Latest update April 7th, 2025 6:08 AM
Hess thanks Guyana for helping with profits in 2023 despite low oil prices
Kaieteur News – American oil producer, Hess Corporation reported yesterday that it made a net income of US$119 million, or US$0.39 per share, in the second quarter of 2023. This was however, a significant decline in profits when compared with the US$667 million, or US$2.15 per share, it made in the second quarter of 2022.
CEO, John Hess
During the company’s earnings call yesterday, Hess said the decrease in adjusted after-tax results reflects lower realised selling prices. Though its profit margin took a major plunge, Hess was keen to point out that its assets in Guyana and the Bakken, USA delivered higher production volumes in the second quarter of 2023 which helped to cushion the blow.
Hess told the market that net production was 387,000 barrels of oil equivalent per day (boepd) in the second quarter of 2023, compared with 303,000 boepd in the second quarter of 2022, primarily due to higher production in Guyana and the Bakken.
Expounding on the performance of its Bakken assets, Hess said net production was 181,000 boepd in the second quarter of 2023 compared with 140,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity, higher Natural Gas Liquid (NGL) and natural gas volumes and higher uptime after weather related shut-ins in the prior-year quarter.
The American explorer said the Bakken’s net production is forecast to be in the range of 175,000 boepd to 180,000 boepd for the full year 2023, up from our previous guidance range of 165,000 boepd to 170,000 boepd.
At the Stabroek Block where Hess has a 30 percent working interest, the company said net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 110,0002 bopd in the second quarter of 2023 compared with 67,0002 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 second quarter of 2023, Hess said it was able to sell nine cargos of crude oil from Guyana compared with six cargos in the prior-year quarter.
Additionally, Hess said net production guidance for Guyana for the full year 2023 is expected to be approximately 115,0002 bopd, compared to its previous guidance range of 105,000 bopd to 110,000 bopd.
With respect to the third development project in the Stabroek Block called Payara, Hess reminded that it has a production capacity of approximately 220,000 gross bopd and remains on track for startup early in the fourth quarter.
Turning to the fourth development, Yellowtail, Hess said this project was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in 2025. As previously reported, the fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd and first production expected in 2026.
Hess also noted during the earnings call that the the end of the first renewal period of the exploration licence for the Stabroek Block was extended one year from October 2023 to October 2024 as a result of force majeure due to the COVID-19 pandemic. Come next year, the company will be required to relinquish 20 percent of the block not held by discoveries.
Hess was also keen to note that during the second quarter, it diverted much of its revenues to Guyana and the Bakken. In this regard, the company said exploration and production expenditures were US$933 million in the second quarter of 2023 compared with US$622 million in the prior-year quarter.
Chief Executive Officer, John Hess believes such investments are destined to pay off, specifically as it relates to Guyana where more than 30 significant discoveries of low cost barrels have been unearthed. Hess said the company will remain focused on executing its strategy to deliver industry leading cash flow growth and financial returns to shareholders while safely and responsibly producing oil and gas to help meet the world’s growing energy needs.
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