Hess Expects $2.6B Budget for 2016
Hess Corporation Lowers Budget Guidance for 2016
Hess Corporation (NYSE: HES) ended 2015 with E&P capital and exploratory expenditures of just over $4 billion with $1.6 billion being spend on onshore U.S. activity. Onshore U.S. spending was down 36.4% from the previous year. The chart below shows the companies permit and completion activity in the Bakken over the last 2 years.
Bakken Completions Increase Number of Stages
- Hess averaged 8 rigs during 2015 starting the year with 12 and dropping that number to 7 for the second half of the year
- As expected drilling and completion activity weakened in 2015
- Number of wells drilled, 2014– 261, 2015 – 182
- Number of wells completed: 2014– 230, 2015– 212
- Increased number of stages per well from an average of 34 in 2014 to 37 in 2015
- D&C costs down to an average of $5.8 million from $7.3 million last year (drilling costs down 19% and completion costs down 23%)
- The number of wells brought onto production during the fourth quarter (34 wells) decreased by over 50% since the first quarter of the year and ~64% from the same quarter in 2014
D&C Costs Drop by 30% in the Utica
- Production averaged 24 MBoepd in 2015 up from 9 MBoepd in 2014
- Rig counts decreased from 2 in the first half of the year to only one in the last to quarters
- Drilling and completion activity declined in 2015
- Number of wells drilled: 2014 – 38, 2015 – 24
- Number of wells completed: 2014 – 36, 2015– 32
- Drilling and completion costs decrease by 30% to an average of $9.6 million per well
What’s Next for Hess? Continued Bakken Focus
- Announced $2.4 billion budget for 2016
- 40% below 2015 actual spend of $4 billion
- 20% below initial guidance of $2.9 to $3.1 billion
- Bakken outlook: 2 rigs will be running with 80 wells brought online
- Utica outlook: 1 rig until the 5 planned wells are drilled then it will be released and bring 14 wells onto production
Read more operator profiles – Midstates Petroleum, EOG Resources, and Continental Resources.
Find out how Energent Group’s Operator Briefings can help you target strategic accounts to stay ahead of your competition. Contact us to get more information and samples.