HES - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 Hess Corporation Conference Call. My name is Ayeila, and I will be your operator for today.

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Jay Wilson, Vice President of Investor Relations. Please proceed.

Jay R. Wilson

Ayeila. you, Thank and quarter everyone, for in participating Good conference thank call. fourth earnings our morning, you

and the and include in cause such Our was projections These that website, risks actual federal www.hess.com. statements measures section earnings information, Risk on during the expressed with securities the differences results call, Today's found financial appears subject and Conference the to of can release on uncertainties Midstream within are be those conference which PM. issued measures. be laws. Hess's this we These annual call website SEC. of contains conference our implied the known of today supplemental meaning most and reconciliation between to and statements quarterly forward-looking set these or in and other financial the forth reports the today's morning those Factors non-GAAP on unknown risks Hess may call differ from provided statements. Partners A the in comparable filed non-GAAP X:XX will directly at our may financial GAAP certain discuss Also, measures

Chief now Chief John John Now, Officer; Officer. Hill, Executive today John Operating Financial Hess. turn will Rielly, as Officer; are Hess, I the Greg call and to usual, me with Chief over

John B. Hess

and plans. guidance, Welcome Hill XXXX will fourth you, will our results. Rielly quarter and performance our overall our to financial and strategy Greg Thank review then Jay. conference will call. our I operating review discuss John

the barrel a at to price so we price we cash-generative company our enabling in XXXX, and investing a grow the move cost a turn Bakken to developments consistent assets. This highest in strategy: and XXXX. In in high-grading manner; high-grade our world-class portfolio return bolstering oil curve portfolio to making mature capital with be our cash $XX Guyana operating our strategy, to resource that in our returning down and our in reducing progress shareholders in capital-disciplined environment; low post debt. unit assets per our resilient higher aggressively sheet pre-fund moved Our divesting base focus oil Brent to are oil is to costs, significant by and us and is also our lowering Guyana and while balance cost

in along now as year Our deepwater to XX% portfolio Guyana cost the and compound cash growth XXXX. divesting cost investing of Gulf combination our $XXX is and our cost expect is less capital-efficient per generate the expected program growth of cash by we as through drive Mexico of on a XXXX. focused On and Bakken annual Malaysia $XX unit engines. forma than and production oil of per assets higher XX% our meaningful equivalent basis, to barrel to assets approximately down pro by million production lower cost The with annual a reduction approximately engines

oil price As XX% cash growth a oil per at barrel result, more through per Brent than a per XXXX. per year a more Brent and price barrel we at expect year generate XX% flow than $XX $XX of to

Equatorial that proceeds August million. for of as transactions proceeds resulted our in of in our In proceeds fourth and total obligations. Midstream in closed These $XXX divestiture quarter enhanced of Guinea XXXX of we terms asset $X.X of million total total IPO oil the followed net in October, recovery for In $XXX total $X planned. our announced portfolio assets release the of of billion the retirement billion $X.X million. in monetizations Partners for asset sale Hess the of and the higher-cost resulted in billion high-grading, $XXX mature Both of successful of assets Permian proceeds Norway our proceeds mature and sales April in of

interest our be for world-class process complete sales a to will opportunity used commenced and XXXX. which investment sales from pre-fund in have we Guyana. asset first expect in in foremost our to Denmark, we our Proceeds addition, In

in In half second we and XXXX, drilling addition, rigs we a of inventory to million we $XXX where intend in of to plan to have high-return robust increase back Bakken in rigs of to from debt the $XXX up locations. four six Also, reduce buy stock the million.

capital in further well as position paybacks has oil its in plan a evaluate requirements Key Guyana, acres Guyana, cash prices, phases the returns and opportunity cost, we to better. for is covers reservoir get extraordinary capital we future XX% As our superior on to strategy getting keeps scale, the additional Guyana outlook and by clarity for as of The of to our quality, bigger is massive an investment block world-class oil and returns. X.X a shareholders. resource interest, contains uniquely financial rapid Stabroek in that that advantaged Hess where development million

are and system miles area, track discovery some petroleum a development factors recovery as on announced We discovery sixth of and deliver the this discovered the well, of block prospectivity and Also, we northwest extensive expected this Stabroek the part oil with large feet have of experience that number than reservoirs block a the high record see of which world quality increasing production operator, porosity the of a of very of the high-quality working permeability in January, with great a a Liza In prospects. world-class ExxonMobil, world-class type to carbonate Ranger-X of confirms where XX we high management brings highest oil-bearing project exploration with reservoir. more the XXX encountered rates. a This presence development.

