Increased production from the Bakken Shale and a deepwater project offshore Guyana will provide Hess Corp. with 10% oil production growth annually through 2025, company officials said during an investor day event Dec. 11.
CEO John Hess told investors that the company is at "a transformative inflection point" as it moves beyond investment mode into an era where its major assets will produce free cash flow. The most important of those assets, as the company has made clear over the past couple of years, are their operations in the Bakken and Guyana.
On Dec. 10, Hess announced that 75% of its $2.9 billion capital budget for 2019 would be devoted to the two plays, with $1.43 billion to fund six rigs in the Bakken and more than $570 million for phases 1 and 2 of the Liza projects offshore Guyana.
The company earmarked an additional $260 million for Liza phase 1 offshore Guyana, which is on track for production by early 2020, and $310 million for Liza phase 2, including the development for Payara and the front-end engineering and design work for future development phases.
During the presentation, company officials said the Guyana joint venture with Exxon Mobil Corp. could generate as much as $4 billion in free cash flow through 2025. Hess expects production to kick off in 2020, with the potential to reach 750,000 barrels of oil equivalent per day by 2025.
In the Bakken, Hess said it now expects to produce 200,000 boe/d by 2021, up from a previous estimate of 175,000 boe/d. The company believes that its Bakken holdings could produce as much as $5 billion in free cash flow between 2019 and 2025.
The exploration and production company's $123 million in adjusted income in the third quarter was its first profit in nearly four years.