Hess 2014 Annual Report Download - page 23

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88
wellhead platform. Further development drilling is planned for 2015 and the completion of a booster compression project is
planned for early 2016. Net production in 2015 is expected to be approximately 250,000 million cubic feet per day.
Malaysia: The Corporation’s production in Malaysia comes from its interest in Block PM301 (Hess 50%), which is
adjacent to and is unitized with Block A-18 of the JDA and its 50% interest in Blocks PM302, PM325 and PM326B located
in the North Malay Basin (NMB), offshore Peninsular Malaysia, where the Corporation is operator of a multi-phase natural
gas development project. NMB achieved first production in October 2013 from an Early Production System. The
Corporation expects net production to average approximately 40 million cubic feet per day through 2016 until full field
development is completed. Net production is expected to increase to approximately 165 million cubic feet per day in 2017.
Australia: The Corporation holds an interest in an exploration license covering approximately 780,000 acres in the
Carnarvon Basin offshore Western Australia (WA-390-P Block, also known as Equus) (Hess 100%). The Corporation has
drilled 13 natural gas discoveries. Development planning and commercial activities continued in 2014, which included the
execution of a non-binding letter of intent with a potential liquefaction partner. Successful negotiation of a binding
agreement with the third party liquefaction partner is necessary before the Corporation can execute a gas sales agreement and
sanction development of the project. See Capitalized Exploratory Well Costs in Note 6 – Property, Plant and Equipment in
Notes to Consolidated Financial Statements.
Kurdistan Region of Iraq: The Corporation is operator and holds an 80% paying interest (64% working interest) in the
Dinarta exploration block. Drilling activities have been suspended on the Shireen exploration well in the Dinarta Block and
the Corporation is currently assessing its completion options.
China: In July 2013, the Corporation signed a Production Sharing Agreement (PSA) with China National Petroleum
Corporation to evaluate unconventional oil and gas resource opportunities covering approximately 200,000 gross acres in the
Santanghu Basin. The exploration phase commenced in August 2013 and two wells were drilled and expensed. In
December, 2014 the Corporation provided formal notice of its intent to end its participation in the PSA.
Guyana: The Corporation holds a 30% participating interest in the offshore Stabroek license. The Corporation anticipates
the operator, Esso Exploration and Production Guyana Limited, to commence drilling of the Liza-1 well in March 2015.
Canada: The Corporation received regulatory approval to hold a 40% participating interest in four exploration licenses
offshore Nova Scotia. The Corporation expects the operator, BP, to commence exploration drilling in 2017.
Sales Commitments
The Corporation has contracts to sell fixed quantities of its natural gas and natural gas liquids (NGL) production. The
natural gas contracts principally relate to producing fields in Asia. The most significant of these commitments relates to the
JDA where the minimum contract quantity of natural gas is estimated at 96 billion cubic feet per year based on current
entitlements under a sales contract with the national oil companies of Malaysia and Thailand expiring in 2027. At the North
Malay Basin development project, the Corporation has a commitment to deliver a minimum of 24 billion cubic feet of natural
gas per year from full field development start-up, which is expected in 2017, through 2033. The estimated total volume of
production subject to sales commitments is approximately 1.7 trillion cubic feet of natural gas.
The Corporation has NGL delivery commitments in the Bakken and Permian Basin of Texas through 2023 of
approximately 9 million barrels per year, or approximately 99 million barrels over the life of the contracts.
The Corporation has not experienced any significant constraints in satisfying the committed quantities required by its sales
commitments, and it anticipates being able to meet future requirements from available proved and probable reserves and
projected third party supply.