The Bakken Shale, Hess Corp.’s “principal engine of growth.” averaged 65,000 boe/d in the first three months of this year, an increase of 55% from a year ago, the CEO told investors on Wednesday.

On a conference call to discuss quarterly performance John Hess said he was “gratified” by the three-month results, in which the operator has worked to become a pure-play exploration and production (E&P) operator by selling its refining arm and attempted to bar the door from an activist shareholder seeking more leverage in the company.

“We are making substantial progress toward our goal of becoming a pure-play E&P company,” said Hess. “However, there is still much to do. With the commitment of our people and their focus, we are confident that we will continue to successfully execute our program and deliver value to our shareholders.”

The Bakken, the big driver, is expected to see output average “between 64,000-70,000 boe/d” this year, said the CEO. Well costs also are coming down, with 1Q2013 costs averaging $8.6 billion, down 36% from a year ago and from $9 million in 4Q2012, “a continuation of a steady downward trend since the beginning of 2012.”

E&P chief Gregory Hill said the company has reached agreement to sell interests in many of its overseas operations, as well as the Eagle Ford Shale.

With the sales, Hess has about $500 million to reallocate to “higher return opportunities in our portfolio. Following these divestitures, roughly 80% of our remaining reserves in production will be confined to five principal geographical areas,” with three in the United States: the Bakken and Utica shales, and the Gulf of Mexico’s Tubular Bells field. “This balanced strategy underpins our forecast of 5-8% compound average annual growth in production.

From its unconventional fields, Hess has a “mid-decade goal of achieving net production of 120,000 boe/d from the Bakken,” which is on track, said Hill.

“As a result of our transition to pad drilling, production will be relatively flat through May as we continue to build the inventory of drilled, but not completed wells. But production will increase substantially in the second half of 2013 as we ramp up our completion activity.”

In the first three months of this year, 30 Bakken wells began producing, with 21 in the Middle Bakken and nine in the Three Forks formation. For the full year, “we expect to bring approximately 175 wells on production with two-thirds targeting the Middle Bakken and one-third targeting the Three Forks,” said Hill.

The Hess Tioga rail facility “ran at capacity in the first quarter, delivering an average of 53,000 b/d to higher-value markets. Our Tioga Gas Plant expansion project is on schedule to be commissioned at the end of 2013, which will enable us to capture more value from our own gas and third-party volumes.”

The Utica Shale appraisal continues with four wells drilled, seven completed and five flow tested in 1Q2013.

In its 100%-owned leasehold, the Capstone 2H9 well in Belmont County, OH, tested at a rate of 2,242 boe/d, 42% liquids; and the NAC 4H-20 well in Jefferson County, OH, tested at a rate of 7.5 MMcf/d of dry gas, said Hill. “On our joint venture acreage, we tested the Jeffco 1H-6 well in Harrison County at a rate of 1,432 boe/d, including 20% liquids…

“Although still very early days in the appraisal phase, these well results are encouraging.” This year Hess and partner Consol Energy ” plan to drill approximately 30 wells,” said Hill.

The New York City-based operator said net income doubled in 1Q2013 from a year ago on gains from asset sales. Profits totaled $1.28 billion ($3.72/share) from $545 million ($1.60). Total revenue jumped 39% to $4.12 billion. On asset sales, production was down 2% year/year to 389,000 boe/d.