Hess Corporation has reported net income of US$ 931 million for the second quarter of 2014.
Adjusted net income for the quarter was US$ 432 million, compared with US$ 520 million in the prior year quarter. The decrease was primarily due to the impact on operating earnings of divesting E&P assets and downstream businesses.
- Net income of US$ 931 million.
- Adjusted net income of US$ 432 million.
- Oil and gas production was 319,000 boepd, compared with 341,000 boepd in Q2 2013.
- Cash flow from operations of US$ 1.3 billion.
- Oil and gas production in the Bakken increased 25% from the year-ago quarter to 80.000 boepd, while well costs were reduced by 12% to an average of US$ 7.4 million per operated well.
- Completed asset sales totaling US$ 1.6 billion comprising approximately US$ 805 million for Thailand assets, US$ 485 million for Utica shale gas play, and US$ 320 million for the New Jersey power plant.
- Announced the sale of its retail business of US$ 2.9 billion.
- Returned an additional US$ 845 million to shareholders during the quarter through share repurchases and dividends.
Commenting on the results, company CEO, John Hess, said: “This was another quarter of strong performance and execution of our strategic plan. We continued to grow production and reduce well costs in the Bakken, progressed development of Tubular Bells in the Gulf of Mexico and North Malay Basin in the Gulf of Thailand, and completed asset sales totaling US$ 1.6 billion.
“We are excited by the potential of our portfolio and confident that we have the strategy, operational capabilities and financial flexibility to deliver 5 – 8% annual production growth and generate free cash flow and strong, sustainable returns for our shareholders.”
Production from the Bakken increased 25% from the prior year quarter to 80,000 boepd, due to continued development activities and the completion of the Tioga gas plant expansion project. Hess brought 53 gross operated wells on production in the quarter, bring the year-to-date total to 83 wells.
On Hess’ joint venture acreage, ten wells were drilled in the second quarter of 2014. In addition, Hess completed the sale of 30,000 acres, including related wells and facilities in the dry gas area of the play, for a total of US$ 485 million. This brings the total year-to-date proceeds from asset sales in the Utica shale play to approximately US$ 1.1 billion.
Net production averaged 31,000 boepd during the second quarter, compared with 13,000 boepd in the year-ago quarter. These results reflect completion of the Valhall Redevelopment Project in 2013, ongoing drilling and higher uptimes. Offshore work began in June on the Crestal Gas Lift Project, with hook-up and commissioning expected in Q2 2015.
Production averaged 7000 boepd in the second quarter of 2014 from the Early Production System. Progress continued on the full field development project in the second quarter with Hess signing the gas sales agreement with the Malaysian government and awarding a contract for the construction and installation of a central processing platform, a bridge-linked wellhead platform and three remote wellhead platforms.
Hess commenced drilling of a three well appraisal program in the second quarter of 2014. The first well in the program, Pecan 2A, was completed in June and the second well in the program, Pecan 3A, was also drilled and is currently undergoing production testing as planned. The third well in the program is expected to be drilled in Q3.
The offshore hook-up and final commissioning activities continued in the second quarter and first oil from the field is expected in September 2014. The drilling of a fourth production well also commenced in the second quarter.
During the second quarter, Hess received US government approval to unitize Blocks 468, 512, and the eastern half of 511. The Stampede development project continues to progress, and project sanction is expected later this year.
Image courtesy of Hess Corporation.
Adapted from press release by Katie Woodward
Read the article online at: https://www.oilfieldtechnology.com/exploration/31072014/hess-q2-2014-results-1176/