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Hess Corp. expecting 10% increase in oil and gas production

Hess this week said it has plans to spend billions of dollars on exploration and production this year.

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U.S-based exploration and production company Hess Corp. said most of its spending for the year would focus on U.S. and offshore Guyana. Logo courtesy of Hess Corp.
U.S-based exploration and production company Hess Corp. said most of its spending for the year would focus on U.S. and offshore Guyana. Logo courtesy of Hess Corp.

Jan. 25 (UPI) -- A day after announcing a $3.7 billion spending program for the year, U.S.-based energy company Hess Corp. said it expected total production to increase by 10% from 2022 levels.

Hess is focused primarily on operations in the Bakken shale acreage in North Dakota and deposits offshore Guyana. For the fourth quarter, the company reported that total production of both oil and natural gas averaged 376,000 barrels of oil equivalent per day, a 27% increase over year-ago levels.

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For 2023, Hess is expecting the full-year average to be in the range of 355,000 to 365,000 barrels of oil equivalent per day, a 10% increase over the 2022 average should the forecast prove accurate.

"Our strategy is to grow our resource base, deliver a low cost of supply and generate industry-leading cash flow growth -- and at the same time maintain our industry leadership in environmental, social and governance performance and disclosure," CEO John Hess said.

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Hess Corp. suggested Tuesday that much of its new output would come from just two areas -- the Bakken and Guyana -- with support from around $3 billion in spending for 2023, some 80% of its planned capital expenditures for the year.

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The Stabroek reserve offshore Guyana is estimated to hold around 11 billion barrels of oil equivalent reserves, while the Bakken should yield around 1 million barrels of oil this year.

Companies like Hess have come under fire for focusing more on returning value to their shareholders rather than spending more on new exploration and production. And while Hess pre-empted its quarterly earnings report with a preview of spending, net income of $624 million during the fourth quarter was more than double year-ago levels, warranting higher shareholder returns.

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The successful execution of corporate plans, the CEO said, "has uniquely positioned our company to deliver significant value to shareholders by both growing intrinsic value and growing cash returns."

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