Hess 2014 Annual Report Download - page 107

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The 2014 additions, revisions and transfers primarily consisted of the following:
xIn the Bakken shale play in North Dakota, additions, revisions, and transfers in proved undeveloped reserves amounted to
a net increase of 12 million boe. Additions of 97 million boe (consisting of 77 million barrels of crude oil, 14 million
barrels of natural gas liquids and 39 million mcf of natural gas) relate to planned drilling of additional new wells through
2019. Additions were partially offset by downward revisions of 47 million boe (consisting of 40 million barrels of crude
oil and 7 million barrels of natural gas liquids) as a result of well performance and reprioritization of well locations in the
drilling schedule resulting in certain wells moving beyond 2019. Transfers from proved undeveloped reserves into proved
developed reserves amounted to 38 million boe (consisting of 31 million barrels of crude oil, 5 million barrels of natural
gas liquids and 15 million mcf of natural gas).
xIn the Utica wet gas play, in Ohio, the Corporation added 18 million boe of proved undeveloped reserves (consisting of 1
million barrels of crude oil, 3 million barrels of natural gas liquids and 79 million mcf of natural gas) as a result of
additional planned drilling.
xIn the Gulf of Mexico, additions, revisions, and transfers in proved undeveloped reserves amounted to a net decrease of 3
million boe. Additions of 21 million boe (consisting of 20 million barrels of crude oil and 9 million mcf of natural gas)
relate to the sanction of the Stampede project. In addition, reserve revisions of 6 million boe from the Conger Field
increased year-end proved undeveloped reserves. Primarily as a result of first production at the Tubular Bells Field, 30
million boe (consisting of 21 million barrels of crude oil, 3 million barrels of natural gas liquids and 35 million mcf of
natural gas) were transferred from proved undeveloped to proved developed reserves.
xAt the Valhall Field, offshore Norway, additions, revisions, and transfers from proved undeveloped reserves amounted to a
net increase of 13 million boe. Additions resulting from planned drilling activity were 37 million boe (consisting of 29
million barrels of crude oil, 4 million barrels of natural gas liquids and 24 million mcf of natural gas). Revisions reduced
proved undeveloped reserves by 9 million boe and transfers into proved developed reserves were 15 million boe.
xIn the North Malay Basin, offshore Peninsular Malaysia, where the Corporation is operator of a multi-phase natural gas
development project, additions were 31 million boe (186 million mcf) of natural gas following the signing of a gas sales
agreement for the full field development phase of the project.
xTotal other transfers of proved undeveloped reserves to proved developed reserves of 26 million boe were from Denmark,
the JDA and other assets.
The Corporation estimates that capital expenditures totaling $3,110 million were incurred to convert 110 million boe of proved
undeveloped reserves to proved developed reserves during 2014. The capital expenditures include production facilities and subsea
infrastructure for the Tubular Bells field in the Gulf of Mexico which achieved first production in late 2014.
The December 31, 2013 oil and gas reserve estimates disclosed above include 502 million barrels of liquid hydrocarbons and 865
million mcf of natural gas, or an aggregate of 646 million boe, classified as proved undeveloped reserves. Overall volumes of proved
undeveloped reserves decreased by 28 million boe compared with year-end 2012. In 2013, additions and revisions to proved
undeveloped reserves amounted to 123 million boe, primarily in the United States. The additions and revisions primarily resulted
from ongoing technical assessments, performance evaluations, and additional planned development activities. In 2013, transfers to
proved developed reserves amounted to 88 million boe resulting from continued development activity and new wells principally in
North Dakota and the Gulf of Mexico in the U.S., Norway, Malaysia and Equatorial Guinea. Asset sales reduced proved undeveloped
reserves by 63 million boe.
In the United States, 2013 proved undeveloped reserve additions of 160 million barrels of crude oil, 29 million barrels of natural
gas liquids and 90 million mcf of natural gas relate primarily to new well locations to be drilled in the Bakken oil shale play through
2018. Negative revisions of proved undeveloped reserves in the United States of 37 million barrels of crude oil, 5 million barrels of
natural gas liquids and 46 million mcf of natural gas were primarily due to the reprioritization of well locations in the drilling schedule
for the Bakken oil shale play resulting in certain wells moving beyond 2018. Transfers to proved developed reserves in the United
States of 32 million barrels of crude oil, 5 million barrels of natural gas liquids and 27 million mcf of natural gas resulted from drilling
activity.
The Corporation estimates that 2013 capital expenditures of $1,765 million were incurred to convert 88 million boe of proved
undeveloped reserves to proved developed reserves during 2013 resulting from continuing development activity and new wells
principally in North Dakota and the Gulf of Mexico in the U.S., Norway, Malaysia and Equatorial Guinea.
The Corporation is involved in multiple long-term projects that have staged developments. Certain of these projects have proved
reserves, which have been classified as undeveloped for a period in excess of five years, totaling 80 million boe or 6% of total 2014
proved reserves. Most of the proved undeveloped reserves in excess of five years relate to two offshore producing assets. As
discussed below, a natural gas project at the JDA is being developed in phases to meet long-term natural gas sales contracts and an oil