Selling more in-house assets to focus on the “crown jewel” in Guyana
Kaieteur News – An American oil explorer and producer, Hess Corporation, announced yesterday that it had entered into an agreement to effectively sell its Canadian Knights and Murphy Creek acreage interests in Bakken, North Dakota, to US energy giant giant Enerplus Corporation for US $ 312 million March 1, 2021.
Once the deal is closed, the cash injection will help the company remain focused on the Stabroek Block, the “crown jewel” in its portfolio of assets. In the Stabroek Block, Hess holds a 30 percent working interest, while CNOOC / NEXEN holds 25 percent. ExxonMobil has the remaining stake, thus making it an Executive.
The CEO of Hess Corporation, John Hess.
Hess noted that the sale to the Canadian company includes approximately 78,700 net acres, which is located in the southernmost part of its Bakken site and is not connected to its Midstream infrastructure. He further noted that net production of this acreage averaged 4,500 barrels of oil equivalent per day in the first quarter of 2021.
Following yesterday’s announcement, Hess CEO John Hess noted that Bakken is a core asset in the company’s portfolio, adding that “the sale of Little Knife and Murphy Creek acres – which most of us didn’t intend to drill before 2026 – was bring forward material value and further strengthen our cash and liquidity position. ”
The sale is expected to close in May 2021, subject to normal closing conditions.
Last month, Kaieteur News would have reported that Hess had entered into an agreement with another company, Ineos Exploration and Production Company, to sell its subsidiary, Hess Denmark ApS, which has a 61.5% interest in South Arne Field. The asset was sold for a total consideration of US $ 150 million, effective January 1, 2021. The sale is expected to close in the third quarter of 2021, subject to government approval and customary closing conditions.
Following the announcement, the company’s CEO said, “The sale of our asset in Denmark allows us to further focus our portfolio and strengthen our cash and liquidity position. The proceeds will be used to fund our world-class investment opportunity in Guyana. ”
It should be noted that Hess has been active in the North Denmark Sea since becoming South Arne field operator in 1994. South Arne, located approximately 150 miles west of Esbjerg, has produced oil and gas since 1999, and uses horizontal production and water injection wells to maximize production from chalk reservoirs. According to the Hess website, South Arne Field produced an average of 5,800 barrels of oil equivalent per day for Hess in the fourth quarter of 2020.
As it relates to the Stabroek Block, Hess Corporation, CNOOC / NEXEN and Concession Operator ExxonMobil have announced that plans are fast moving to bring a fourth project plan to government by the end of the year, while a fifth development already under consideration. In addition, the joint venture partners had indicated that it could have a sixth oil development project in the Stabroek Block by 2027.
Rystad Energy, an energy research and business intelligence firm, was one of the first industry stakeholders to predict that ExxonMobil would be able to install one FPSO offshore Guyana per year for the next 10 years. If these projections disappear, the 10th ship will begin production in 2031.
By the end of the first year, having installed the 10th FPSO, ExxonMobil would have eliminated 4.14 billion barrels of oil, leaving just over three billion barrels. In the following years, it will produce about 730 million barrels of oil each year. By 2036, there would be nothing left.