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Page added on December 13, 2018

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Hess Corp sees oil output growing 10 percent per year through 2025

Hess Corp sees oil output growing 10 percent per year through 2025 thumbnail

Hess Corp said on Wednesday it expects oil and gas output to grow more than 10 percent a year compounded through 2025, touting development of its Bakken shale and offshore Guyana projects.

Pumpjacks taken out of production temporarily stand idle at a Hess site

The company projects higher margins will drive compound annual cash flow growth of 20 percent through 2025, it said ahead of a meeting with Wall Street investors.

Hess shrugged off a recent dip in oil prices and said it was moving from growth and investment mode to where its major assets will start producing free cash flow. “We are at a transformative inflection point,” Chief Executive John Hess said during the investor meeting, broadcast over the internet.

Hess boosted the production forecast for its Bakken shale field in North Dakota to 200,000 barrels of oil equivalent per day (boepd) by 2021, from 175,000 boepd. The shale acreage, the jewel in the crown of the company’s onshore production, will produce $5 billion in free cash flow between 2019 and 2025.

Hess expects the first production from the offshore Guyana discovery to be tapped in 2020, and said the region had the potential to produce more than 750,000 boepd by 2025. Hess is working with Exxon Mobil Corp on fields projected to hold up to 5 billion barrels of recoverable oil and gas.

Guyana through 2025 will generate $4 billion free cash flow for Hess, said Greg Hill, president and chief operating officer.

The New York-based company earlier this week set a 2019 capital budget of $2.9 billion, up 38 percent from this year’s projected spending plan. The budget reflects “peak” spending for the first phase of offshore Guyana oil discoveries.

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Hess plans to keep capital spending flat around $3 billion annually through 2025 and will be able to return money to shareholders in, “any type of price environment,” said Chief Financial Officer John Rielly.

Investors for a year have pressured oil and gas producers to rein in spending and instead focus on profits. Companies are starting to disclose their 2019 budgets, which generally are released in December and January.

Hess will complete a $1.5 billion share repurchase program by the end of the year. It does not plan additional share buybacks now, but if profits exceed expectations, a “priority would be more share buybacks,” Hess said.

Hess stock was down a fraction at $51.74 a share on Wednesday. The stock is up about 12 percent year to date.

Reuters



5 Comments on "Hess Corp sees oil output growing 10 percent per year through 2025"

  1. Anonymous on Thu, 13th Dec 2018 11:17 am 

    1. Hess uses a $60 WTI price expectation but the strip is $52-53. This impacts their cash flow directly on margin and also possibly volume decisions in the Bakken to slow down slightly (Guyana will progress regardless).

    2. Hess has seemed to underperform versus peers in the past and has a bit of a family company operating in public attitude. Market is skeptical of them and will wait for results.

    3. Lately they have been doing a little better, especially in the Bakken. But still…wait and see. The 10% growth CAGR is just PR. Nobody knows what will happen 7 years from now.

  2. Cloggie on Thu, 13th Dec 2018 3:05 pm 

    Peak oil, the best practical joke of the century.
    Jeez have we been fooled, OMG!
    “The end of industrial civilization”, priceless!

    https://goo.gl/images/RS8Ays

    The party is over?

    Well, certainly not for Heinberg, that old crook! LOL

    He is laughing all the way to the bank.
    Granted Heiny, you fooled us all.

  3. JuanP on Sun, 30th Aug 2015 5:40 am on Thu, 13th Dec 2018 6:49 pm 

    …then you simply have a higher opinion of humans than I do. But what can I do? I am after all an admitted antisocial misanthrope. I just think most people suck!

  4. CHINK LOVER on Fri, 14th Dec 2018 8:35 am 

    SUCK MY CHINK DICK YOU FUCKING NIGGERS

  5. Harquebus on Fri, 14th Dec 2018 4:03 pm 

    “Hess Corp said on Wednesday it expects oil and gas output to grow more than 10 percent a year compounded through 2025”
    70/10%growth = 7 years to double production.

    “higher margins will drive compound annual cash flow growth of 20 percent through 2025”
    70/20%growth = 3.5 years to double profit. Quadruple by 2025.

    Yeah right!

    Knowing how many times a growing entity can double and long that takes gives a pretty good idea of how long it will last.

    “The greatest shortcoming of the human race is our inability to understand the exponential function.” — Prof. Albert Bartlett

    Attention moderator:
    Deleting slurs like CHINK LOVER’S above which, have nothing at all to do with the article is not censorship.
    The abusive arguments that appear here are, in my opinion, a waste of space and of my time. I am getting sick of it and if it continues, I will not be bothering with this site at all.
    Please clean this place up and take out the trash.

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