Hess 2014 Annual Report Download - page 39

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hedging were $92.17 per barrel in 2014, $98.48 in 2013 and $86.94 in 2012. Average realized natural gas selling prices were
$6.04 per mcf in 2014, $6.64 in 2013 and $6.16 in 2012. Production averaged 329,000 barrels of oil equivalent per day
(boepd) in 2014, 336,000 boepd in 2013 and 406,000 boepd in 2012.
Excluding production from assets sold and Libya, pro forma production was 318,000 boepd in 2014, 269,000 boepd in
2013 and 268,000 boepd in 2012. The Corporation currently expects total worldwide production to average between
350,000 boepd and 360,000 boepd in 2015, excluding any contribution from Libya.
The following is an update of significant E&P activities during 2014:
xIn North Dakota, net production from the Bakken oil shale play averaged 83,000 boepd, an increase of 24% from
67,000 boepd in 2013, primarily due to ongoing field development and operations commencing at the expanded
Tioga Gas Plant in late March 2014. During 2014, the Corporation operated an average of 17 rigs to drill
261 wells and complete 230 wells bringing the total operated production wells to 982 at December 31, 2014.
Drilling and completion costs per operated well averaged $7.3 million in 2014, down from $8.1 million in 2013.
In 2015, the Corporation plans to operate an average of 9.5 rigs to drill 170 wells and bring 210 wells on
production while reducing capital expenditures to $1.8 billion from $2.2 billion in 2014. Bakken production is
forecast to average between 95,000 boepd and 105,000 boepd in 2015.
xAt the Valhall Field in Norway (Hess 64%), net production averaged 31,000 boepd during 2014 compared with
23,000 boepd in 2013. This increase reflected the impact of start-up operations following completion of a
redevelopment project in 2013, ongoing drilling of production wells and higher facilities uptime.
xAt Block A-18 of the Joint Development Area of Malaysia/Thailand (JDA), the operator, Carigali Hess Operating
Company, continued drilling production wells and successfully installed a new wellhead platform in 2014.
Production averaged 42,000 boepd in 2014 compared to 45,000 boepd in 2013, including contribution from
unitized acreage in Malaysia. Further development drilling is planned for 2015 and the completion of a booster
compression project is planned for early 2016.
xAt the Hess operated Tubular Bells Field in the Gulf of Mexico, the Corporation achieved first production in
November 2014 following completion of construction, installation and commissioning of offshore production
facilities and subsea equipment. Three wells are currently producing with a fourth production well expected to be
completed in 2015. Full year 2015 net production for Tubular Bells is expected to be in the range of
30,000 boepd to 35,000 boepd.
xIn the North Malay Basin (NMB), net production from the Early Production System averaged 40 million cubic
feet per day during 2014 compared with 30 million cubic feet per day in the fourth quarter of 2013.
First production from the Field commenced in October 2013 with the first condensate offtake occurring in
November 2014. Full field development is scheduled to be completed in 2017 when net production is expected to
increase to approximately 165 million cubic feet per day.
xAt the South Arne Field (Hess 62%) offshore Denmark, the Corporation continued drilling operations in 2014
following the December 2013 start-up of its phrase three development project which comprised the installation of
two new wellhead platforms and modifications to existing production facilities. Development drilling is planned to
continue into 2015.
xIn the Utica shale, 38 wells were drilled, 36 wells were completed and 39 wells were brought into operation. Net
production increased to approximately 13,000 boepd in the fourth quarter of 2014. The Corporation and its joint
venture partner plan to operate two drilling rigs in 2015 to drill 20 – 25 wells and bring on production 25 – 30
wells.
xIn Libya, civil and political unrest has largely interrupted production and crude oil export capability since August
2013. At the WAHA fields (Hess 8%), the operator recommenced production in the third quarter of 2014 at a
reduced rate and the Corporation was able to sell four tank cargos of crude oil by year-end. The Corporation’s
net production from Libya averaged 4,000 boepd in 2014, 15,000 boepd in 2013 and 21,000 boepd in 2012. In
December 2014 the Libyan National Oil Company declared force majeure with respect to the Waha fields and
production is currently shut in.
xIn Ghana, the Corporation completed its three well appraisal program on the Deepwater Tano Cape Three Points
Block, offshore Ghana. In 2015 the Corporation and its partners will continue to analyze data from both appraisal
drilling and 3D seismic with an expected project sanction decision in 2016.
xIn the fourth quarter of 2014, the Corporation announced that together with its project co-owners it will proceed
with the development of the Stampede project in the Gulf of Mexico. A two-rig drilling program is planned with