Hess Corp. saw net production from its acreage in the Bakken Shale increase to 194,000 boe/d in the second quarter compared with 140,000 boe/d in the prior-year quarter, with net oil output up 26% to 108,000 b/d.

The New York City-based independent attributed the performance to increased wells online and improved well performance. Total second quarter production from the Bakken came in above initial guidance of 185,000 boe/d.

Meanwhile, Hess reduced its Bakken rig count in the Bakken from six to one.

“Operating one rig allows us to maintain key operating capabilities that we have worked hard to build over the years both within Hess and among our primary drilling and completion contractors,” CFO Gregory Hill said during an earnings call. 

More quarterly earnings coverage by NGI can be found here.

The company reduced its capital and exploratory budget for 2020 by 37% to $1.9 billion, the “majority of which” was accounted for by the reduced Bakken rig count.

Executives also reaffirmed their commitment to their assets offshore Guayana during the call, where 16 “significant” discoveries since 2015 have been made on the Stabroek Block with partner ExxonMobil, which operates the block.

“In terms of preserving the long-term value of our assets, our top priority is Guyana, an extraordinary world-class asset,” CEO John Hess said. “The current estimate of gross discovered recoverable resources for the block stands at more than 8 billion boe, with multi-billion barrels of exploration remaining.”

In June, Hess resumed a four-rig drilling operation on the block with two rigs focused on development wells and two on exploration and appraisal activities.

Total oil and gas production during 2Q2020, excluding Libya, averaged 334,000 boe/d, up from 273,000 boe/d in the second quarter of 2019.

The CEO said crude oil put option contracts are in place for more than 80% of forecast net oil production in the second half of 2020, with a fair value of about $450 million at the end of June Realized settlements on oil put option contracts during the first half of the year were about $500 million.

During the second quarter, capital and exploratory expenditures were $453 million, compared with $664 million a year ago.

Net production guidance for 2020, excluding Libya, increased to about 330,000 boe/d, up from the previous guidance of 320,000 boe/d.

Bakken net production guidance has increased to 185,000 boe/d from the previous guidance of 175,000 boe/d. Executives credited the stronger Bakken output to the year-to-date performance and the deferral of a planned maintenance turnaround at the Tioga Gas Plant that began this month and continues until 2021.

Hess reported a net loss of $320 million (minus $1.05/share), compared with a net loss of $6 million (minus 2 cents) in the second quarter of 2019.