Latest update April 23rd, 2024 12:59 AM
Sep 13, 2022 News
Kaieteur News – Hess Corporation’s Chief Executive Officer (CEO), John Hess has once again, explained just how crucial Guyana’s oil resources are to its balance sheet and longevity.
On the backs of two oil vessels, specifically the Liza Destiny FPSO and Liza Unity FPSO, Hess said the company was able to pay back its US$500M loan, increase its dividend by 50 percent and begin the repurchasing of US$650M worth of shares this year.
During a Barclays CEO Energy-Power Conference in New York, USA, Hess said, “In March, we increased our quarterly dividend by 50 percent and in the second quarter, we commenced a US$650M share repurchase programme which will be completed by the end of 2022. Between 2021 and 2016, we forecast that our net production will grow at a compound annual growth rate of more than 10 percent and during the same period, we expect to drive our cash cost down by 25 percent. Together, they generate 25 percent annual cash flow growth and a significant reduction in debt…”
At June 30, 2022, Hess said too that the company had US$2.2B cash on the balance sheet and to manage oil price volatility, it has hedged approximately 150, 000 barrels of oil per day of its oil production for 2022. This is to ensure it takes full advantage of the high oil price environment. The CEO was keen to note that the company’s priorities remain to have a disciplined capital allocation process where they only invest in high return, low-cost opportunities, to have a strong cash position on the balance sheet to ensure it can fund its world-class investment opportunities in Guyana and maintain its investment grade credit rating.
Looking forward, Hess said his company is well positioned to deliver increasing cash return to shareholders through both dividend increases and share repurchases. In terms of sanctioned oil developments on the Stabroek Block, Kaieteur News understands that production at the Liza Phase One development reached its new production capacity of more than 140, 000 gross barrels of oil per day in the second quarter following production optimization work on the Liza Destiny FPSO.
As for the Liza Phase Two development, which achieved first oil in February, it reached its gross production capacity of approximately 220, 000 barrels of oil per day earlier this month. The third development on the Stabroek Block at the Payara Field, with a gross production capacity of approximately 220, 000 barrels of oil per day, is on track for start-up in late 2023.
In early April, Hess and its partners announced the sanction of the US$10B Yellowtail Project which will be the largest development to date on the Stabroek Block. The project will develop an estimated recoverable resource base of approximately 925 million barrels of oil and have a gross production capacity of approximately 250, 000 barrels of oil per day, with the first oil expected in 2025. In terms of exploration and appraisal in Guyana, Hess said the partners continue to invest in an active programme, with approximately 12 wells planned for the Stabroek Block in 2022. Hess and its partners continue to see multi-billion barrels of future exploration potential remaining.
LISTEN HOW JAGDEO WILL MAKE ALL GUYANESE RICH!!!
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