Hess to allocate majority of $2.6-billion 2022 budget to Guyana, Bakken

Hess Corp. plans to allocate 80% of its 2022 exploration and production capital and exploratory budget of $2.6 billion to Guyana and Bakken assets.

Net production is expected to average 330,000-340,000 boe/d this year, excluding Libya. Bakken net production is forecast to average 165,000-170,000 boe/d.

In the Bakken, the company plans to operate a three-rig program, while in Guyana, the focus will be on advancing high value oil developments on the Stabroek block, and continuing exploration and appraisal programs.

Of the $2.6 billion budget, $1.15 billion (44%) is allocated to production; $1 billion (39%) for offshore Guyana developments, and $450 million (17%) for exploration and appraisal activities.

Production

The company will spend $790 million to fund a three-rig program in the Bakken where it expects to drill 90 gross operated wells and bring online about 85 wells in 2022. Funds are also included for investment in non-operated wells.

In the North Malay basin offshore Peninsular Malaysia (Hess 50%, operator) and the Malaysia-Thailand joint development area (Hess 50%) in the Gulf of Thailand, the company has allocated $270 million for production activities. Funds are included for drilling and facilities and also for work previously deferred due to COVID-19 and low commodity prices.

In the Gulf of Mexico, $90 million is earmarked for production activities, including drilling one tieback well at Llano field (Hess 50%) and seismic acquisition and processing.

Developments

Development capital includes $25 million for Liza Phase 1 development on Stabroek block (Hess 30%), where production optimization work is planned in first-quarter 2022.

Another $190 million is allocated for Liza Phase 2 development. With a capacity of 220,000 gross boe/d, first production is expected first-quarter 2022.

Payara development work will receive $400 million. With a capacity of about 220,000 gross boe/d, first production is expected in 2024.

Yellowtail development will see $210 million. With a capacity of about 250,000 gross boe/d, first production is expected in 2025.

Another $175 million will be spent primarily for front end engineering and design work for future Stabroek block development phases.

Exploration and appraisal

Hess will spend $450 million to drill about 12 exploration and appraisal wells on Stabroek block in Guyana (Hess 30%), the Huron-1 well in the Green Canyon area of the Gulf of Mexico (Hess 40%), and the Zanderij-1 well on Block 42 in Suriname (Hess 33%). Funds are also included for seismic acquisition and processing in Guyana, Suriname, and the deepwater Gulf of Mexico, and for license acquisitions.