Hess Announces 2023 Capital Budget, Bakken Investment Remains Strong

NEW YORK–(BUSINESS WIRE)–Jan. 24, 2023– Hess Corporation (NYSE: HES) today announced a 2023 Exploration & Production capital and exploratory budget of $3.7 billion, of which more than 80% will be allocated to Guyana and the Bakken.

Net production is forecast to average between 355,000 and 365,000 barrels of oil equivalent per day in 2023. Bakken net production is forecast to average between 165,000 and 170,000 barrels of oil equivalent per day and Guyana net production is forecast to average approximately 100,000 barrels of oil per day in 2023(1).

“Our capital program reflects continued execution of our strategy to invest only in high return, low cost opportunities within our portfolio,” CEO John Hess said. “More than 80% of our 2023 budget is allocated to Guyana, which is positioned to be one of the highest margin, lowest carbon intensity oil developments in the world, and to the Bakken, our largest operated asset where we have a robust inventory of high return future drilling locations.”

Chief Operating Officer Greg Hill said: “In the Bakken, we plan to operate a four rig program, which will enable us to maximize free cash flow generation, optimize our in-basin infrastructure and drive further reductions in our unit cash costs. In Guyana, our focus in 2023 will be on advancing our high value oil developments and continuing an active exploration and appraisal program on the Stabroek Block.”

The $3.7 billion budget is allocated as follows: $1.45 billion (39%) for production, $1.7 billion (46%) for offshore Guyana developments and $550 million (15%) for exploration and appraisal activities.

Production

  • $1.1 billion to fund a four rig program in the Bakken. The company expects to drill approximately 110 gross operated wells and to bring online approximately 110 wells in 2023. Funds are also included for investment in nonoperated wells.
  • $225 million for production activities at North Malay Basin (Hess 50% and operator) offshore Peninsular Malaysia and the Malaysia/Thailand Joint Development Area (Hess 50%) in the Gulf of Thailand.
  • $125 million for production activities in the Gulf of Mexico, including drilling two tieback wells and seismic acquisition and processing.

Developments

  • $90 million associated with the Liza Phase 1 and Phase 2 developments on the Stabroek Block offshore Guyana (Hess 30%), which are currently operating at a combined gross production capacity of more than 360,000 barrels of oil per day (bopd).
  • $1.21 billion for the developments on the Stabroek Block at Payara, Yellowtail and Uaru. Payara is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bopd. Yellowtail is expected to come online in 2025 with a gross production capacity of approximately 250,000 bopd. Uaru is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 bopd.
  • $150 million for the Gas to Energy project with first gas expected by year end 2024.
  • $250 million primarily for front end engineering and design work for future development phases on the Stabroek Block.

Exploration and Appraisal

  • $550 million to drill approximately 10 exploration and appraisal wells on the Stabroek Block, two wells in the Gulf of Mexico and one well offshore Newfoundland, Canada. Funds are also included for seismic acquisition and processing in Guyana, Suriname and the deepwater Gulf of Mexico.

News Release

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