Hess Corporation Details the Boost from Guyana Oil Discovery
July 11, 2019 – Georgetown, Guyana – Hess Corporation leverages Guyana oil discovery to drive down the company’s cost structure and improve profitability outlook in the long term.
In discoveries of the size and significance of Guyana, the larger players take the lead and benefit the most visibly. The financial benefit of such a discovery to a company like ExxonMobil is obvious. Less obvious are the benefits to smaller players.
Hess Corporation is a small, yet global independent energy company headquartered out of New York. For Hess, the Stabroek discovery has been a financial game changer. The impact of the Guyana participation with ExxonMobil was detailed in a recent presentation to the investment community.
Smaller energy companies such as Hess often have portfolios biased to mature fields. While these produce steady cash flow, they offer very limited opportunities to increase reserves, for growth, the things that attract investors.
When an opportunity such as Guyana’s comes along, it has the potential to change the finances, and therefore the future of a company. The costs of deepwater development have significantly declined over the years, making the Stabroek block highly profitable, with its high-quality oil-bearing sandstone reservoirs.
Oil production at such a low cost will automatically lower the entire Hess corporate average production cost structure due to the sheer volume coming online offshore Guyana over the next several years.
The Hess Corporation presentation at the Bernstein Strategic Decisions Conference on May 29, 2019 provided evidence the contribution the Stabroek discovery will have on the company’s financial performance. As the unconventional reservoir Bakken field in the Hess portfolio continues to require continuous drilling and completion, the Liza, Hammerhead, Turbot, Tilapia and 9 other discovery wells offshore Guyana will continue to increase in production value with no intervention costs anticipated.
For Hess, the long-term impact on the overall corporation of the discovery in Guyana is clear. For Guyana, it remains to be seen what the long-term participation of non-operating partners such as Hess Corporation will be in the country’s future.
http://phx.corporate-ir.net/phoenix.zhtml?c=101801&p=irol-newsArticle&ID=2399589 for a replay, https://seekingalpha.com/article/4272838-hess-corporation-big-guyana-discoveries-turn-tide for an in depth article, or search Google images using Bernstein Strategic Decisions Conference Hess.
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