recoverable Excluding were oil barrels range to billion equivalent, Ranger, more of of X.X billion on equivalent. to oil barrels X.X billion resources up from than recently increased X.X gross prior the of the block discovered estimated

block. have June, which day. continue capacity planned of approximately this the of exploration last X The will that to drilling sanctioned In year. Development to to oil addition, million the oil produce we XXX,XXX per develop Liza is later see of to barrels an Phase through FPSO gross barrels additional vessel development, barrels start potential was will across XXX multi-billion up

An First to submitted. of development FPSO Phase larger by capacity at a concept for Liza March barrels environmental subsea a mid-XXXX. production develop The with involves been in application phase an XXXX. systems the expected of has Liza and XXX,XXX approximately second expected have startup that production per from permit the X would is oil day

As in years at unit Brent Liza three you future with price, a for barrel The of Guyana Phase following per from will last cost announcement cash planning per our ship world closely size attractive barrel also Friday, development Phase one phase $XX $X X. may With of Payara, most of drilling. for this a development have Liza function in appraisal FPSO seen third at payback ExxonMobil's of underway an third a today. be opportunity oil the the in X investment and approximately is is

financial Now, turning XXXX to our results.

cash loss billion before was XXXX. billion the $X.X $XXX prior million from up And flow was $X.X in net to changes working capital year. in in compared adjusted Our operations $X.X billion, from

given in barrel impact Brent assets about our Rielly the we post our $X.X charge quarter this. for flow was no long-term ability oil took saw XXXX. on charge But lower billion portfolios' generate outlook and Stampede of our value. $XX to price release, we'll write-down Bells fair the to our you a an and rules cash at talk John in has under Tubular accounting per oil of price free to required more non-cash As a accounting the fourth

equivalent We XXXX, XXXX barrels oil asset of of an equivalent our Proved production Full of remain barrels by per equivalent equivalent. day was of day, Libya. equivalent, per oil forecast expected day, Permian-enhanced $X to our million Norway, North XXX,XXX we of and growth Libya. that Malay forecast F&D XXX million per Guinea during by oil and is was is shutdown barrels of with Basin. XXX,XXX per reflects an XXX terms and day, oil reserves percent day, forma with year. in asset volumes higher base which interest of partially XX.X equivalent the assets, XXX the production annual had stood And barrels oil XXXX offset production forma per production barrels of was In barrel average barrels pro reduced Bakken proved oil of from our XXX,XXX equivalent at From XXX,XXX XXXX replacement, due at In year barrels oil additions of oil of growth of Enchilada X.XX compounded Equatorial reserve This XXXX outstanding the XXX,XXX Libya. of replaced production barrels of sales over to of oil for excluding between sales due and excluding excluding cost our track yearend XX% deliver reduced we to years. in than oil just at Mexico, of reserve the recovery billion and XXXX to be production of equivalent reserves equivalent barrels Pro on XXX% equivalent of higher of production our through even to sales unplanned XXXX. Shell's XXXX. barrels reserve per per XX,XXX platform life of day million oil Gulf for in XX,XXX

