Saturday, September 18, 2021

Hess reports US$252 million net income for Q1 2021, says Guyana projects remain on schedule

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Hess Corporation which holds a 30 percent stake in the Stabroek Block offshore Guyana reported on Wednesday a net income of of US$252 million for the first quarter of 2021.

Turning its attention to operations at the Stabroek Block, the Corporation said its net production from the Liza Field was 31,000 barrels of oil per day (bopd) compared with 15,000 bopd in the prior-year quarter.

It reminded that the Liza Destiny FPSO reached its nameplate capacity of 120,000 gross bopd in December 2020 and remained at this level during the first quarter of 2021. In mid-April, production from the Liza Destiny FPSO was curtailed for several days after a leak was detected in the flash gas compressor discharge silencer. Production was initially lowered but has since ramped back up and is expected to remain in the range of 100,000 to 110,000 gross bopd until repairs to the discharge silencer are completed in approximately three months. Following this repair, production is expected to return to, or above, nameplate capacity.

With regard to startup of Phase 2 of the Liza Field development, which will utilize the Liza Unity FPSO with an expected capacity of 220,000 gross bopd, Hess said this remains on track for early 2022.

As for the block’s third development, Payara, Hess said this will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd; with first oil expected in 2024.

A fourth development, Yellowtail, has been identified on the Stabroek Block with anticipated startup in 2025, pending government approvals and project sanctioning. Hess said the Stabroek Block is expected to have at least six FPSOs on the Stabroek Block by 2027 with the potential for up to 10 FPSOs to develop the current discovered recoverable resource base.

Furthermore, Hess was elated to remind shareholders that its Uaru-2 well encountered approximately 120 feet of high-quality oil-bearing sandstone reservoir, including newly identified intervals below the original Uaru-1 discovery. The well was drilled in 5,659 feet of water and is located approximately 6.8 miles south of the Uaru-1 well. The Uaru-2 discovery will add to the discovered recoverable resource estimate of approximately 9 billion boe.

In addition to this, Hess disclosed that the Stena DrillMAX is currently appraising the Longtail discovery, which will include a planned sidetrack. It said too that the Noble Don Taylor will drill the Mako-2 well after Uaru-2, while adding that the Stena Carron is currently drilling the Koebi-1 exploration well.

Following the announcement of the company’s fiscal performance for the first quarter, its Chief Executive Officer, John Hess said, “Our company continues to successfully execute our strategy to grow our resource base, have a low cost of supply and sustain cash flow growth.”

He concluded, “As our portfolio generates increasing free cash flow, we will first prioritize debt reduction and then the return of capital to our shareholders through dividend increases and opportunistic share repurchases.”

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