be the target of 35 new wells at a cost of $550 million.
Hess in September agreed to terms with PVR Partners LP
for the latter to build, own, and operate a 45-mile natural gas
trunkline and associated gathering pipelines and equipment
serving Hess’s lean gas production in the Utica (OGJ Online,
Sept. 4, 2013).
The remaining 51% of the company’s 2014 budget will be
used for production, development, and exploration around
Hess’s production budget is expected to reach $1.475 billion, divided among Equatorial Guinea, Norway, the Gulf of
Thailand, Denmark, and the deepwater Gulf of Mexico.
The company’s $925 million development budget includes start-up of the Tubular Bells field in the deepwater
gulf and full field development of the North Malay basin
Hess’s $550 million exploration budget encompasses
Ghana, Iraqi Kurdistan, and deepwater gulf.
Last year, Hess undertook a large scale divestiture to repay debt and strengthen its balance sheet, during which the
company parted with its energy marketing units, Russian
subsidiary Samara-Nafta along with interests in the Pangkah
and Natuna A assets offshore Indonesia, Beryl field in the
UK North Sea, the Eagle Ford play in Texas, and the Azeri,
Chirag, and Guneshli fields in Azerbaijan (OGJ Online, Dec.
PwC: US M&A activity down
in 2013 despite strong finish
The US oil and gas industry finished 2013 strong when it
came to mergers and acquisitions, but the late-year push to
a total of 182 deals totaling $115.9 billion wasn’t enough to
match the 212 deals worth $152.8 billion in 2012, PwC US
Energy Practice said in a report released Jan. 28.
The increased fourth-quarter activity resulted in 51 oil
and gas deals with values greater than $50 million, accounting for $41.7 billion, a 154% increase from the third quarter.
However, deal volume in fourth-quarter 2013 declined
36% compared with fourth-quarter 2012, with deal value
dropping 29% during the same time period, in large part
due to pending changes in US tax law, PwC said.
Asset transactions in deals of more than $50 million
dominated total M&A deal volume during last year’s fourth
quarter, reaching 42 deals representing 82% of total deal volume. Deal value for asset transactions reached $22.7 billion,
54% of total deal value for fourth-quarter 2013.
There were a total of 154 asset deals worth $77.5 billion
and gas transactions leader, E&Y Americas.
“Transactions in the midstream sector showed the most
buoyancy in 2013, driven by the significant midstream infrastructure needs and capital requirements. Additionally, low
natural gas prices have spurred investment in gas export facilities in the US with continued interest from foreign investors.
“While we were disappointed in the level of activity in
2013, solid corporate balance sheets and significant private
equity capital in oil and gas investments point to strong deal
flow in 2014,” McCarter stated.
Hess reports $5.8 billion
capital budget for 2014
Hess Corp. reported that its exploration and production capital budget for 2014 is expected to reach $5.8 billion, almost
have of which, $2.85 billion, will be spent on unconventional shale resources.
The remainder of the budget will go toward production at
$1.475 billion, developments at $925 million, and exploration at $550 million.
“We are committed to ensuring that our capital and exploratory budget enables our goal of achieving 5-8% compound average production growth through 2017 while generating the highest possible risk adjusted returns,” said John
Hess, Hess chief executive officer.
Greg Hill, Hess president and chief operating officer, added,
“Our expenditures in the Bakken are planned to be $2.2 bil-
lion in 2014, flat with 2013. However, as a result of lower
well costs and decreased investments in infrastructure proj-
ects we plan to operate 17 rigs vs. 14 last year and to bring
225 new operated wells online in 2014 compared to 168 in
Hill continued, “In addition, we plan to increase our ex-
penditures in the emerging Utica shale play to $550 million
from $455 million last year, as we focus our activities on the
appraisal and development of the wet gas window.”
Of the $2.85 billion purposed for unconventional plays,
$2.2 billion will be used for the development of the Bakken
shale in North Dakota.
Hess in 2013 reported a $6.7 billion E&P budget, 40%
of which was to be dedicated to unconventional oil and gas
plays. The Bakken was subject to receive $2.2 billion, down
from $3.1 billion in 2012 (OGJ Online, Jan. 11, 2013).
Hess plans to operate 17 rigs and bring 225 new operated
wells online while investing $350 million on major projects,
including the completion of the expansion of the Tioga gas
plant and associated pipeline and compression projects.
The wet gas window of the Utica shale play in Ohio will