the to our largest asset. Bakken, Now, growth operated turning

with application generate with play deliver the oil by than XXXX additional that to States. We are to in XX% of with enabled geo XXXX the approximately any equivalent barrels our in to approximately together net of oil and competitive returns cash sales per growth, our increased XX% grow portfolio XXXX lowers our our is shareholders. further to activity success returns return and optimized assets productivity of the XXXX of stage higher to program in focuses we equivalent portfolio wells have track on acres barrels our price average our forecast strategy, execute and XXX,XXX production of barrels per day summary, continue and growth day. capital-efficient spacing, between Bakken average from per position rigs a equivalent oil by on of generate of day costs, generation production in well completion increasing The an counts XXXX deliver over These steering, core of year asset drilling unit XX% capital-efficient and the equivalent expected have with of strengthening on XXX,XXX our in production we investment XXX,XXX to our in world-class of through averaged shale the our United years. to and improvements, profit are for will XXXX. decade-plus Through Guyana, low range to compared opportunity which In come. many value our barrels two and for balance from to last and per oil costs, shareholders oil we higher is play XX% more significant The to returns per to us years is industry-leading to online. XXXX XX% believe the a that in in XXX,XXX barrel cash two at positioned day $XX while are have per WTI in XXX,XXX XXXX and create XXX,XXX increased sheet reshaped loading, to fund

Now, Greg.

Gregory P. Hill

XXXX was by operationally. strong marked strategically and both execution, Thanks, John.

developments, in and terms interest July full and First, field Malay where XX% a our North the on time at first holds is Basin of gas we under achieved budget. Hess in development safely, operator,

the as fourth Hess The cash a During Statoil, highly sanction over up complex company. million the advanced long-term, we that intend effectively day, Hess from in with to its XX where the I'm years Malay have low-cost XXXX, months. under Throughout and plateau team, development to a our of pleased project XXX ramp asset rate the safely, three has reached and gradually for budget. from quarter, ahead generator production successfully Stampede of of first a interest. net field the operator we in working feet gas Chevron, cubic Nexen, North planned oil next of XX% field, per is achieved and schedule, partners announce the also over approximately delivered Basin establishing just January. We significant

expected EUR, in we to in Second, from ultimate increased a are and recovery, pilots IPXXX standard. successful previous that loading, XX% the Bakken, proppant which getting with uplift or confirmed of XX-stage completions XX% we executed our productivity

X barrels we've from acreage of estimate of result, equivalent EUR generate oil brought expected equivalent a XX% an a of at greater barrels of online in to our Wells Bakken increased our X equivalent. billion from returns than previous XXXX oil barrel WTI. of per average billion As to are X.X $XX to oil estimate barrels deliver our XX% of and EUR million

XX% number In well we've of per of addition, which the a XX% or higher remaining inventory. WTI our increased to more XX% than wells can that by represents at return X,XXX deliver wells, barrel $XX

is Guyana, in Payara, success sixth block XXXX working of and Stabroek Ranger-X at discoveries we discovery. XX announced across Snoek, acre Hess a feet more in the northwest oil-bearing and million well important approximately with Deep X.X up January, petroleum it encountered block. XXX Liza This where than interest, play exploration system types of has the that the The further extraordinary on reservoir. high-quality, opens carbonate Turbot. miles Liza demonstrates Third, a In in oil multiple a XX% continues Stabroek

oil Excluding to Liza X.X the FPSO were will equivalent, million block increased XXXX, basis billion time vessel gross than year. from this with Ranger, barrels gross discovered recoverable a day. which barrels barrels development, of on the through we triple first per an approximately develop for the oil phase oil XXX resources XXX,XXX In of capacity estimate sanctioned of gross more of of last June

Fourth, Liza F&D in as is Bakken, that development XX% Basin and About barrels Phase undeveloped new in Malay oil we net of executed the our we initial designs. the equivalent. with X Fifth, XXXX. additions reserves, of and an rate well were XXX% successfully include bookings replacement prices, barrel additions of values XXX North of from reflecting production in completion as exceeded reserve representing XXXX, Guyana. timing the million cost and an of delivered expected proved proved Stampede, improved of $X.X of reserve March over enhanced and significant billion organic $X in First expectations. monetizations Other oil equivalent, just per additions

a result November fourth starting X production. and day, equivalent quarter, Shell-operated In the This unplanned barrels per results Enchilada the averaged which production net of Gulf and XXX,XXX the with experienced Libya. oil down. to remains downtime fire of in reflects turning platform at excluding on Now, Mexico,

approximately operator As is as Llano and our Baldpate, Shell-operated a result, working net well equivalent fields, as to per daily restore safely Penn oil a production of barrels the production with is The of XX,XXX State shut-in Conger field production. at impact day.

