US upstream independents focus on ‘core of the core’

摘要

US independent Hess’ chief executive John Hess has offered an insight into the strategy that the firm and its peers will pursue this year as they deal with crude prices falling to $30/bl or lower. “Focus is on the core of the core,” he says. As part of that drive, Hess will lower its 2016 capital expenditure (capex) by 40pc from last year to $2.4bn. Its overall output this year, excluding Libya, is targeted at 330,000-350,000 b/d of oil equivalent (boe/d), unchanged from guidance given in October, but down from 368,000 boe/d in 2015. The independent will cut the number of rigs operating at its biggest shale acreage, in the Bakken formation in North Dakota, to just two this year from an average 8.5 last year and 17 in 2014. Its Bakken output will be 95,000-105,000 boe/d this year compared with 112,000 boe/d last year, which was an increase of just over a third from 2014. “Our focus is on value, not volume, and we do not think it makes sense to accelerate production in the current environment, particularly given the recent further deterioration in the oil market,” Hess says.