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Guyana oil bonanza helps Hess return US$265M to shareholders
– US$310M pay out planned for Christmas season
Kaieteur News – Executives at Hess Corporation have been able to successfully return US$265M to its shareholders in the form of share buybacks and dividends during the period July to September, 2022. Specifically making this known were, Chief Executive Officer (CEO), John Hess and his Chief Financial Officer (CFO), John Rielly.
CEO of Hess Corporation, John Hess
During his company’s third quarter earnings call for 2022, Rielly said the company continued its common stock share repurchases with the purchase of approximately 1.4 million shares for US$150 million. He said Hess intends to acquire the remaining board authorized amount of US$310 million in the fourth quarter of this year. The share repurchase programme was approved earlier this year and totaled US$650M. He said too that total cash returned to shareholders in the third quarter amounted to US$265 million including dividends.
For the CEO, he was keen to note that the company’s financial performance can be credited to its 30 percent interest in the Stabroek Block, as well as its productive assets in the USA.
As free cash flow generation steadily increases in the years ahead, the Hess Boss said share repurchases will represent a growing proportion of return of capital. He was keen to stress that key to its strategy is Guyana – one of the industry’s highest margin, lowest carbon intensity and highest growth oil and gas prospects according to Wood Mackenzie data.
On the Stabroek Block in Guyana, where ExxonMobil is the operator, Hess said his company continues to see the potential for six floating production storage and offloading vessels or FPSOs in 2027, with a gross production capacity of more than one million barrels of oil per day and up to 10 FPSOs to develop the discovered resources on the block.
In terms of sanctioned oil developments on the block, Hess said the Liza Phase One and Liza Phase Two developments are currently operating at their combined gross production capacity, of more than 360 thousand barrels of oil per day. He said too that the third development at the Payara Field, with a gross production capacity of approximately 220 thousand barrels of oil per day, remains on schedule for start up at the end of 2023.
With respect to its fourth development, Yellowtail, which was sanctioned in April, Hess said it will be the largest development to date on the Stabroek Block, with first oil expected in 2025. The project will develop an estimated recoverable resource base of approximately 925 million barrels of oil, and have a gross production capacity of approximately 250 thousand barrels of oil per day.
Importantly, the Hess Chief said front end engineering and design work for the fifth development at Uaru is underway, with a Plan of Development expected to be submitted to the government before year end.
In terms of exploration and appraisal in Guyana, Hess reminded of there being two new discoveries on the Stabroek block at Yarrow and Sailfin, bringing our total this year to nine. These discoveries will add to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion barrels of oil equivalent.
In summary, the Hess Chief said, “We continue to successfully execute our strategy and deliver strong operational and ESG performance. 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 the best cash flow growth among our peers.”
As his company’s portfolio becomes increasingly free cash flow positive, Hess said it will continue to prioritize the return of capital to shareholders through further dividend increases and share repurchases.
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