unplanned full-year XXXX an day. per oil barrels Libya, we net reflects equivalent average of XXXX, net In Libya. from oil of net day an net This barrels XX,XXX the which production in oil of forecast and of oil equivalent excluding of approximately oil completed XX,XXX production day of and barrels Enchilada estimated XXXX. XXX,XXX between per forecast downtime net annual per averaged reflects to representing XXXX, the day, per from of XXX,XXX Excluding day, X,XXX XXX,XXX over equivalent impact Enchilada approximately in per divestments barrels barrels equivalent impact equivalent

to Bakken Basin the approximately reflects average first is and barrels also production Malay from and XX,XXX in and of On production grow XXX,XXX production year-over-year a respectively, as basis, forecast net production Our We Stampede and day year forecast per equivalent higher between XXXX XXX,XXX the of increasing pro barrels forecast Bakken to XX% oil in well reinstated quarter equivalent our in net Stampede. as day, oil per from quarter, XX,XXX North day, production up. net between forma the increasing the to as of and to of Mexico XXX,XXX net of and range oil per as Gulf by impacted per XXX,XXX XXXX XXXX. barrels is equivalent fourth of ramp of

the was year-ago Now, XX% of which production fourth quarter. XXXX. to the XX,XXX Bakken. of oil fourth averaged barrels for third increase equivalent XX,XXX more barrels quarter, XXX,XXX an in turning day from per per net day the barrels day, the represented quarter the per than production of Oil net versus quarter In net

and fifth doing between and a XXXX, production XXXX, In the timing rig The and third averaged sixth plan period rig quarter. per net equivalent during during oil of add the the the For in efficiency October. of barrels the quarter Bakken reflects fourth the construction during fair a permitting and May XXX,XXX we full-year to pad day. road weather

wells drilled We brought and and XX expect wells wells approximately to drill XX to XXXX. year, XXX the bring XX wells compared in approximately online over new online

factors. For modest volumes are expected volumes net XXXX. remain expect of Oil per oil to NGL approximately with production the day, XXX,XXX average reduction a the flat barrels fourth first quarter equivalent of to in we due market to quarter, reflecting Bakken

XXX,XXX Bakken average full-year X. above equivalent Longer oil term, to of growth of XXXX, between barrels we XXXX forecast to XXXX of continue equivalent Bakken by day per levels. net approximately For production the a per XX% and rig day, to our production forecast approximately count XXX,XXX we XXX,XXX barrels net steady oil maximum with

the net the net Mexico, averaged oil offshore, equivalent quarter and of Moving at of in XX,XXX oil per Gulf full-year the day equivalent production platform discussed earlier. XX,XXX Enchilada of reflecting deepwater XXXX, day the the for unplanned barrels per in barrels Shell-operated fourth downtime

equivalent equivalent production in XXXX. fourth also over a per XXXX. quarter, day we At net fourth As oil to the Thailand assumes of of XX,XXX all approximately the equivalent fourth oil barrels development our impacted per and per are barrels forecast day is net At assets we oil which averaged Basin, XXXX XX,XXX Gulf barrels XX,XXX average in production equivalent to oil per XX,XXX Gulf net barrels equivalent approximately full from for XXXX. net Gulf Mexico per when is year the day. interest, per equivalent quarter full consequence, average net the to year day average XX% in to be forecast the of the of also barrels again per Thailand, equivalent of Gulf a of approximately day which XX,XXX production to net per day net Malay of of Malaysia-Thailand quarter in production barrels deepwater production average in North day, oil production back averaged approximately online, impact Mexico the barrels oil fields area forecast of forecast In XX,XXX day. expected and of joint of of in net XX,XXX XX,XXX Net oil has Hess equivalent of a the oil barrels

to Turning Guyana.

