US independent Hess has unveiled a new upstream capital and exploration budget for the year, as it looks for more hydrocarbons resources in the Americas and to increase production from its major developments.
Hess plans to invest $2.6 billion in 2022, of which 80% will be allocated to Guyana and the Bakken shale formation in the US.
The amount represents a 36.8% increase from the $1.9 billion capital expenditure announced for 2021, as Hess is boosting investments in the US both in offshore and onshore.
“Our capital programme reflects our continued discipline in investing in high return, low cost opportunities within our portfolio,” said Hess chief executive John Hess.
On the exploration and appraisal front, Hess plans to participate in the drilling of 12 wells in the ExxonMobil-operated Stabroek block offshore Guyana.
“These will include lower risk wells near existing discoveries, higher risk step outs and several penetrations that will test deeper Lower Campanian and Santonian intervals,” said Hess chief operating officer Greg Hill.
The company anticipates as many as four wildcats to be drilled in the first quarter in Stabroek. These include Barreleye-1, Patwa-1, Tarpon-1 and Lukanani-1, with the Tilapia-2 appraisal well also in sight.
In neighbouring Suriname, planning is underway for drilling a second well in Block 42. Shell drilled the Pontoenoe-1 well in this block in 2018, but failed to detect hydrocarbons.
According to Hill, Shell expects to spud the Zanderij-1 exploration well in Block 42 around mid-year to target potential in Santonian-era formations.
“We see the acreage as a potential play extension from the Stabroek block, with similar play types and trap styles,” he added.
In the Gulf of Mexico, Hess will resume drilling operations after a two-year hiatus, with one tie-back well at the Shell-operated Llano field, and the Huron wildcat in the Green Canyon Block 69 as well as in the Bakken shale play.
“In the Bakken, we plan to operate a three rig programme, which will enable us to generate significant free cash flow, lower our unit cash costs and further optimise our infrastructure,” said Hill.
Hess intends to drill approximately 90 wells in the Bakken and bring 85 wells online this year, thus increasing production in the region by between 6% and 9% to as much as 170,000 barrels of oil equivalent per day.
As for Guyana, output is expected to more than double from 31,000 boepd to close to 70,000 boepd with the start-up of the Liza Unity floating production, storage and offloading vessel in the Liza field.
Hess posted a net profit of $265 million in the fourth quarter of 2021, compared to a net loss of $97 million in the same period a year ago. Total revenues were up 59% to $2.26 billion.