Hess Corp. posted a US$4.9 billion net loss in Q4, as the company moves forward to focus on its developments offshore Thailand and in the Gulf of Mexico, which are expected to contribute significant production and cash flow.
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The Ocean Blacklion at Stampede. Image from Hess. |
The US independent’s Q4 loss is much deeper, when compared to its net loss of $1.8 billion in Q4 2015.
“We see 2017 as the start of an exciting new chapter of value-driven growth for our company and our shareholders,” Hess CEO John Hess says. “We are increasing activity in the Bakken, our two offshore developments at North Malay Basin in the Gulf of Thailand and Stampede in the Gulf of Mexico are on track to come online in 2017 and 2018, and the Liza Field in Guyana is one of the industry’s largest oil discoveries in the last 10 years.”
In its exploration and production sector, Hess took a net loss in Q4 of $3.9 billion, compared to Q4 2015’s $1.7 billion net loss. For full-year 2017, Hess forecasts a E&P capex of $2.25 billion.
In 2016, the company’s full-year net production was 321,000 boe/d, excluding Libya. In 2017, Hess’s production is forecast to average between 300,000-310,000 boe/d, excluding Libya.
“It is important to note that first quarter 2017 production is expected to increase in excess of 10% from first quarter levels,” says Hess.
The company’s visible growth trajectory is underpinned by four key areas, which include three offshore projects.
“Two offshore developments, North Malay Basin and Stampede, which are expected to contribute significant production and cash flow when they come online in 2017 and 2018, respectively. And the world-class Liza and recent Payara oil discoveries in Guyana,” Hess says.
In the Gulf of Mexico, net production came in at 61,000 boe/d compared to 73,000 boe/d in the prior-year quarter, primarily as a result of unplanned well downtime due to subsurface valve failures at two fields and natural field declines. At Stampede, drilling operations and construction of the production facilities continued on schedule with first production targeted for 2018.
In Asia, the Hess-operated North Malay Basin offshore Malaysia, subsea tie-in work, hook-up and commissioning of the three wellhead platforms was completed, as drilling operations continued. First gas is projected for Q3 2017.
Offshore Guyana at the Exxon-operated Stabroek Block (Hess 30%), results from the Payara-1 well confirmed a second oil discovery on the block located approximately 10mi (16km) northwest of the world-class Liza oil discovery. The well encountered more than 95ft (29m) of high-quality, oil-bearing sandstone reservoirs and a production test is planned in Q1.
In 2017, Hess says the co-venture partners plan to appraise the Liza and Payara discoveries and continue to evaluate the resource potential on the broader Stabroek block with additional exploration drilling and seismic analysis planned.
“We expect to be in a position to sanction the first phase of the Liza development in 2017,” Hess says.
“In summary, we are well positioned to deliver visible and sustainable growth and value to our shareholders,” says Hess. “Offshore, our developments in the Gulf of Thailand and the deepwater Gulf of Mexico are poised to add significant volumes and become long-term cash generators.”
“Overall, we see 2017 as the start of an exciting new chapter of value driven growth and increasing production momentum for our company and our shareholders,” says Hess.
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