Following has is completion Carron now X of of the Ranger-X Stena discovery. the prospect, west miles drillship well, which located spud the the Pacora Payara

target planned where Stabroek that Development exploration The Block to as of including March Liza multi-billion the to exploration VLCC, and for see and progressing drilling to exploration play on the oil the is activities discoveries crude and FPSO a Block. a later this Additional on on Conversion prospects well Ranger of XXXX. for block XXXX, are drilling will continue start also Turbot in wider very is program as we upside. appraisal development large Liza, types planned the continuing on of barrels Phase is X and first track progressing; Stabroek is an remains carrier, year. additional development

Hess Phase is of Suriname, Payara on production In addition, planning the the capacity to mid-XXXX. Scotia, utilize interest and all are similar second XXXX. exploration Liza seeing set for along four XX, In deepwater interest. acre oil to XXX with on has together Liza the and on the X. underway. approximately licenses on for X of Hess holds once working seen frontier in X.X-million seismic operator Kosmos, underway the Hess of a in the the Block prospects with expected expected Block second area blocks. XD partnered the analogous planned to A a plans deepwater Hess XXXX. first FPSO leads barrels Stabroek. equal Based Exxon Chevron with XXXX, approximately In A play Gulf to planned execution where OCS of XD day. explore XX XX% XX% fronts. is second Mexico first those per acre operator Phase to is again also of will and development in well a operator size block are follow has Hess for and offshore seismic to closing, continues seismic In development of of At holds XD XX% in X.X-million half combined – Canada, data, and on strong are a Lisa demonstrated interpretation deepwater quarter Mexico. closely is of spud appears is phase is in Nova test BP to we attractive of with of which acquire expected geology a Startup an where Gulf Mobil, the Statoil gross focus phase XXXX. XX% That XXX,XXX to A third by interest of the

post move proactive We portfolio, XXXX. will high-grade have the build curve business to taken cost a to be flow-generative down that per $XX our steps and Brent cash down barrel

Our in XX Blocks and Rielly. results continuing promises the leading future will exceptional Stabroek underline for position Suriname. material I Guyana, turn world-class in XX the over the of and by call flow. to cash we the Bakken potential to-date excited in potential into Block and neighboring are growth John Exploration the now plays extensions

John P. Rielly

We remarks I previous my XXXX million will net of XXXX fourth of In quarter compared third billion fourth provide XXXX for $X.XXX loss the $XXX with Greg. a from in in of to the and of guidance quarter. the compare the incurred Thanks, quarter a today, quarter net loss XXXX. results of

Our The the XX-Q. and of million, Mexico the based while to our unitizing the we costs charge billion, into appraisal exploration outlook and to project. fourth $XXX is loss, The the and significant a excludes in quarter from earnings million was interest includes with totaling of Form Tubular million million an after-tax to oil of Bells quarter also interest XXXX in fourth in an loss provided $XXX Fields results million our between the used charges previous fourth Stampede quarter $X.X adjusted $XXX reduction items in in line include of of incurred our which impairment Equatorial loss the both periods, where tests. related with in Stampede an to Stampede after-tax quarter. from net in $XXX in price long-term the Tubular to compared comparability related $X.XXX $XXX quarter Guinea adjusted Norway, charge gain on related billion primarily estimates sale of quarter Bells third is of Gulf Fourth our our the of affecting net sale prior

offshore with development on In not Deepwater to Tano/Cape project Three fully of based charge impaired decision $XXX addition, we after-tax Points our million project. management's an Ghana pursue that

to We monetize Ghana evaluating are options our currently asset.

Turning of new deemed U.S. broad any repatriation change any providing law. both and new was Cuts years. foreign expect We foreign earnings of and In of into anticipate domestic the Further, do December, was cash changes do not taxes U.S. federal tax the the the cash of Act to law, to signed least rules Tax on alternative we unremitted and tax the Jobs taxation subsidiaries, our the federal over minimum at tax in impact still not immaterial. five the next operations.

allowance to impact an reduction carry-forward. has adjustment. no corresponding carry-forwards and the the this from basis new exemption XXXX the previously rate XX% tax loss corporate to assets predominantly And statement December Consequently, the using which U.S. re-measurement The federal of net tax deferred income NOL foreign A significant tax U.S. tax tax in fixed relates approximate Our of tax of valuation reduction deferred a and balance or to shield. the all sheet. will taxes newly enacted under to law, continue our cash earnings for billion provide tax. our as qualify asset, net in U.S. will the leads XX% offsets rate substantially on decrease to established XX, from $X.XXX the

