By Kiana Wilburg
CEO, Guyana Energy Conference and Supply Chain Expo
American oil producer, Hess Corporation, which holds a 30 percent working interest in Guyana’s Stabroek block, reported huge earnings for the second quarter of 2024, totalling US$757 million. This is a significant boost in earnings when compared with the net income of US$119 million in the same period last year.
Hess was keen to note that its commendable performance was due to higher production volumes across its portfolio and higher selling prices in the second quarter of 2024.
With respect to production, Hess told the market on Wednesday morning that its net production was 494,000 barrels of oil equivalent per day (boepd) in the second quarter of 2024, compared with 387,000 boepd in the second quarter of 2023. It said this was “primarily due to higher production in Guyana and the Bakken.”
In the third quarter of 2024, Hess said net production is expected to dip, landing in the range of 460,000 boepd to 470,000 boepd, primarily reflecting planned downtime for its assets in Guyana and Southeast Asia.
Turning to market prices, Hess said the average realized crude oil selling price was US$80.29 per barrel in the second quarter of 2024, compared with US$71.13 per barrel, including the effect of hedging, in the prior-year quarter.
The average realized natural gas liquids (NGL) selling price in the second quarter of 2024 was US$20.07 per barrel, compared with US$17.95 per barrel in the prior-year quarter.
For operational highlights, Hess noted that net production from its USA asset in the Bakken, was 212,000 boepd in the second quarter of 2024, compared with 181,000 boepd in the prior-year quarter, primarily reflecting increased drilling and completion activity.
Bakken net production is forecast to be in the range of 200,000 boepd to 205,000 boepd in the third quarter of 2024.
At the Stabroek Block where Hess has a 30 percent working interest, Hess said net production totaled 192,0002 bopd in the second quarter of 2024, compared with 110,0002 bopd in the prior-year quarter. In the second quarter of 2024, 14 cargos of crude oil were sold from Guyana, compared with nine cargos in the prior-year quarter. In the third quarter of 2024, 14 cargos of crude oil are expected to be sold.
Regarding the third development on the Stabroek block, Payara, which commenced production in November 2023, Hess informed its shareholders that it reached its initial production capacity of approximately 220,000 gross bopd in January 2024. Oil output is now in excess of 250,000 bpd as of July, 2024.
Overall, Hess said its net production from Guyana in the third quarter of 2024 is forecast to be in the range of 170,000 bopd to 175,000 bopd.
With respect to the fourth development on the Stabroek block, Yellowtail, it was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in 2025.
The fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd and first production expected in 2026.
The sixth development, Whiptail, was sanctioned in April 2024 and is expected to add production capacity of approximately 250,000 gross bopd by the end of 2027.
The application for the environmental permit for the seventh development, Hammerhead, has been filed with Guyana’s Environmental Protection Agency by Stabroek Block operator, ExxonMobil. Pending government and regulatory approval and project sanctioning, the development is expected to have a production capacity in the range of 120,000 gross bopd to 180,000 gross bopd with first oil anticipated in 2029.