Hess Corporation announced Monday that it has entered into an agreement to sell its 28% working interest in the Shenzi Field in the deepwater Gulf of Mexico to BHP Billiton, the field’s operator, for a total consideration of $505 million.
The transaction is subject to customary adjustments and will become effective on July 1, 2020.
Hess said the field produced an average of 11,000 net barrels of oil equivalent per day in the first eight months of 2020.
“Proceeds will be used to fund our world class investment opportunity in Guyana,” CEO John Hess said. “This sale is aligned with our strategy to preserve cash and preserve the long-term value of our assets in the current low oil price environment.”
The transaction is expected to close before year end 2020 and is subject to customary closing conditions.
Hess, a 30 percent stakeholder in Guyana’s Stabroek Block, recently committed around US$1.8 billion for the Payara development offshore the South American country, representing its net share of development costs, excluding pre-sanction and FPSO purchase costs.
The Stabroek Block co-venturers have found more than 8 billion barrels of oil equivalent resources in Guyana since 2015. They have already sanctioned three projects that will be producing a combined 560,000 barrels of oil per day by 2024 and production is expected to surpass 750,000 bpd by 2026 as other developments come on stream.
