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Guyana helps Hess bank US$346M in first quarter of 2023
…announces another discovery with millions in profits for shareholders
Kaieteur News – American oil explorer Hess Corporation disclosed yesterday that it registered net income totaling US$346 million, or US$1.13 per share, in the first quarter of 2023.
Though this represented a positive outcome, it was still lower than the net income of US$417 million, or US$1.34 per share, in the first quarter of 2022. Hess said the decrease in after-tax results compared with the prior-year quarter reflects lower realised selling prices partially offset by the net impact of higher production volumes from Guyana in the first quarter of 2023.
Chief Executive Officer, John Hess
The company was keen to note that Guyana’s assets particularly at the Stabroek Block where it has a 30 percent interest, was a major contributor to its quarterly earnings. Hess said net production from the Liza Destiny and the Liza Unity floating, production, storage and offloading vessel totaled 112,000 barrels of oil per day (bopd) in the first quarter of 2023 compared with 30,000 bopd in the prior-year quarter.
Hess said the Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of approximately 220,000 gross bopd in July 2022. In the first quarter of 2023, the company said it sold nine cargos of crude oil from Guyana compared with two cargos in the prior year quarter. It further noted that the third development, Payara, which will utilise the Prosperity FPSO with a production capacity of approximately 220,000 gross bopd, is targeted for startup early in the fourth quarter. The Prosperity FPSO arrived at the Stabroek Block on April 11th and hook-up and commissioning activities have commenced.
With respect to the fourth development, Yellowtail, Hess said it was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross bopd, with first production expected in 2025. Hess also told its shareholders that Government and regulatory approvals are expected very soon for a fifth development, Uaru, with a production capacity of approximately 250,000 gross bopd.
New discovery
Importantly, the Corporation also announced an oil discovery at the Lancetfish-1 well on the Stabroek Block, offshore Guyana. The Lancetfish-1 well encountered approximately 92 feet of oil-bearing sandstone reservoir. The well was drilled in 5,843 feet of water by the Noble Don Taylor and is located approximately 4 miles southeast of the Fangtooth discovery. Hess said the Kokwari-1 exploration well was drilled during the quarter and did not encounter commercial quantities of hydrocarbons.
With respect to its capital and exploratory expenditures, Hess said these were US$765 million in the first quarter of 2023 compared with $580 million in the prior-year quarter, primarily due to higher drilling in the Bakken and development activities in Guyana. It said too that midstream capital expenditures were US$57 million in the first quarter of 2023 and $37 million in the prior-year quarter. “We continue to successfully execute our strategy, which offers a unique value proposition to investors,” Chief Executive Officer (CEO), John Hess said. With multiple phases of low-cost oil developments coming online in Guyana and its robust inventory of high return drilling locations in the Bakken, Hess boasted that his company is positioned to deliver durable cash flow growth that enables it to continue to invest in some of the highest return projects in the industry and to grow cash returns to shareholders.
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