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Speed of multiple Guyana projects will increase mega-profits for company and shareholders annually – Hess Boss tells the world
Kaieteur News – With multiple oil projects in Guyana coming online at industry-leading speed combined with its robust inventory of high-return drilling locations in the USA, Hess Corporation believes it is well positioned to deliver highly profitable production through 2027. The American oil explorer projects there will be a production growth of more than 10% annually. Taking this into account, the company alluded that significant profits will be flowing into the company’s account, as well as the pockets of shareholders, particularly over the next four years.
Hess Corporation’s Chief Executive Officer (CEO) John Hess
At the Stabroek Block, Hess said operator and ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL) currently has a line of sight to six floating production, storage, and all floating vessels, or FPSOs, operating in 2027 with a gross production capacity of more than 1.2 million barrels of oil per day. These projects Hess said will not only expand its resource base but ensure it steadily moves down the cost curve.
By 2027, Chief Executive Officer (CEO), John Hess said his company forecasts that expenses will decline by 25% to approximately US$10 per barrel of oil equivalent (BOE) and that its portfolio will achieve a breakeven Brent oil price of approximately US$50 per barrel.
Hess further noted that with the five sanctioned oil developments on the Stabroek Block, his company will have “an industry-leading rate of change story and an industry-leading duration story” providing a highly differentiated value proposition.
The Hess boss said, “Based upon a flat Brent oil price of US$70 per barrel — US$75 per barrel, our cash flow is forecast to increase by approximately 25% annually between 2022 and 2027, more than twice as fast as our topline growth. And our balance sheet will also continue to strengthen…”
The CEO added, “Successful execution of our strategy has uniquely positioned our company to deliver significant value to shareholders for years to come, both by growing intrinsic value and by growing cash returns.”
He said Hess’s financial priorities for 2023 will be to allocate capital to high-return low-cost investment opportunities, maintain a strong balance sheet and cash position to ensure that it can fund world-class investment opportunities in Guyana and also return up to 75% of annual free cash flow to shareholders through dividend increases and share repurchases.
Looking ahead, Hess said his company plans to continue increasing its regular dividend to a level that is attractive to income-oriented investors, but sustainable in a low oil price environment.
Hess was keen to remind shareholders that Guyana is key to its growth strategy; adding that it is the industry’s largest oil province discovered in the last decade, where it has a 30% interest.
Since 2015, Exxon and partners have had more than 30 discoveries on the block, including two since the start of 2023, underpinning a gross discovered recoverable resource estimate of more than 11 billion barrels of oil equivalent with multi-billion barrels of exploration potential remaining.
The partners also see the potential for up to 10 FPSOs to develop the discovered resources on the block.
It must be noted that ExxonMobil Corporation at its first quarter earnings call was keen to note the industry-leading pace with which is it moving in Guyana’s Stabroek Block. Just recently, its officials said the oil giant is deploying the best technologies and expertise to develop its unique asset in the Guyana basin to deliver unprecedented results.
In terms of operating projects in the Stabroek Block, the Liza Phase One and Liza Phase Two developments produced an average of approximately 375,000 gross barrels of oil per day in the first quarter. The FPSO for the third sanctioned development at Payara arrived on the Stabroek Block earlier this month ahead of schedule and is targeted to start up early in the fourth quarter with a gross production capacity of approximately 220,000 barrels of oil per day.
- approximately, ess Boss tells the world, Esso Exploration, ExxonMobil affiliate, Production Guyana Limited, Stabroek Block, the Liza Phase
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