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Guyana’s oil helps Hess deposit US$515M in third quarter
– company to sell 9 million barrels from Stabroek Block by December
Kaieteur News – American oil explorer and producer, Hess Corporation, reported yesterday that it earned a net income of US$515 million, or US$1.67 per common share, in the third quarter of 2022. This is a significant increase when compared with a net income of US$115 million, or US$0.37 per common share, in the third quarter of 2021.
Hess Corporation CEO, John Hess
Hess said the improvement in earnings was primarily due to higher realized selling prices and sales volumes in the third quarter of 2022. It was also keen to note that net income in the second quarter also benefitted from similar circumstances as this was a substantial US$667 million.
In the third quarter of 2022, Hess said it sold eight cargos of crude oil in Guyana, up from six cargos in the second quarter. In the fourth quarter, Hess said it expects to sell nine cargos from Guyana.
At the Stabroek Block where Hess has a 30 percent working interest, the company noted that net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 98,000 barrels of oil per day (bopd) in the third quarter of 2022 compared with 32,000 bopd in the prior-year quarter.
As for the Liza Unity FPSO which commenced production in February 2022, Hess said it reached its production capacity of 220,000 gross bopd in July 2022. Together with the Liza Destiny, Guyana is producing an average of 360,000 barrels of oil.
Hess said Guyana’s net production is forecast to be approximately 110,000 bopd in the fourth quarter. For the full year 2022, this newspaper understands that Guyana’s net production is forecast to be approximately 77,000 bopd.
In terms of the third development, Payara, Hess reminded that it will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first production expected at the end of 2023.
As for the fourth development, Yellowtail, Hess also recalled that this was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross bopd. First production is expected in 2025.
Furthermore, Hess noted that the eighth and ninth discoveries of this year were announced at Yarrow-1 and Sailfin-1, which adds to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion barrels of oil equivalent resources.
The Yarrow-1 well encountered approximately 75 feet of high quality oil bearing sandstone reservoirs. The well was drilled in 3,560 feet of water and is located approximately 9 miles southeast of the Barreleye-1 discovery. The Sailfin-1 well encountered approximately 312 feet of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 4,616 feet of water and is located approximately 15 miles southeast of the Turbot-1 discovery.
Hess said too that the Banjo-1 exploration well which was drilled during the quarter and did not encounter commercial quantities of hydrocarbons.
Looking ahead, Chief Executive Officer (CEO) of the American energy independent, John Hess said the company continues to successfully execute its strategy and deliver strong operational performance. He said, “We offer a unique value proposition – to grow both our intrinsic value and our cash returns by increasing our resource base, delivering a lower cost of supply and generating industry leading cash flow growth.”
As its portfolio becomes increasingly free cash flow positive, the Hess boss said his company will continue to prioritize the return of capital to shareholders through further dividend increases and share repurchases.
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