Hess’ Bakken Production Nearing Peak of 200,000 boe/d

Hess Corp.’s net combined oil, gas and NGL production from onshore Bakken in this year’s third quarter is close to reaching its peak.

Hess’ Bakken production is expected to average 200,000 boe/d by 2025 then flatline at that level for nearly a decade, company officials have said repeatedly during recent quarterly conference calls with analysts. Hess scrapped its third-quarter earnings call following after Chevron Corp. announced on Oct. 23 that it would acquire the company for $53 billion.

Bakken production averaged 190,000 boe/d in the third quarter, up 14% compared to 166,000 boe/d in third-quarter 2022, owing to “increased drilling and completion activity and higher NGL and gas volumes received under percentage of proceeds contracts due to lower commodity prices,” Hess reported Oct. 25 in a third quarter operations and financial press release.

During third-quarter 2022, Hess drilled 28 wells, completed 41 wells and brought 26 new wells online.

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Chevron’s acquisition of Hess is expected to close in the first half of 2024, when the supermajor will add the Bakken assets as well as Hess’ portfolio of assets in the U.S. Gulf of Mexico, offshore Southeast Asia and offshore Guyana. Guyana is expected to emerge as the dominant asset in coming years.

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Guyana growth engine

Hess participates in the 6.6 million-acre Stabroek Block with partners Exxon Mobil and CNOOC. Exxon operates the block with a 45% interest, while Hess holding a 30% interest and CNOOC 25%.

Hess’ net production from Guyana’s Stabroek Block averaged 108,000 bbl/d in the third quarter of this year from the block’s first two developments and the Liza Destiny and the Liza Unity FPSOs. Production was up 10% compared to an average 98,000 bbl/d produced in third-quarter 2022.

Hess sold nine Guyana oil cargos during third-quarter 2023 compared to eight cargos in third-quarter 2022.

During the third quarter of this year, the Liza Destiny FPSO encountered a mechanical issue that resulted in lower production. Exxon completed repairs in October and gross production is currently averaging between 150,000 bbl/d and 160,000 bbl/d, Hess reported.

The third development, Payara (Prosperity FPSO), with a gross production capacity of 220,000 bbl/d, is slated to commence operations in the fourth quarter. A fourth development, Yellowtail (One Guyana FPSO), was sanctioned in April 2022 with a gross production capacity of 250,000 bbl/d with initial production is slated for 2025.

A fifth development, Uaru, was sanctioned in April 2023 with a gross production capacity of 250,000 bbl/d, with initial production slated for 2026.

Also, Hess said that Exxon submitted the field development plan to the Guyanese government in October for the sixth development, Whiptail.

Additionally in this year’s third quarter, the Exxon-operated Lancetfish-2 appraisal well encountered 125 ft of net oil pay in appraisal reservoirs and 65 ft of net oil pay in a new discovery interval, Hess said. The Lancetfish-2 was drilled in 5,649 ft of water and is located 4 miles southeast of the Lancetfish-1 discovery well.