Chief Executive Officer of Hess Corporation John Hess yesterday reiterated that Guyana is key to the Company’s long-term strategy with multiple phases of low cost oil developments to come online during the next several years.
Speaking at the Company’s second quarter earnings conference call, Hess pointed out that Guyana is positioned to become a significant cash engine with multiple projects expected to commence in the next several years. The company expects that this will drive their portfolio breakeven Brent oil price below $40 per barrel by the middle of the decade.
“Based on the most recent third party estimates, our cash flow is estimated to grow at a compound annual growth rate of 42 percent between 2020 and 2023, which is 75 percent above our peers and puts us in the top 5 percent of the S&P 500. With a line of sight for up to 10 FPSOs (oil platforms) to develop the discovered resources in Guyana, this industry leading cash flow growth rate is expected to continue through the end of the decade. Investors want durability and growth in cash flow – we have both,” he said. He also said that the company’s Guyana development are the highest margin, lowest carbon intensity oil and gas assets globally, according to recent data from Wood Mackenzie.
He added that Guyana is key to Hess’s long-term strategy with its low cost of supply and industry leading financial returns noting that there is an active exploration and appraisal programme this year on the Stabroek Block, where Hess has a 30 percent interest and ExxonMobil is the operator.There is potential for at least six FPSOs on the Stabroek block by 2027 and up to 10 FPSOs to develop the discovered resources on the block. Hess stated that they foresee multibillion barrels of future exploration potential remaining.
Meanwhile, Chief Operating Officer Greg Hill said that drilling activity in the second half of 2021, after Whiptail-2, the Noble Don Taylor will drill the Pinktail-1 exploration well, located 5 miles southeast of Yellowtail-1, followed by the Tripletail- 2 appraisal well, located 5 miles south of Tripletail-1.
He also said that the Noble Tom Madden will spud the Cataback-1 well, located 4.5 miles southeast of the Turbot-1 discovery, in early August.
In the third quarter, the Noble Sam Croft will drill the Turbot-2 appraisal well, then transition to development drilling operations for the remainder of the year. The Stena Carron will conduct a series of appraisal drill stem tests at Uaru-1, then Mako-2 and then Longtail-2.
In the fourth quarter, the first dedicated test of the deep potential at the Fangtooth prospect, located 9 miles northwest of Liza-1 will be drilled.