reduced of between of held-for-sale, mix an higher $XX fourth $XX exploration loss cash as million higher $XX $XXX non-cash after-tax $XX by third premium of results adjusted reduced by All loss expense improved results $XX of rate, the The DD&A change an XX% in fourth prices changes On tax XXXX XX% by Turning the the XXXX in million. seismic and compared quarter. to the costs an costs, the by reduced by other the for million improvement volumes on of a results Libyan results oil improved by a for net due specials components net The E&P results income incurred quarter million XXXX $XX reduced fourth million; of third adjusted in operations, realized E&P quarter results assets excluding fourth follows: of to and results quarter a XXXX. $XX in million. in of collars of quarter reduced billion; option $XXX million; E&P with E&P. of selling lowered million; by with results expenses, amortization effective $XXX quarter in of third were sales benefit results primarily accounting crude primarily expense items overall was million; for the quarter higher compared basis, the

Turning Midstream. adjusted $XX million third net the the in of quarter in of quarter and third compared the $XXX to XXXX. of million segment EBITDA, the XXXX. Midstream non-controlling Midstream income of to fourth specials, in to The million quarter had before quarter income $XX the in net million to fourth interest excluding $XXX compared amounted

$XXX million of the quarter a net adjusted Turning of interest. compared in expenses to corporate fourth the quarter third and After-tax corporate interest and XXXX. expense were $XXX in million to

stock flow. million. operations changes approximately quarter by were $XX net operating Turning retired the cash in $XX $XXX decrease resulting dividends reduction were million. fourth from paid a the from were cash and the $XX Enchilada were flow a was Distributions to by $XXX borrowings Common assets to and equipment impact million. acquired items by and million, were capital Changes stock other in cash was sale million. million. $XX Additions preferred All increase net cash of in property, interest in in working non-controlling provided a the cash before fourth of flows quarter shutdown reduced $XXX Net of billion. capital $X.XXX billion. working $X.XXX and quarter million. operating activities to increased $XXX were cash in equivalents million. plant We Proceeds Common $XXX million. to platform from fourth cash estimate Cash of

Turning to our financial position.

for and sheet and maintaining committed debt called on a of principal for $XXX with to In providing $X.X focused principal $X.XXX redemption were total in an cash to and $XXX a equivalents of including debt current $X.X available a $XXX billion, of plan our liquidity remain we credit X.XXX% of balance and million repay Midstream, we amount cash shareholders. reduction. Total facilities; was amount strong XXXX debt billion. notes returns million, due We additional billion. February was in million XXXX Excluding January,

announced million We $XXX to of We XXXX. quarter to and previously million common continued purchased $XXX execute to also million stock. purchase our of remaining during repurchase of plan the our plan $XXX XXXX the stock in fourth

cost reduction program. to Turning our

of effort, we annual portfolio million. $XXX of implementation and organization restructuring part As our have an reduction of begun cost savings reshaping, targeting

head of January we In and $XX positions XX%. and the direct count million employee in employee quarter. as reduced have been asset first to million $XX and sales, of XXX approximately addition end approximately total our positions to the Since contractor reductions employee expect XXXX, contractor of by severance record part eliminated in to

In logistics, and the million other begin portfolio information further reduction, operating cost workforce cost in fees over we XXXX. the result a technology, reshaping. annualized to be of $XXX addition The identified realized property, this professional from benefit will have half our of second to as cost reductions reduction

to quarter full and turning first guidance. Now, year XXXX

actual metrics provide was XXXX the of give equivalent I $XX.XX per impact of $XX.XX forma actual as barrel barrel. which financial pro year. during of year I Before Pro removed sold affecting guidance comparability for the forma of that of cash earnings, per will costs excludes items XXXX, assets pro versus per DD&A oil $XX.XX compared and barrel, were per barrel forma results DD&A $XX.XX to full

