Hess Corp. continues to plow ahead in North Dakota as it waits to close a $55 billion deal with Chevron Corp. which is tied up in arbitration over interests offshore Guyana.
New York-based Hess reported net production of 206,000 boe/d from the Bakken during the third quarter, the company announced in earnings Oct. 30.
Third-quarter Bakken volumes included 91,000 bbl/d of crude oil, 75,000 bbl/d of NGL and 238 MMcf/d of natural gas.
During the quarter, Hess operated four drilling rigs in the Bakken, where the company held approximately 466,000 net acres as of year-end 2023.
Hess drilled 32 Bakken wells, completed 36 and brought 37 new wells online last quarter. The company plans to continue running four Bakken rigs in the fourth quarter.
Bakken net production is expected to range between 200,000 boe/d and 205,000 boe/d during the fourth quarter, “reflecting lower anticipated volumes received under percentage of proceeds contracts,” Hess said.
Analysts at Piper Sandler said Hess’ “strong production” in the Bakken offset effects from planned maintenance in Guyana, where Hess owns a 30% stake in the prolific offshore Stabroek Block.
Higher NGL volumes versus street expectations and lower operating expenses with other positive takeaways from Hess’ third-quarter results, according to analysts at Raymond James.
Hess also grew production from the Gulf of Mexico. GoM output averaged 38,000 boe/d in the third quarter, up from 28,000 boe/d a year ago.
The boost in the GoM is due to the startup of the Pickerel well that came online in June as a tieback to the Tubular Bells production platform.
Despite strong domestic results, the most important issue facing Hess is the arbitration hearing next summer regarding its ownership stake in Guyana, analysts say.
RELATED
Chevron’s $53B Hess Deal Delayed Until At Least Summer 2025
Chevron’s $55 billion acquisition of Hess will give Chevron a new foothold in North Dakota and a boost in the GoM. But the deal is seen by analysts to largely center on Hess’ 30% interest in Guyana’s Stabroek Block.
Exxon Mobil Corp. owns a 45% controlling stake in the Stabroek joint venture (JV), while China National Offshore Oil Corp. (CNOOC) owns the remaining 25% interest.
Exxon and CNOOC argue that they have the right of first refusal on Hess’ ownership interest under the existing contract. Hess’ subsidiary Hess Guyana Exploration Ltd. is in arbitration regarding the transfer of its Guyana stake to Chevron.
A pivotal arbitration hearing on the matter isn’t scheduled until mid-2025.
Net production to Hess from the Stabroek Block averaged 170,000 bbl/d during the third quarter, up from 108,000 bbl/d during the same quarter a year ago.
The jump in production is primarily due to the startup of the Stabroek’s third development, Payara, which began production in November 2023.
However, production from Stabroek was expected to fall as two offshore developments were connected to pipelines to transport natural gas to Guyana for power generation.
Hess’ Guyana net production is expected to average 185,000 bbl/d to 190,000 bbl/d in the fourth quarter, “reflecting recovery from planned downtime in the third quarter,” the company said.
The fourth development on the Stabroek Block, Yellowtail, is expected to begin production in 2025. Yellowtail will have a gross production capacity of about 250,000 bbl/d.
RELATED
Chevron, in Hess Holding Pattern, Sells $6.8B in Alaska, Canada
Recommended Reading
BP Energy Partners Invests in Pipeline Inspection Company Novitech
2024-10-24 - BP Energy Partners will invest in Novitech, whose Micron Technology is a leading pipeline inspection technology in the energy industry.
Permian Resources Closes $820MM Bolt-on of Oxy’s Delaware Assets
2024-09-17 - The Permian Resources acquisition includes about 29,500 net acres, 9,900 net royalty acres and average production of 15,000 boe/d from Occidental Petroleum’s assets in Reeves County, Texas.
International OFS Firm HMH Plans to IPO, Activate in M&A
2024-08-13 - The firm is a 50/50 joint venture of Baker Hughes and Akastor ASA formed in 2021 to include brands such as Hydril and Vetco Gray as well as Wirth and Maritime Hydraulics.
APA Corp., TotalEnergies Announce $10.5B FID on ‘Goliath’ Sized Deal Offshore Suriname
2024-10-01 - APA and TotalEnergies’ offshore Suriname GranMorgu development is estimated to hold recoverable reserves of more than 750 million barrels.
Oceaneering Acquires Global Design Innovation
2024-10-30 - Oceaneering purchased Global Design Innovation, the only provider certified by the United Kingdom Accreditation Service (UKAS) to perform remote visual inspection using point cloud data and photographic images.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.