Hess Trims 2009 Capital Budget by 27%,Targets $3.1B for E&P

Hess has announced a $3.2 billion capital and exploratory expenditure program for 2009. Approximately $3.1 billion is targeted for Exploration and Production, with $1.4 billion for production, $900 million for developments and $800 million for exploration.

John B. Hess, Chairman and CEO, stated, "Our company has excellent investment opportunities. However, the uncertain economic environment has prompted us to size our 2009 capital and exploratory program in a way that maintains our financial strength and protects our growth options."

John O'Connor, President of Worldwide Exploration and Production, said, "We are committed to our strategy of delivering long-term sustainable growth in reserves and production. We will invest prudently and live within our means. We have retained flexibility in our program to adjust spending as market conditions warrant."

Production expenditures are expected to total $1.4 billion, including:

  • Shenzi Field in Deepwater Gulf of Mexico (Hess 28% working interest). Start up is expected in the first half of 2009 with additional production wells in the second half of 2009.
  • Okume Complex, a Hess operated offshore oil field in Equatorial Guinea (Hess 85%). The company will drill additional production and water injection wells.
  • Bakken Shale in North Dakota's Williston Basin. Hess will continue to drill production wells and expand production facilities.

Field development expenditures of $900 million are expected to include:

  • Valhall Field in Norway (Hess 28%). Redevelopment of the field is ongoing.
  • Pony Field, a Hess operated discovery in the deepwater Gulf of Mexico (Hess 100%). Activities will include the drilling of the Pony #3 well on Green Canyon Block 469 to confirm the eastern extent of the field as well as FEED work.
  • Ujung Pangkah Field, a Hess operated oil and gas field in Indonesia (Hess 75%). Development of the oil rim is ongoing.

Exploration and exploitation expenditures are budgeted to be about $800 million, including:

  • Azulao and Guarani exploration wells on BM-S-22 in the Santos Basin of Brazil (Hess 40%).
  • Lencois exploration well on Hess operated BM-ES-30 in the Espirito Santo Basin of Brazil (Hess 60%).
  • Five exploration wells on Permit WA-390-P (Hess 100%) and three wells on Permit WA-404-P (Hess 50%), in the Northwest Shelf of Australia.