Hess increases 2011 capex; plans $1.6B in field developments, $3.1B in production upgrades

Hess Corporation announced a 2011 capital and exploratory budget of $5.6 billion, nearly all of which is targeted for Exploration and Production: $3.1 billion for production, $1.6 billion for developments and $900 million for exploration. 
John B. Hess, Chairman and CEO, stated, “We are pleased to have a global portfolio of attractive investment opportunities. We expect to fund our 2011 program from internally generated cash flow.” 
Greg Hill, President of Worldwide Exploration and Production, said, “More than 35 percent of our capital and exploratory expenditures in 2011 are devoted to unconventional oil projects. We have a balanced program that will underpin our long term target of growing reserves and production by at least 3 percent per year.” 
Production expenditures of approximately $3.1 billion include the Bakken oil shale in North Dakota, where Hess plans to operate 15 rigs and expand production facilities. The budget also goes toward drilling production and water injection wells at Valhall (Hess 64 percent working interest) in Norway and Shenzi (Hess 28 percent) in the deepwater Gulf of Mexico; and well workovers and completions at Ceiba and Okume Complex (Hess 85 percent - operator) in Equatorial Guinea. 
Field development expenditures of $1.6 billion includes the expansion of the Tioga Gas Plant and construction of a crude oil rail loading and storage facility to support the development of the Bakken oil shale in North Dakota. Additionally, the budget will fund field redevelopment work at Valhall to increase production capacity and extend field life by 40 years is expected to be completed during 2011. Also, money will go to Pony (Hess 100 percent - operator) and Tubular Bells (Hess 40 percent - operator) in the deepwater Gulf of Mexico, where engineering and design work is progressing. 
Exploration expenditures are budgeted at $900 million, including conventional deepwater drilling in Egypt, Ghana, Indonesia and Brunei; and unconventional onshore drilling in the Eagle Ford Basin in Texas and the Paris Basin in France.
Source: Press release