Hess allocates over half of $2.1-billion capex budget to production

Hess Corp. set its 2018 capital and exploratory budget at $2.1 billion, allocating 56% to production, including $900 million to increase its Bakken rig count to 6 from 4 by yearend.

Hess Corp. set its 2018 capital and exploratory budget at $2.1 billion, allocating 56% to production, including $900 million to increase its Bakken rig count to 6 from 4 by yearend.

The company will allocate $1.17 billion (56%) for production, $555 million (26%) for offshore developments, and $375 million (18%) for exploration and appraisal activities.

With the additional rigs in the Bakken in North Dakota, Hess plans to drill 120 wells and to bring online 95 wells. Funds are also included for non-operated wells and pad construction in preparation for 2018-19 drilling.

Production activities in the North Malay basin where Hess is operator with 50% interest and the Malaysia-Thailand Joint Development Area (Hess 50%) in the Gulf of Thailand will get $175 million.

Another $95 million is set for production operations in the deepwater Gulf of Mexico, completion of five previously drilled wells in the Utica shale in Ohio (Hess 50% and operator), production operations in Libya (Hess 8.16%), and production operations at South Arne field (Hess 61.5% and operator) in Denmark, where a sales process is under way that is expected to be completed in 2018.

Hess will allocate $250 million to the Liza Phase 1 development offshore Guyana (Hess 30%), where development drilling is expected to begin in the second quarter of this year with first production by 2020.

Also in Guyana, $65 million is marked for front end engineering and design work for future development phases and capitalized interest.

To continue development in Stampede field in the deepwater Gulf of Mexico, Hess has allocated $240 million. Hess, operator with 25% interest, is on track to start up in the first quarter of 2018.

To drill exploration and appraisal wells on the Stabroek Block offshore Guyana (Hess 30%), one exploration well on Block 42 in Suriname (Hess 33%), and one exploration well offshore Nova Scotia, Canada (Hess 50%), Hess has allocated $375 million. Funds are also included for seismic acquisition and processing and for license acquisitions.

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