U.S. production for Hess balanced by third-party issues offshore

The company said last week it would spend almost $1 billion to increase its activity in the Bakken shale.
By Daniel J. Graeber  |  Feb. 5, 2018 at 8:31 AM
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Feb. 5 (UPI) -- Total U.S. oil production for Hess Corp. during the fourth quarter was balanced by gains from the Bakken shale and third-party issues in the Gulf of Mexico.

Hess Corp. reported net production from the Bakken shale basin, one of the more lucrative reservoirs in the Lower 48, increased 16 percent from fourth quarter 2016 to 110,000 barrels of oil equivalent per day.

Hess said it operated four rigs in the Bakken shale during the fourth quarter and, on Wednesday, said it planned to spend $900 million to increase that rig count to six. 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.

In the Gulf of Mexico, Hess said it produced an average of 40,000 barrels of oil equivalent per day, about 34 percent less than fourth quarter 2016. Production there was impacted primarily by a fire at the Enchilada platform in November.

Two people were injured in that accident. Hess is not the operator and there were no signs that oil was on the water at the time of the incident.

Royal Dutch Shell said two of its platforms were closed down, as was a 30-inch natural gas pipeline. Hess closed down production from three of its fields as a result of the incident.

The U.S. waters of the Gulf of Mexico account for about 17 percent of total national oil production and 5 percent of the dry natural gas production per day. New production in the region started for Hess in January.

Hess said this year it is targeting annual savings for the year of around $150 million, which would come in part through restructuring. It already cut 400 positions from its payroll in January.

For the fourth quarter, the company reported a net loss of $2.7 billion, compared with a net loss of $4.9 billion for the same period in 2016.

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