Hess is setting aside US $ 70M for unannounced Stabroek Block developments

Hess CEO John Hess.
Kaieteur News – The owner of Stabroek Block Division, Hess Corporation, has set aside US $ 70 million of its 2021 exploration and production capital and its US $ 1.9 billion exploration budget to fund unannounced future development periods.
In a statement on Monday, Hess said the money was ring-fenced “primarily for front-end engineering and design work for future development phases on the Stabroek Block.”
Last September, even before colleagues – ExxonMobil, Hess and CNOOC – received approval for the Payara development, they were so assured of quick approval for their efforts under the Production Sharing Agreement (PSA), that a Chief Executive (CEO) Hess John Hess said partners were already fairly optimistic that the discovery of Yellowtail-1 would support the fourth development.
ExxonMobil announced the discovery of Yellowtail-1 in April 2019. Tom Madden’s Noble drill encountered approximately 292 feet (89 meters) of high-quality oil-bearing sandstone reservoir and drilled to a depth of 18,445 feet (5,622 meters) in 6,046 feet. (1,843 meters) of water. The well, Exxon says, is located about 6 miles (10 kilometers) northwest of the Tilapia discovery.
Subsequent appraisal drilling led to Westwood Global Energy’s assessment of more than 300 million barrels of oil-equivalent resources at the well.
Hess had said that partners were looking at developing a Yellow Tail as it is a large resource that contains lighter crude. “… We are doing the pre-development work now to make the fourth ship…”
The ship is likely to have a production capacity of 220,000 barrels per day. This would take production capacity in the Stabroek block to 780,000 barrels of oil per day, once Yellowtail-1 follows first oil in Phase Two Liza and Payara.
ALLOCATION OF OTHER BUDGET TO GUYANA
The jewel in the crown of Exxon, Guyana’s investments make up the majority of Hess’s 2021 budget.
“Our capital program reflects our disciplined approach in the current oil price environment to hold cash, core capabilities and the long-term value of our assets,” CEO John Hess said on Monday. “The majority of our 2021 budget is allocated to Guyana, where our three approved oil developments have a Brent cost recovery oil price of between $ 25 and $ 35 a barrel… By investing in high-cost, low-cost opportunities only, we have build a differentiated portfolio of assets that we believe will deliver industry leading cash flow growth over the decade. ”
CEO Greg Hill said: “Offshore Guyana, our focus in 2021 will be on advancing our next two approved first oil developments – Liza Phase 2 in early 2022 and Payara in 2024 – and engineering work and front-end design for future phases of development on the Stabroek Block. We will also continue to invest in an active audit and evaluation program, with 12-15 wells planned on the Stabroek Block. “
Of its development funding for 2021, the company has plugged US $ 25 million into its Liza Phase One development which has been in production since December, as well as US $ 450 million and US $ 235 million for the upcoming Liza Phase Two and Payara developments.
From its audit and appraisal budget, the majority of $ 450 million has been allocated to drilling 12-15 exploration and evaluation wells on the Stabroek Block in Guyana, and some seismic acquisition and processing.
Hess has a 30 percent stake in the Stabroek block, along with ExxonMobil (Operator – 45 percent) and CNOOC (25 percent).