June 29 (UPI) -- U.S. energy company Hess Corp. said it would use the $400 million from the sale of assets in the Utica shale basin to fund work in Guyana and North Dakota.
Hess said Friday it reached an agreement with Ascent Resources to sell off its joint venture interests in the Utica shale basin in eastern Ohio. The divestment of 39,000 net acres is expected to produce an average of 14,000 barrels of oil equivalent per day this year, of which 70 percent is natural gas.
CEO John Hess said the funds would support growth across other segments of the company's portfolio.
"Proceeds from this transaction will be used to invest in our higher return growth opportunities in Guyana and the Bakken and to fund the company's previously announced share repurchase program," he said in a statement.
Exxon Mobil Corp. and partner Hess announced their eighth oil discovery off the coast of Guyana earlier last week. Analysis sent from consultant group Wood Mackenzie to UPI in response to questions found reservoirs offshore Guyana are transformative, even for big companies like Exxon and Hess.
Dubbed Longtail, the latest discovery was made near the giant Liza field, which could be producing about 500,000 barrels per day by late 2023. Hess estimated it would cost at least $3.2 billion to fully develop the broader offshore Liza field.
North Dakota reported an average crude oil production rate for April, the last full month for which data are available, at 1.22 million barrels per day, just shy of the all-time high from December 2014 of 1.23 million barrels per day. More than 90 percent of that came from the Bakken shale formation, which set a record in April for gas production.
Hess reported a net loss of $106 million in the first quarter, compared with a loss of $324 million in the same period in 2017. The company attributed the improvement to higher crude oil prices and lower operating costs.
The U.S. Energy Information Administration includes Utica data in with the Marcellus shale play, noting overlapping conditions make it difficult to discern one from the other. In its latest drilling productivity report, the broader Appalachia basin ranks sixth among the seven major shale basins in terms of oil production and first for natural gas.