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Hess Corporation Announces Capital and Exploratory Budget for 2012

Friday, Jan 13, 2012

Hess Corporation (NYSE: HES) announced today a 2012 capital and exploratory budget of $6.8 billion, nearly all of which is targeted for Exploration and Production: $2.5 billion for unconventionals, $1.6 billion for production, $1.8 billion for developments and $800 million for exploration.

“We believe that the investments we are making in unconventionals are lower risk and will generate long term profitable growth for shareholders. We expect to fund the majority of our 2012 program from internally generated cash flow and asset sales.”

John B. Hess, Chairman and CEO, stated, “We believe that the investments we are making in unconventionals are lower risk and will generate long term profitable growth for shareholders. We expect to fund the majority of our 2012 program from internally generated cash flow and asset sales.”

Greg Hill, President of Worldwide Exploration and Production, said, “Our focus in 2012 will be on execution. We are committed to creating value and delivering sustainable growth in production and reserves from both our unconventional and conventional portfolios.”

Unconventional production and development expenditures of approximately $2.5 billion include:

  • Development of the Bakken Shale in North Dakota, where Hess plans to continue to operate 16 rigs and progress the expansion the Tioga Gas Plant
  • Drilling appraisal wells in the Eagle Ford Shale in Texas and the Utica Shale in Ohio

Production expenditures of approximately $1.6 billion include:

  • Drilling production and water injection wells at Shenzi (Hess 28 percent), and drilling production wells at the Llano Field (Hess 50 percent) in the deepwater Gulf of Mexico
  • Drilling production wells on Block G (Hess 85 percent - operator) in Equatorial Guinea

Development expenditures of approximately $1.8 billion include:

  • Commencing development drilling at the Tubular Bells Field (Hess 57 percent – operator) in the deepwater Gulf of Mexico
  • Completion of field redevelopment and gas lift projects at the Valhall Field (Hess 64 percent) in Norway
  • Concluding appraisal activities and progressing front end engineering and design work at WA-390-P (Hess 100 percent - operator) offshore Western Australia
  • Progressing development of Block A-18 (Hess 50 percent) in the Joint Development Area (JDA) in the Gulf of Thailand, including wellhead platform installations and ongoing drilling activities

Exploration expenditures of approximately $800 million include:

  • Drilling exploration wells in Ghana, Indonesia, Brunei and the deepwater Gulf of Mexico
  • Acquiring seismic at the Dinarta and Shakrok Blocks (Hess 80 percent - operator) in Iraqi Kurdistan

    Source: Business Wire

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