Hess sets Bakken budget of $2.2 billion
Hess Corp. will allocate nearly half of its $5.8 billion exploration and production budget to the development of unconventional resources in 2014, with the bulk of unconventional spending directed toward the Bakken tight oil formation in North Dakota.
The 2014 budget calls for spending $2.85 billion on unconventional resources, including $1.45 billion on production, $925 million on development, and $550 million on exploration.
Expenditures in the Bakken will total $2.2 billion, roughly flat with 2013 spending. Hess will operate 17 rigs and bring 225 new operated wells online in the formation this year, up from 14 rigs and 168 wells in 2013.
The company has allocated $350 million to major Bakken infrastructure projects, including the expansion of the Tioga Gas Plant to a capacity of 250 MMcfd, and associated pipeline and compression projects.
The Utica shale will receive a $550 million share of Hess' unconventional budget. The company plans to drill 35 wells primarily in the wet gas window of the shale formation this year.
The rest of the exploration and production spending will be spread across Hess' portfolio of international holdings, which includes positions in Denmark, Equatorial Guinea, the Gulf of Mexico, Norway, and Thailand.
North Dakota enacts flaring reduction rule
The North Dakota Industrial Commission has approved a new plan to lower the amount of natural gas flared in the state.
Under the rules, approved by the commission in early March, drilling permit applicants will be required to prepare a gas capture plan for each planned well.
Companies will be required to begin providing these plans to the state on June 1, 2014. The information must also be made available to area natural gas gathering companies.
The new measures are expected to reduce the amount of natural gas being flared in North Dakota to 5% of production by 2020, from roughly 30% currently.
EIA statistics show an average of 310 MMcfd was flared in the Bakken last year, up from 160 MMcfd in 2011.
Lynn Helms, director of the Department of Mineral Resources, told the Prairie Business Magazine that midstream companies are more likely to invest in gas gathering projects if they know operators' plans a year or two in advance.
"We need to force that communication to happen," he said.
The rules are based on recommendations put forth by Helms, and the findings of a North Dakota Petroleum Council task force comprising of industry representatives.