Hess makes Bakken, Guyanese production gains in Q4 2023 on heels of Chevron acquisition
(WO) – According to Hess’ Q4 2023 financial report, the company’s E&P net income was $512 million in the fourth quarter of 2023, compared with $641 million in the fourth quarter of 2022. On an adjusted basis, E&P fourth quarter 2023 net income was $531 million, compared with $565 million in the prior-year quarter.
Net production was 418,000 boed in the fourth quarter of 2023, compared with 376,000 boed, proforma for asset sold, in the fourth quarter of 2022, primarily due to higher production in the Bakken and Guyana. Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $13.29 per boe in the fourth quarter of 2023, compared with $12.72 per boe, proforma for asset sold, in the prior-year quarter.
Oil and gas reserves estimates. Oil and gas proved reserves at Dec.31, 2023 were 1.37 Bboe, compared with 1.26 Bboe at Dec. 31, 2022. Proved reserve additions and net revisions in 2023 totaled 261 MMboe, primarily from Guyana, which included sanctioning of the Uaru development, and from the Bakken.
The corporation replaced 178% of its 2023 production at a finding and development cost of $16.00 per boe.
Bakken (Onshore U.S.). Net production from the Bakken was 194,000 boed in the fourth quarter of 2023, compared with 158,000 boed in the prior-year quarter, reflecting increased drilling and completion activity, severe winter weather in the fourth quarter of 2022, and higher NGL and natural gas volumes received under percentage of proceeds contracts due to lower commodity prices.
NGL and natural gas volumes were 19,000 boed in the fourth quarter of 2023, compared with 12,000 boed in the fourth quarter of 2022, due to lower realized NGL and natural gas prices increasing volumes received as consideration for gas processing fees.
During the fourth quarter of 2023, Hess operated four rigs and drilled 33 wells, completed 30 wells, and brought 33 new wells online. The corporation plans to continue operating four drilling rigs in 2024.
Gulf of Mexico (Offshore U.S.). Net production from the Gulf of Mexico in the fourth quarter of 2023 was 30,000 boed, compared with 35,000 boed in the prior-year quarter.
In the fourth quarter, Hess the high bidder on 20 leases in Lease Sale 261 for $88 million. The company expects to be awarded these leases in the first quarter of 2024.
Guyana (Offshore). At the Stabroek Block (Hess – 30%), net production totaled 128,0002 bopd in the fourth quarter of 2023, compared with 116,0002 bopd in the prior-year quarter.
In November, production commenced from the Prosperity FPSO at Payara, which contributed 14,000 net bopd in the fourth quarter of 2023. The fourth development on the block, Yellowtail, was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in 2025. The fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd and first production expected in 2026. The operator submitted the field development plan for the sixth development, Whiptail, to the Government of Guyana in October 2023.
Southeast Asia (Offshore). Net production at North Malay basin and JDA was 66,000 boepd in the fourth quarter of 2023, compared with 67,000 boepd in the prior-year quarter.
Capital and exploratory expenditures. E&P capital and exploratory expenditures were $1,480 million in the fourth quarter of 2023, compared with $818 million in the prior-year quarter, reflecting the purchase of the Liza Unity FPSO in the fourth quarter of 2023 for approximately $380 million, higher development activities in Guyana, and higher drilling activity in the Bakken.
Full year 2024 E&P capital and exploratory expenditures are expected to be approximately $4.2 billion, which includes the recent acquisition of leases from the Gulf of Mexico Lease Sale 261.
Lead image: The Stabroek Block (Source: Hess Corporation)
