Hess Corp. officials said last week that although production fell in 2011 and it suffered a net earnings loss in the final quarter, they are confident 2012 will be a better year as they move forward with promising development in North America’s onshore and the deepwater Gulf of Mexico (GOM).
“Our financial position remains strong,” CEO John Hess told financial analysts last Wednesday. “2011 was a difficult year operationally, but important strategically.”
Hess lost $131 million (minus 39 cents/share) in 4Q2011, compared with net profit of $58 million (18 cents) in the year-ago period. Production last year averaged 367,000 boe/d, an 11% decrease from the 420,000 boe/d in 2010. The CEO attributed most of last year’s production issues to short-term setbacks — including the temporary shut-in of the Llano 3 well in the deepwater GOM and some problems overseas — but predicted crude oil and natural gas production would rebound to average 370,000-390,000 boe/d during 2012.
Greg Hill, president for worldwide exploration and production, said Hess was making progress in the Tubular Bells deepwater field in the GOM, which the company operates with a 57.14% working interest. Chevron U.S.A. Inc. holds the remaining 42.86% interest (see NGI, Oct. 31, 2011).
“Facilities construction is under way, and drilling is planned to commence in mid-2012,” Hill said. “First production is planned in 2014, with a peak annual net rate of about 25,000 boe/d.” The company also is moving forward with several Miocene prospects in the GOM, bringing them to drill-ready status.
During the question-and-answer session with analysts, Hill characterized the company’s deepwater GOM program as prospect-dependent. “We’re going to go wherever we think the most profitable opportunities are to add reserves and production,” Hill said.
Pittsburgh-based EQT Corp., which earlier this month suspended drilling in the Huron Shale, last week said its annual production rose by more than 44% last year to 194.4 Bcfe. Natural gas proved reserves totaled 5,365 Bcfe, a net increase of 145 Bcfe from 2010. Of the 2011 total, 3,414 Bcfe was in the Marcellus and 1,062 Bcfe in the Huron; proved reserves in the two plays have increased to about 5.4 Tcfe. The Marcellus Shale accounted for 42% of the company’s total output last year, up from almost 19% in 2010.
EQT drilled 222 gross wells during 2011; 105 targeted the Marcellus and 155 were drilled in the Huron. The companyreduced its forecast for production volumes this year by 5 Bcfe — to between 250 and 255 Bcfe — after it suspended drilling in the Huron Shale because of low natural gas prices. The company classifies its assets in the Lower Huron, Cleveland, Berea sandstone and other Devonian shales — except the Marcellus — as the Huron play.
Asked if the company was also considering dropping a drilling rig in the Marcellus Sale because of the low prices, CEO David Porges indicated that wouldn’t happen, for now.
“It still makes a fair amount of sense to continue with our approach in the Marcellus,” Porges said. “So far what we’ve seen wouldn’t cause us to make those alterations and drop a rig.”
EQT posted net income of $90.8 million (60 cents/share) during 4Q2011, a 24% increase from the $73.1 million (49 cents/share) earned during 4Q2010. Operating income was $172.8 million during 4Q2011, up 28% from the $134.6 million from the same quarter one year earlier. Earnings for the year totaled $479.8 million.
©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |