Hess Reduces 2020 Capital and Exploratory Budget
[Click image to enlarge]
Hess Corporation has released a revised $2.2 billion capital and exploratory budget for 2020, an $800 million reduction from the previous budget of $3.0 billion. The company also entered into a new $1.0 billion three year term loan agreement. These actions further strengthen the company’s cash position and financial liquidity in response to the sharp decline in oil prices.
“With 80 percent of our oil production hedged in 2020, our significantly reduced capital and exploratory budget and our new three year loan agreement, our company is well positioned for this low price environment. Our focus is on preserving cash and protecting our world class investment opportunity in Guyana,” CEO John Hess said.
The reductions to the company’s 2020 capital budget will be primarily achieved by shifting from a six rig program to one rig in the Bakken, which is expected to be completed by the end of May. Most discretionary exploration and offshore drilling activities, excluding Guyana, will also be deferred.
In 2020, approximately 80 percent of the company’s oil production is hedged by put options, with 130,000 barrels a day at $55 per barrel West Texas Intermediate put options and 20,000 barrels a day at $60 per barrel Brent put options. In addition, the company entered 2020 with more than $1.5 billion in cash and cash equivalents on its balance sheet and has a $3.5 billion undrawn revolving credit facility and no material debt maturities until 2027.
Net production for 2020 is now forecast to average between 325,000 and 330,000 barrels of oil equivalent per day, excluding Libya, versus previous guidance of between 330,000 and 335,000 barrels of oil equivalent per day. The company’s Bakken net production is forecast to average approximately 175,000 barrels of oil equivalent per day in 2020, versus previous guidance of approximately 180,000 barrels of oil equivalent per day.
About Hess Corporation
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas.
To stop by Hess’ website, CLICK HERE
Be in-the-know when you’re on-the-go!
FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.
Copyright © 2020 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
For licensing permission, .(JavaScript must be enabled to view this email address)