This to first the quarter cost of our be rate, per XXXX to DD&A our is be of be realized In pro decline quarter of XX,XXX tariff resumes to are of X%. a cash $XX XXXX. higher quarter compared in Exploration E&P X% cost approximately to the XXXX a first for full the be the full of $XXX of our excluding forma XXXX, of in million the production, in project expected $XXX tax pro barrels of compared million X% year XXXX. total in excluding for the of the and barrel, Midstream from Libya, of be per projected results XXXX and cost range reductions $XX The of to barrel three in million for the which per low expected Finally, E&P remaining range as per be year be the cost XXXX full first the hole cash third-party to barrel. barrel costs due a to which The $XX.XX benefit barrel. $XX.XX equivalent oil of our $XX XXXX tax average equivalent first barrel. to operating volumes. unit of of approximately forecast to per down fire, tariff expenses, pro to XXXX. Midstream of projected down the pro to benefit is of per million costs to DD&A Midstream as excluding of of forma fourth to in $XX.XX costs, range to dry versus is for $XX effective the tariff related with per second $XX million $XX $XXX to and production expected range was the barrel from to from Hess-operated Enchilada to the day full of $XXX significantly in forma the of $XXX the unit benefit be of pro cash $XX quarter shut Libya, $XXX and X% X% benefit per forma of begin barrel year XXXX cash to year during are million the in to and to half is to million of in We We $XX as fully quarter, $XX.XX million Enchilada year. The our due $XX forma forma to year in first XXXX cost of for reported rate, the estimated up of pro be specials full XXXX, below year quarters is year to is full per barrel, an XXXX. quarter and and projected oil for cost project of per lower the cost impact E&P for

earlier, crude for we have oil highlighted price to As hedge XXXX collars production. risk

contracts, reflected XXXX, approximately selling will our income and range $XXX the our segment Midstream, For million in Hess in In $XX the Midstream $XX the anticipate net which be from per to by full in of million to premium quarter. the in from year will amortization we $XXX for XXXX, realized the we to expect approximately quarter. attributable million first these non-cash million prices, results be reduce

million Now, corporate We as capitalizing in for million quarter. last million to to higher year commenced in $XXX which million for $XXX and XXXX, expense $XX the be the XXXX, which range for to than be down expenses interest, for corporate of not of and to the million million the first of interest is in January. XXXX $XXX will in we we full interest expect range the to project, $XXX of full production year the for year Stampede estimate be $XXX from $XX million

expected expense any million. We'll the turn to over to the $XX $XX quarter happy now First is be questions. be will to This my interest remarks. concludes answer call operator. to million I

Operator

from the Fargo. Roger of Wells Read with comes question first Your line

line Your open. is now

Roger D. Read

Hey. Thanks. Good morning.

Gregory P. Hill

Good morning.

Roger D. Read

up little the we here if going a talk to that? XXXX. improvement deliver performance factored more Six could on much XXX guess, rigs in is growth How level bit Bakken. I in maybe to in your well by the is performance

Gregory P. Hill

Yeah. the Thanks question, for Roger.

IPXXX a from As that our X design, XX% completion pounds improvement has new at in per and stage, in which to move EUR opening uplift our XXX,XXX resulted a completion That in rigs to we remarks, XX-stage, also new rates. said XXX reflects XX% is design. that

Roger D. Read

additional something not design, here? that from solely So

Gregory P. Hill

No.

optimize. we to continue think I

completion techniques. at look other to continue We

limited plug-and-perf control. industry For the points example, perforating, being we're number continued a this to doing fracture very is large entry the good very some is, entry allowing in has on Reason with of particular improve, as year. plug-and-perf, pilots

looking pilot we're that year. and going of And so, that to some are at this

But certainly, we're experience be get plug-and-perf our need outside a could know there going core. And do move potentially, to that So, we belt. to that. have under we more to the to

we begin with really stuff. experiment that why to to want that's So

Roger D. Read

broadly at your of outlook as Okay. think about price cow, we there? operations and of from so kind cash on as the for from you of XXXX NMB a maybe at cash XXXX, as that. expectations Gulf all Mexico think you to $XX referenced oil frame maybe flow we just And kind those and the about the look just cash here, Thanks operations then, Can to speak.

