Latest update December 4th, 2024 2:40 AM
Hess praises Guyana for helping it bank US$504M in profits for 2023 third quarter
– Reveals Liza Destiny suffered mechanical issues
Kaieteur News – American oil explorer, Hess Corporation which holds a 30 percent stake in the Stabroek Block reported on Wednesday that it banked US$504 million in profits, or US$1.64 per share, in the third quarter of 2023.
This represents a decline when compared with net income of US$515 million, or US$1.67 per share, in the third quarter of 2022. On an adjusted basis, the corporation reported net income of US$583 million, or US$1.89 per share, in the third quarter of 2022. Hess said the decrease in adjusted after-tax results compared with the prior-year quarter reflects lower realized selling prices, partially offset by the net impact of higher production volumes, in the third quarter of 2023.
Turning to its operational highlights, Hess said net production was 395,000 barrels of oil equivalent per day (boepd) in the third quarter of 2023, compared with 351,000 boepd in the third quarter of 2022. Hess said this was primarily due to higher production in the Bakken (USA), Guyana, and Southeast Asia.
At the ExxonMobil –operated Stabroek Block, Hess said net production from the Liza Destiny and the Liza Unity vessels totaled 108,0002 bopd in the third quarter of 2023, compared with 98,0002 bopd in the prior-year quarter. In the third quarter of 2023, Hess said it sold nine cargos of crude oil from Guyana, compared with eight cargos in the prior-year quarter.
Hess Corporation CEO, John Hess
During the third quarter of 2023, the company revealed a mechanical issue on the Liza Destiny floating, production, storage and offloading (FPSO) vessel reduced production during that reporting period. Hess revealed that repairs were completed by the operator in October that resolved the issue, and production is currently in the range of 150,000 gross bopd to 160,000 gross bopd.
Hess also noted that the successful Lancetfish-2 appraisal well in the Stabroek Block encountered approximately 125 feet of net oil pay in appraisal reservoirs and approximately 65 feet of net oil pay in a new discovery interval. The well was drilled in 5,649 feet of water and is located approximately 4 miles southeast of the Lancetfish-1 discovery well.
Speaking to other Stabroek Block Projects, Hess reminded that the third development, Payara, with a production capacity of approximately 220,000 gross bopd, will start up in the fourth quarter. The fourth development, Yellowtail, was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in 2025.
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. The operator also submitted the field development plan for the sixth development, Whiptail, to the Government of Guyana in October.
Due to the pending merger with Chevron Corporation, Hess did not host a conference call to review its third quarter 2023 results.
It was on Monday that Chevron announced that it will be buying out all the outstanding shares at Hess Corporation for US$53 billion, or US$171 per share.
Under the terms of the agreement set to take full effect in the first quarter of 2024, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. Taking this and other financial arrangements to follow, the full value of the transaction is US$60 billion.
Significantly, Chevron’s acquisition of Hess will give it exclusive control over a grand prize—30 percent of the working interest in Guyana’s Stabroek Block where over 11 billion barrels of oil resources have been unlocked. In that deepwater block which stretches a massive 6.6 million acres, ExxonMobil is the operator with a 45 percent working interest while China National Offshore Oil Corporation (CNOOC) holds 25 percent.
Since oil production commenced in December 2019 at the Stabroek Block’s Liza Phase One Project, Exxon successfully started another, the Liza Phase Two, in February 2022. Both projects are producing about 400,000 barrels of oil per day. Exxon and partners are also targeting over 1.2 million barrels of oil by 2027, making Guyana’s Stabroek Block, one of the world’s fastest-ever oil development hotspots.
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