January 28, 2020 / 1:20 PM / 20 days ago

Oil producer Hess boosts 2020 spending on Guyana, Bakken ramp-up

FILE PHOTO: Pumpjacks taken out of production temporarily stand idle at a Hess site while new wells are fracked near Williston, North Dakota November 12, 2014. REUTERS/Andrew Cullen/File Photo

(Reuters) - U.S. oil and gas producer Hess Corp said it would spend 11% more in 2020 compared with last year, betting heavily on its assets in offshore Guyana and the Bakken shale play.

The company said its 2020 exploration and production capital and exploratory budget will be $3 billion, higher than the estimated $2.7 billion allocated for 2019.

The company said it would allocate $1.69 billion for production, $860 million for offshore Guyana developments and $450 million for exploration and appraisal activities.

Hess has been relying on its investment in offshore Guyana, one of the world’s most important oil and gas blocks in the last decade, which is being developed by a consortium led by oil major Exxon Mobil Corp.

The partnership recently boosted Guyana oil estimates by 2 billion barrels, bringing total recoverable oil and gas resources to more than 8 billion barrels.

The company expects net production, excluding Libya, to average between 330,000 and 335,000 barrels of oil equivalent per day (boe/d) in 2020 compared with the 285,000 boe/d it expects for 2019.

“We are well positioned to deliver industry leading cash flow growth while also achieving significant reductions in our unit costs, which will drive margin expansion and lower our breakeven oil price to below $40 per barrel Brent by 2025,” said Chief Executive Officer John Hess in a statement.

Hess is expected to report its fourth-quarter results and its spending in 2019 on Wednesday.

Reporting by Shanti S Nair in Bengaluru; Editing by Anil D'Silva and Krishna Chandra Eluri

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