Hess reports $5.8 billion capital budget for 2014

Hess Corp. reported that its exploration and production capital budget for 2014 is expected to reach $5.8 billion, almost half of which, $2.85 billion, will be spent on unconventional shale resources.

The remainder of the budget will go toward production at $1.475 billion, developments at $925 million, and exploration at $550 million.

“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,” said John Hess, Hess chief executive officer.

Unconventional budget

Greg Hill, Hess president and chief operating officer, added, “Our expenditures in the Bakken are planned to be $2.2 billion in 2014, flat with 2013. However, as a result of lower well costs and decreased investments in infrastructure projects we plan to operate 17 rigs vs. 14 last year and to bring 225 new operated wells online in 2014 compared to 168 in 2013.”

Hill continued, “In addition, we plan to increase our expenditures in the emerging Utica shale play to $550 million from $455 million last year, as we focus our activities on the appraisal and development of the wet gas window.”

Of the $2.85 billion purposed for unconventional plays, $2.2 billion will be used for the development of the Bakken shale in North Dakota.

Hess in 2013 reported a $6.7 billion E&P budget, 40% of which was to be dedicated to unconventional oil and gas plays. The Bakken was subject to receive $2.2 billion, down from $3.1 billion in 2012 (OGJ Online, Jan. 11, 2013).  

Hess plans to operate 17 rigs and bring 225 new operated wells online while investing $350 million on major projects, including the completion of the expansion of the Tioga gas plant and associated pipeline and compression projects.

The wet gas window of the Utica shale play in Ohio will be the target of 35 new wells at a cost of $550 million.

Hess in September 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 lean gas production in the Utica (OGJ Online, Sept. 4, 2013).

E&P budget

The remaining 51% of the company’s 2014 budget will be used for production, development, and exploration around the world.

Hess’s production budget is expected to reach $1.475 billion, divided among Equatorial Guinea, Norway, the Gulf of Thailand, Denmark, and the deepwater Gulf of Mexico.     

The company’s $925 million development budget includes start-up of the Tubular Bells field in the deepwater gulf and full field development of the North Malay basin project

Hess’s $550 million exploration budget encompasses Ghana, Iraqi Kurdistan, and deepwater gulf.

Last year, Hess undertook a large scale divestiture to repay debt and strengthen its balance sheet, during which the company parted with its energy marketing units, Russian subsidiary Samara-Nafta along with interests in the Pangkah and Natuna A assets offshore Indonesia, Beryl field in the UK North Sea, the Eagle Ford play in Texas, and the Azeri, Chirag, and Guneshli fields in Azerbaijan (OGJ Online, Dec. 2, 2013).

Related Articles

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...

USGS: Water usage for fracturing varies widely across shale plays

07/01/2015 The volume of water required to hydraulically fracture wells varies widely across the country, according to the first national analysis and map of ...

Case for Keystone XL has grown stronger, TransCanada tells Kerry

06/30/2015 Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national ...

Forum extends study of subsea integrity


Work by an industry forum called SURF IM Network, which studies oil and gas subsea integrity management, has been extended by 3 years.

Survey begins of collaboration on the UKCS


Deloitte has begun a survey about collaboration in the oil and gas producing industry of the UK Continental Shelf.

Lytle named to Canada’s National Energy Board


Murray Lytle has been appointed as a full-time member of Canada’s National Energy Board for a term of 7 years, effective July 6.

White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected