Hess 2005 Annual Report Download - page 8

6
DEVELOPMENT
In Equatorial Guinea, the Okume Complex development
(AHC 85%) is on track to commence production in
early 2007, with peak net production estimated at
40,000 barrels of oil per day. We are pleased to report
that we have been able to keep this project on budget
and on schedule in an environment of rapidly increasing
costs for materials and services.
The fabrication of the Ujung Pangkah (AHC 75%)
gas platform and onshore processing facility began
in 2005. The project is on schedule to commence
natural gas production by early 2007 at a rate of about
75 million cubic feet per day net to our Corporation.
In addition, discussions are underway with Indonesian
authorities regarding expanding the project to include
development of the oil resources on the block.
In 2005, we signed a gas sales agreement with Thai
authorities and reached agreement with our partners to
proceed with the development of the Phu Horm gas
project (AHC 35%) in Thailand. Production is expected
to commence around the end of 2006 and plateau at
a net rate of about 35 million cubic feet per day.
Approval of the plan of development for the Shenzi
discovery (AHC 28%) in the deepwater Gulf of Mexico
is expected in 2006 at which time the Corporation will
recognize initial reserves.
The Corporation acquired a 55% working interest
in the deepwater section of the West Mediterranean
Block 1 Concession, in the Arab Republic of Egypt,
for $413 million. The deepwater portion of the block
has four existing gas discoveries which will be
developed as well as exploration opportunities.
EXPLORATION
Our deepwater Gulf of Mexico portfolio is strong
and will be the focus of near-term exploration drilling.
In 2006, in the deepwater Gulf of Mexico, we intend
to participate in approximately seven high-impact wells.
Appraisal of the Tubular Bells discovery (AHC 20%)
in Mississippi Canyon Block 725 is also expected
in 2006. This portfolio of prospects has the potential
to add significant reserves and create substantial
value for the Corporation.
Our international exploration portfolio is growing.
In 2005, we enhanced our prospect portfolio, adding
offshore acreage in Libya, Egypt and Brazil. In 2006
we will focus on acquiring, processing and interpreting
seismic data in these areas with wildcat drilling
occurring in future years. The focus of our appraisal
and exploitation drilling program in 2006 will be in
Southeast Asia at the Malaysia/Thailand JDA and
the delineation of the Belud discovery (AHC 40%)
offshore the Malaysian state of Sabah. In addition,
we will study the commerciality of a recent discovery
on Block 64 in Peru (AHC 25%).
JOINT DEVELOPMENT AREA, MALAYSIA/THAILAND