Guyana’s oil boosts Hess second quarter earnings to US$667M

Jul 28, 2022 News

Kaieteur News – Hess Corporation on Wednesday reported that it achieved a net income of US$667 million, or US$2.15 per common share, in the second quarter of 2022, compared with a net loss of US$73 million, or US$0.24 per common share, in the second quarter of 2021.

Hess CEO, John Hess

The corporation said the improvement in after-tax earnings compared with the prior-year quarter adjusted results was primarily due to higher realized selling prices in the second quarter of 2022. Increased production at its operations in Guyana also contributed to its sizeable net profits.

At the Stabroek Block where it has a 30 percent working interest, Hess said net production totaled 67,000 barrels of oil per day (bopd) in the second quarter of 2022 compared with 26,000 bopd in the prior-year quarter.

In explaining the increase in barrels received, Hess said production from the Liza Destiny Floating Prouction Storage and Offloading (FPSO) vessel reached its new production capacity of more than 140,000 gross bopd in the second quarter of 2022 following the completion of production optimization work initiated in March.

As for net production from the Liza Unity FPSO, which commenced in February, Hess said this was 35,000 bopd in the second quarter of 2022, and reached its production capacity of 220,000 gross bopd in July.

In the second quarter, Hess said the company sold six one-million barrel cargos of crude oil from Guyana compared with two one million barrel cargos in the prior year quarter.

With respect to net production guidance for Guyana for the full year 2022, Hess said this is expected to be approximately 75,000 bopd, which includes approximately 6,000 bopd of tax barrels. Net production guidance for the third quarter of 2022 is expected to be in the range of 90,000 bopd to 95,000 bopd, which includes approximately 7,000 bopd of tax barrels. There were no tax barrels in the first or second quarters, Hess said in its earnings report.

Hess and its co-venture partners currently have four sanctioned developments on the Stabroek Block. The Liza Phase 1 development, which began production in December 2019, reached its new production capacity of more than 140,000 gross barrels of oil per day in the second quarter of 2022 following production optimization work.

The Liza Phase 2 development, which achieved first oil in February 2022 utilizing the Liza Unity FPSO, reached its production capacity of approximately 220,000 gross barrels of oil per day earlier this month. The third development at Payara is on track to come online in late 2023 utilizing the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.

The fourth development, Yellowtail, will be the largest development to date and is expected to come online in 2025, utilizing the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day. At least six FPSOs with a production capacity of more than 1 million gross barrels of oil per day are expected to be online on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator of the oil rich concession and holds 45 percent interest. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.