partners LP for the latter to build, own, and operate a 45-mile natural gas trunkline and associated gathering pipelines and equipment serving Hess’s gas production in the Utica (OGJ Online, Sept. 4, 2013).

Additional production growth is forecast from Hess’s offshore assets, particularly in the deepwater Gulf of Mexico, where Stampede field was sanctioned in October for production launch in 2018 and production startup is under way at Tubular Bells.

Stampede is one of the gulf’s largest undeveloped fields, holding 300-350 million boe gross. Drilling on the 30,000-ft development is expected to begin late next year, with production capacity eventually reaching 80,000 b/d of oil (OGJ Online, Oct. 29, 2014). The company recently signed a contract with Diamond Offshore Drilling Inc. for deployment of two rigs.

Tubular Bells is expected to produce 25,000-30,000 boe/d during 2015-18. The company is currently drilling its fourth production well.

The gulf accounted for 21% of the company’s offshore production in 2013. During 2015-18, the company expects output of 80,000-90,000 boe/d.

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