Hess reports on 2014 capital and exploratory budget for operations

Offshore staff

NEW YORK CITY – For 2014, Hess Corp. (NYSE:HES) has an exploration and production capital and exploratory budget of $5.8 billion. Of this, $2.85 billion (49%) is dedicated to unconventional shale resources, with $1.475 billion (25%) for production, $925 million (16%) for developments, and $550 million (10%) for exploration.

The company’s 2014 budget includes development of the Tubular Bells field in the deepwater Gulf of Mexico and the North Malay basin project in Malaysia, as well as ongoing drilling at the Valhall field in Norway, the South Arne field in Denmark, block G in Equatorial Guinea, block A-18 in the Joint Development Area in the Gulf of Thailand, and the Shenzi field in the deepwater Gulf of Mexico. Its exploration program also includes wells in Ghana and Kurdistan.

Production – $1.475 billion:

$350 million to drill five production wells at the Okume complex and progress facility work at the Sendje Ceiba floating production, storage and offloading vessel (FPSO) at block G (Hess, operator – 85%) in Equatorial Guinea
$300 million to drill three production wells and install gas lift on four flank wells at the Valhall field (Hess, 64%) in Norway
$300 million to drill 10 production wells, install two new wellhead platforms, and progress the Booster Compression Project at block A-18 (Hess, 50%) in the Joint Development Area in the Gulf of Thailand
$200 million to drill three production wells and one water injection well at the South Arne field (Hess, operator – 62%) in Denmark
$150 million to drill two production wells and one water injection well at the Shenzi field (Hess, 28%) in the deepwater Gulf of Mexico.

Development – $925 million:

$400 million for the development and startup of the Tubular Bells field in the deepwater Gulf of Mexico (Hess, operator – 57%). Hess will install the hull, topsides, and subsea equipment; complete two production wells; and drill a fourth production well
$400 million to progress the full field development of the North Malay basin project (Hess, operator – 50%) in Malaysia.

Exploration – $550 million:

Hess plans to drill three appraisal wells and perform one drill stem test on the Deepwater Tano/Cape Three Points block (Hess, operator – 90%) in Ghana
Complete drilling two wells at the Dinarta and Shakrok blocks (Hess, operator – 80%) in Iraqi Kurdistan
Conduct 3D seismic and technical studies in the deepwater Gulf of Mexico in preparation for resuming drilling in 2015.

John Hess, CEO, commented, “We are committed to ensuring that our capital and exploratory budget enables our goal of achieving 5-8% compound average production growth through 2017 while generating the highest possible risk-adjusted returns.”

01/24/2014