Hess Accelerates Plan for Fourth North Dakota Shale Rig
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Oil and gas producer Hess Corp expects to add a fourth rig in Bakken shale of North Dakota next month, Chief Executive John Hess said on Thursday, a sign that operators are inching towards greater output increases amid sky-high oil prices.
The company had previously said it was strongly considering adding the rig before the end of the year, moving up a original goal of adding a fourth Bakken rig next year. It had not specified when it planned to add the fourth rig this year.
The move comes as publicly-traded shale producers have held off spending on new oil production in response to shareholder demands to focus new cash from operations on improving returns. The industry has been criticized in the past for overspending on new production.
Hess has increased its planned exploratory expenditure budget for this year to $2.8 billion from $2.6 billion. The additional rig accounts for $100 million of the increase, while inflation is driving the other $100 million, CEO Hess said.
The company anticipates the additional rig would take its Bakken production to 200,000 barrels per day of oil equivalent by 2024, on par with its pre-pandemic output. It expects to hold Bakken production at that level until the end of the decade without adding a fifth rig, Hess said.
Source: Reuters
About Hess
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas.
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