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Hess posted blockbuster US$624M profit in 2022 fourth quarter
…company foresees more benefits for shareholders with another discovery at Stabroek Block
Kaieteur News – American oil producer, Hess Corporation, announced on Wednesday that it achieved a net income of US$624 million or US$2.03 per common share, in the fourth quarter of 2022 compared with net income of US$265 million, or US$0.85 per common share, in the fourth quarter of 2021.
Hess said the improvement in adjusted after-tax earnings compared with the prior-year period was primarily due to increased sales volumes in Guyana in the fourth quarter of 2022. Hess noted that the increased volumes was due to the onset of a second ship coming on stream.
CEO of Hess Corporation, John Hess
It was also pleased to announce a significant oil discovery at the Fangtooth SE-1 well on the Stabroek Block, offshore Guyana. The Fangtooth SE-1 well encountered approximately 200 feet of oil bearing sandstone reservoirs. The well was drilled in 5,397 feet of water by the Stena Carron and is located approximately 8 miles southeast of the original Fangtooth-1 well, which had encountered approximately 164 feet of oil bearing sandstone reservoirs.
Further appraisal activities are underway. Fangtooth will add to the block’s gross discovered recoverable resource estimate of more than 11 billion barrels of oil equivalent resources and has the potential to underpin a future oil development on the Stabroek Block. At the Stabroek concession where Hess holds a 30% working interest, the company said net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 116,000 barrels of oil per day (bopd) in the fourth quarter of 2022 compared with 31,000 bopd in the prior-year quarter.
The Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of 220,000 gross bopd in July 2022. In the fourth quarter, Hess said it sold 10 cargos of crude oil from Guyana compared with three cargos in the prior year quarter. It said net production is forecast to be approximately 100,000 bopd in 2023.
Hess said too that the third development, Payara, will utilise the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first production expected by the end of 2023. The fourth development, Yellowtail, was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross bopd, with first production expected in 2025.
A fifth development, Uaru, was submitted for approval to the Government of Guyana in the fourth quarter. Pending Government approvals and sanctioning, the project is expected to have a capacity of approximately 250,000 gross bopd with first oil anticipated at the end of 2026. “Our strategy is to grow our resource base, deliver a low cost of supply and generate industry leading cash flow growth – and at the same time maintain our industry leadership in environmental, social and governance performance and disclosure,” CEO John Hess said during the company’s earnings call yesterday. He added, “Our successful execution of this strategy has uniquely positioned our company to deliver significant value to shareholders by both growing intrinsic value and growing cash returns.”
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