With mixed results in its overseas plays, Hess Corp. senior executives are focusing on continuing strong results in North Dakota’s Bakken Shale.
Bakken production reached 140,000 boe/d in the second quarter, up 23% from the year-ago period. CEO John Hess said the company expects Bakken production to reach the 200,000 boe/d level by 2021. COO Greg Hill indicated Hess still has six rigs operating in the Bakken, and it intends to keep that many in the field through next year before lowering the number to four in 2021.
Overall, second quarter production was 273,000 boe/d, up from 247,000 boe/d in 2Q2018. The company increased its full-year guidance to 275,000-280,000 boe/d, while Bakken guidance was also increased to 140,000-145,000 boe/d. Capital expenditures are also expected to fall to $2.8 billion this year from the previous estimate of $2.9 billion.
The CEO said the Bakken holdings are a "premier acreage position with robust inventory in high-return locations" and overall these assets "are doing very well." As operations move outside the core areas, well spacing could be tightened.
Hill said Hess has no plans to shut in wells. "A lot of what we have is associated gas, and the Bakken gas is three times as rich in natural gas liquids (NGL) than other basins, so we're in a pretty good position even though gas and NGL prices are down."
The company is also in a relatively strong position compared to other Bakken operators regarding natural gas flaring. "We are well within the latest regulatory requirements," Hill said. "Flaring is not a problem for us."
In North Dakota, some of the same questions for operators are ongoing as they attempt to curtail flaring volumes and still maintain the Bakken's robust oil production. North Dakota Pipeline Authority director Justin Kringstad earlier in July said midstream processing and pipeline capacity should match production in the early 2020s as several projects are under development, but for now the shortfall continues.
For 2Q2019, Hess reported a net loss of $6 million (minus 2 cents/share), compared with a net loss of $130 million (minus 8 cents) a year ago.