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Hess cuts Bakken operated rigs, budget

Hess Corporation recently announced that the New York-based company is reducing its 2015 capital and exploratory budget and will cut the number of rigs operating in the Bakken formation by nearly half. The company plans to spend $4.7 billion this year, down 16 percent from the $5.6 billion spent last year.

Of the total expenditures, $2.1 billion will be devoted to unconventional shale resources. Production will receive $1.2 billion, $1 billion will go to developments and $400 million is dedicated to exploration. In a statement, Hess CEO John Hess said, “Our company is well positioned to manage through the current price environment, with a strong balance sheet and resilient portfolio. Our 2015 budget reflects a disciplined approach to maintaining our financial strength and flexibility while preserving our long term growth options.”

Related: Hess sees strong output growth even with low oil price

Of the money allotted for unconventional development, $1.8 billion is slated to be spent on developments in North Dakota’s Bakken formation, down from the $2.2 billion spent last year. Roughly $1.45 billion will be devoted to drilling and completions, well pad facilities and low pressure gathering lines. Major infrastructure projects will receive an investment of $350 million. The remainder of funds for unconventional development, $290 million, will go toward drilling 20-25 wells in the core of the Utica formation’s wet gas window in Ohio.

Hess President and COO Greg Hill reports that in the Bakken formation, the company will operate an average of 9.5 rigs, which is down nearly half from last year’s operated rig count of 17. Also, this year the company will bring roughly 210 new operated wells online, down from the 238 wells brought online last year.

Hill said, “Hess has some of the best acreage in the Bakken, and we will continue to drill in the core of the play which offers the most attractive returns. Substantially all our core acreage is held by production, which allows us to defer investment in the short term while maintaining the long term value and optionality of this important asset. As oil prices recover we will increase activity and production accordingly.”

46 comments

  1. Who was it that said the Bakken wasn’t going to slow down?

  2. Yea this is old news. Known that for about 4 months now.

  3. Ya I knew they were going to cut back. We went from 18 rigs to 10 now.

  4. Seasonal slowdown, my ass. Grab on folks it is going to be a rough ride for anyone who’s income depends on the oilfield.

  5. Yes it’s here and everywhere!!!!!

  6. 16% reduction in CAPEX is actually light compared to other operators. You gotta see this as a glass half full.

  7. If you cut your budget by 16% and only have half the rigs you did, there should be some cash left over.

  8. I’m amused each time I click here because the greenhorns, whom have blown most of their earnings and are now close to being out of work, are frightened beyond belief, yet the well seasoned guys could give a rip. Thus, welcome to the real world, folks! It don’t get much easier, so make hay while the sun shines and don’t blow your earnings like a jackass.

  9. Now that they’ve nailed down the sweet spots in the play, commodity prices force them to reduce costs and drill high density well bores. Google search “Array Fracking”

  10. There must be to many white trash millionaires out there. Can’t have to many lower class ppl with money. Thanks Obama.

  11. Nothing new here. As someone who works on a rig that drills for Hess in the Bakken I actually find this article refreshing. The glass is definitely half full with Hess and I the rigs that they have remaining.

  12. I have been on a Hess rig for 3 days now and they have Halliburton fracking it they have 4 holes drilled

  13. Well I’m going back 2 jersey

  14. When oil prices recover..?..?..?

  15. The company I work for in the BAKKEN is hiring as I text this slowing down don’t mean bust it will recover

  16. They should leave NY since the gov. don’t want no fracking.

  17. Ya all these drilling companies will have single digit rig counts in no time!

  18. That’s stacked rigs in TX Dan

  19. Well I’m going back to winchestertonfieldville, Iowa

  20. I knew they weren’t going to keep drilling at this low of priced like they had talked of two years ago being stable at 35 per bbl

  21. Sounds like propaganda for the public to react, or get ready for a resming at the pump.

  22. Some things are definitely changing

  23. Jim I’m in the marcellus and Utica Shale in Ohio not slowing down drilling 189 wells this year have 4 frack crews working thru winter 2 workover rigs and just picked up a 3rd. Just saying but we’re in the gas end oil is a residual benefit.

  24. Thanks for the photo Val!! Hope you have a great day!

  25. Lloyd Gomez^^^^^ Bahaha! Love it.

  26. K. Didn’t know they were stored that way. Takes up a smaller footprint I guess.

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