Guyana to help boost Hess’ bank account with almost US$8B annually by 2027

Guyana to help boost Hess’ bank account with almost US$8B annually by 2027 – CEO tells Conference

Sep 13, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – American oil producer, Hess Corporation recently disclosed that the massive expansion of oil operations in Guyana’s Stabroek Block will help to boost its bank book with almost US$8B annually by 2027. Specifically making this disclosure at Barclays CEO Energy-Power Conference was the company’s Chief Executive Officer (CEO), John Hess.

Hess Corporation’s CEO, John Hess

During his participation at the event last week, Hess spoke glowingly about Guyana’s operations as well as its assets in the USA and how both will ensure the company delivers strong revenue growth. Hess said, “With multiple phases of Guyana developments coming online and our robust inventory of high return drilling locations in the Bakken, USA Hess can deliver production growth of more than 10 percent annually through 2027.”

The CEO told the conference that the Stabroek Block, operated by ExxonMobil Guyana Limited, has a line of sight to six massive floating, production, storage and offloading (FPSO) vessels in 2027 with a gross production capacity of more than 1.2 million barrels of oil per day. He said there is also potential for up to 10 FPSOs in the Stabroek Block to develop the more than 11 barrels of oil equivalent resources unlocked since 2015. With the Bakken on track to grow net production to 200,000 per day in 2025, Hess said the company’s ability to deliver high value resource growth in 2025 is unparalleled.

Additionally, Hess told the conference that his company’s wide net wide production forecast to 385-390,000 barrels of oil equivalent (boe) per day versus previous guidance of 360-375,000 boepd once again reflects the strong performance of its portfolio. That guidance he said was increased as the third oil project in Guyana called Payara is expected for start up before year-end.

In terms of a low cost of supply, as Hess’ resource base expands, the CEO said his company will steadily move down the cost curve. The CEO said, “Our five sanctioned developments offshore Guyana has very low breakeven prices of US$25 to US$35 per barrel Brent. In addition, by 2027 we forecast that our cash unit cost will decline by 25 percent to approximately US$10 per barrel of oil equivalent. And in terms of cash flow grow, we have an industry leading rate of change story and an industry leading duration story, providing a highly differentiated value proposition.”

He further noted that between 2022 and 2027, Hess’ cash flow is forecast to increase by approximately 25 percent annually, more than twice as fast as its production growth.

At June 30, 2023, Hess also noted that his company had US$2.2B in cash on its balance sheet and to manage all price volatility, it hedged approximately 130,000 barrels of oil per day in 2023. The CEO said, “This positions our shareholders to be protected on the downside while fully benefitting on the upside.”

In summary, the CEO said Hess which holds a 30 percent stake in the Stabroek Block is uniquely positioned to deliver increased cash to shareholders through regular dividend increases and share repurchases.

“As our portfolio becomes increasingly cash flow positive, you have our commitment that we will prioritize increasing cash returns to our shareholders,” the CEO concluded.