Jan. 31 (UPI) -- Spending of around $2 billion for exploration and production is unchanged from last year, but focuses more on Guyana and North Dakota, Hess Corp. said.
Hess on Wednesday announced an exploration and production budget of $2.1 billion for this year, unchanged from 2017. CEO John Hess said about 60 percent of that would go toward an oil basin off the coast of Guyana that "continues to get bigger and better" and opportunities in the Bakken shale reservoir in North Dakota.
"Our 2018 budget is consistent with our strategy to grow our resource base in a capital disciplined manner, move down the cost curve so we are resilient in a low oil price environment, and be cash generative at a $50 per barrel Brent oil price post 2020," he said in a statement.
The price for Brent crude oil, the global benchmark, was around $68 per barrel early Wednesday.
More than half of the company's budget targets production. The first phase of drilling in the Liza development off the coast of Guyana, in which Hess holds a 30 percent stake, is expected to start in the second quarter and production should begin by 2020.
The company last year shed assets across a wide portfolio range to help fund operations at the Liza field in Guyana. Working alongside Exxon Mobil, the company said last year it would cost at least $3.2 billion to fully develop the broader offshore Liza field, which may contain as much as 3.2 billion barrels of oil equivalent. The CEO said Guyana would yield "a decade plus of returns-driven growth."
In North Dakota, Hess said it planned to spend $900 million to increase its rig count from four to six in order to drill 120 new wells in the Bakken shale. The Bakken shale is one of the premier basins in the United States. Production in November, the last full month for which the state has data, averaged 1.19 million barrels per day, about 32,000 barrels per day lower than the record set in late 2014.
Hess said its spending on exploration and production during the third quarter was $558 million, up from the $433 million during third quarter 2016. It took a loss of $624 million that it attributed to a change in tax structure, though production was lower across most of its portfolio.
Hess releases its fourth quarter report Feb. 5.