After years of strategic investments behind exploration and development efforts in Guyana’s Stabroek Block, Hess Corporation declared 2022 as the year it reaps the billion-dollar rewards of its patience and labour.
According to its Chief Executive Officer (CEO), John Hess at a Goldman Sachs conference on Thursday, the Liza Phase Two Project which will produce 220,000 barrels of oil per day is on track to come on stream in the first quarter, following which, the company which has a 30 percent stake in the Stabroek Block, will earn US$1B annually. Hess said the free cash flow that will be generated from the Liza Two Project would allow the company to pay off its US$500M term loan while providing leverage to increase return capital to shareholders.
The CEO said, “Our strategy has been and continues to be to deliver high return resource growth, deliver a low cost of supply and deliver industry leading cash flow growth while keeping industry leadership in ESG. In terms of our resource growth, we do have a differentiated portfolio and we have been very disciplined in allocating capital to the best rocks for the best returns.”
Hess continued, “We have been very focused on our portfolio which includes, Deepwater Gulf of Mexico, the Bakken, Malaysia and Guyana and all four of those assets are free cash flow generative in 2022.”
In terms of the low cost of supply, because of the investments Hess has made in Guyana, its costs are forecast to decline by 25 percent to US$9 dollars per boe by 2026. The CEO further noted that the company’s portfolio breakeven will also be one of the lowest in the business with a decline of US$45 per barrel Brent by 2026.
“So, you know, it really does position us as we go forward and ultimately focuses on cash flow and in terms of delivering industry leading cash flow…we have the best cash flow story in the business,” the CEO concluded.
