Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
As Hess Corp. works to close a blockbuster sale to Chevron, Hess reported increased drilling activity and production in the Bakken during the fourth quarter.
Net production from the Bakken was 194,000 boe/d during the fourth quarter, Hess reported in earnings on Jan. 31.
That’s up 2% from average Bakken output of 190,000 boe/d during the third quarter of 2023—and up nearly 23% compared with 158,000 boe/d in the fourth quarter of 2022.
The year-over-year increase reflects increased drilling and completion activity in the Bakken and the effects of severe winter weather to close out 2022, Hess reported.
Fourth-quarter oil volumes from the Bakken averaged 89,000 bbl/d, up slightly from 87,000 bbl/d in the prior quarter and up 20% from 74,000 bbl/d in the year-ago period.
Hess operated four drilling rigs in the Bakken during the fourth quarter and the company plans to continue operating at a four-rig cadence in 2024.
In the fourth quarter, Hess drilled 33 new Bakken wells, completed 30 wells and brought 33 new wells online.
Company officials have repeatedly said Bakken production is expected to average 200,000 boe/d by 2025 before flatlining around that level for nearly a decade.
Those Bakken volumes should eventually lift Chevron Corp.’s total U.S. onshore production after the California-based major closes its $60 billion takeover of Hess Corp.
Chevron’s acquisition of Hess, announced last October, is expected to close in the first half of 2024.
Chevron boasts a sizable footprint in some of the Lower 48’s premier basins, including the Permian Basin and the Denver-Julesberg (D-J) Basin in the Rockies. But the Bakken will be a new area for Chevron.
As Chevron gets into the Bakken, it’s looking to get out of the Duvernay Shale play in Alberta.
Chevron announced plans earlier this month to market the company’s entire 70% working interest in its Duvernay Shale acreage—roughly 238,000 net acres, according to Houston-based Energy Advisors Group.
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Guyana glory
The Bakken gives Chevron some incremental production, but the Hess acquisition was mostly about buying exposure to Guyana—the world’s hottest offshore oil discovery.
Net production from Hess’ 30% interest in the Guyana Stabroek Block totaled 128,000 bbl/d during the fourth quarter.
In November, production commenced from the Prosperity FPSO project at Payara, which added 14,000 net bbl/d in the fourth quarter.
Hess participates in the 6.6 million-acre Stabroek Block with partners Exxon Mobil and CNOOC.
Hess also has a large offshore footprint in the Gulf of Mexico, where net production was 30,000 boe/d during the fourth quarter.
