Hess Corp. said Friday it will spend more than one-third of its 2011 global capital budget on unconventional oil projects. Recent acquisitions have propelled the company to No. 2 in the Bakken Shale in North Dakota, and some Hess dollars will flow there this year.
Capital and exploratory spending is expected to be $5.6 billion, nearly all of which is targeted for exploration and production: $3.1 billion for production, $1.6 billion for developments and $900 million for exploration, the New York City-based producer said.
The company said it would spend about $3 billion in the United States, $1.125 billion in Europe, $450 million in Africa and $975 million in Asia and other areas.
"More than 35% of our capital and exploratory expenditures in 2011 are devoted to unconventional oil projects," said Greg Hill, president of exploration and production. "We have a balanced program that will underpin our long-term target of growing reserves and production by at least 3% per year."
Exploration expenditures are budgeted at $900 million, including conventional deepwater drilling in Egypt, Ghana, Indonesia and Brunei; and unconventional onshore drilling in the Eagle Ford Basin in Texas and the Paris Basin in France.
Production expenditures of approximately $3.1 billion include:
Field development expenditures of $1.6 billion include:
The company recently completed the acquisition of 167,000 net acres in the Bakken region from TRZ Energy LLC for $1.05 billion in cash (see Shale Daily, Dec. 30, 2010).
Hess said spending would be funded from cash flow.
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