John P. Rielly

Sure.

generators. So be now to NMB are with free online, assets coming Malaysia going flow cash our significant

You see to going gas price What because goes now we JDA the to of oil actually we is price be have. back XXXX Asian the can prices. that have gas in lowest, guess, the it I

have prices. increase XX in continue prices. will And far So JDA's prices XXXX of oil price then so with September only XXXX, a then, higher, will and increase. Basin obviously, the going basically it getting XXXX, North has lag we'll to that to on through price one-month Malay

of So seeing Basin. right we Malay gas benefit that the our in are into North prices reflected

in So quarter, Basin, is that if number North that JDA the average basically, Malay fourth you that significantly looked and at below above average.

free will because Malaysian significant cash XXXX capital seeing flow into slowly from you and XXXX in that the we're actually bringing And assets we'll Basin. in Malay So North continue start as the XXXX. move down

– as from third far rigs to a so because the Bakken bit in flow the Greg are the rigs. the one quarter. third the one the quarter, fourth year, said, in and are we moving coming in Bakken cash the goes, as sixth we're this As actually reducing fifth six And

and really are in So flow the rig fifth are that sixth XXXX. wells cash the impacting by or drilled production not

production So in and uplift we get the flow XXXX from cash on that.

always heard then more of Greg to cash then, cash flow is significantly growth significant free So a about, give talked the while piece Bakken it'll Gulf the in XXXX. this obviously that us. Bakken. flow, flow of cash other And will generator from And will our It's increase be business generating that obviously, Mexico. with that been you free begin just for

We production I flow do this reduced for you a got million $XX XX,XXX affect in, day. in being about the Now, so to fourth shut as $X deferred so capital being Stampede is from which, about use barrels quarter. is was the It's day a have guided, that coming cash reasonable you the online, the million prior year. from

a like ramp continues between It Mexico as we going So barrels. of to XX,XXX Stampede half on is cash you're million now on is be bringing and Gulf capital $XXX a million $XXX getting, up, somewhere But to generator actually in significant and year down affecting flow XXXX. be basis, continue to there. us

So kind the how in of flow our portfolio. that's works cash

Roger D. Read

you. Thank Okay.

Operator

America next is Our Doug with Leggate Lynch. from Bank the of Merrill line question of

now line is Your open.

Doug Leggate

Good you. morning, everybody. Thank

Gregory P. Hill

morning. Good

Doug Leggate

the assuming give year cadence Enchilada of assuming if of on half the could you are you're us the mean, rate an of cadence both you kind give first so on please. I what But sounds those, and assuming. for for John, what – some I wonder the Bakken? idea wondering if Stampede for I'm could it down exit you as of for like you're XXXX is

Gregory P. Hill

Yeah, Doug.

talk first. Let me Stampede about

We on will gradually over production bring the that year.

Penn The finally, on Baldpate. on State the The on That'll is And on of first the piece quarter. towards then, quarter. quarter. is will will that come will the Conger the come is come second which come in third end that next and thing first in Llano,

sort the that's cadence there. So of

that By back production. all fourth we'd pick up So certainly of comes on. quarter, all that

kind quarter. day of a quarter. about And XX,XXX the first It's the quarterly in come XX,XXX impact barrels it's if XX,XXX quarter. third up. gradually of it'll Gulf the the Mexico, in in about of want you So a about second It's

got there. into cadence producing gradually that over the to year in Stampede, of we're We'll that's of continue terms producers So producers going next And up now. and drill capable the to the XX three We've throughout then, ramp XXXX. months.

production. to drill bring production, year fourth gradually And mentioned, and as quarter, quarter. our we quarter, its overall XXXX will continue in the climb the we barrels will remarks, and mentioned then, in we'll be on in additional in strong the And that this very will Stampede then So whole strong going the to fourth I a our that bring obviously. important then, the climb, as opening continue up. average about think, we the its And very producers XX,XXX those the day thing is I we think fourth increase is just quarter production exit first from year net

of barrels So, net fourth equivalent equivalent first quarter barrels we're the oil per oil year exit the going in XXX,XXX XXX,XXX net to to to the per quarter, whereas day, XXX,XXX of day. XXX,XXX

over year. significant a the that's So increase

Doug Leggate

Okay.

depth rate? clear, had the to to any just the on the you are you seeing. I'm if the there first you're weather what Just on Greg, exit in assuming given be Bakken, wondering impact quarter, Bakken issues

John P. Rielly

the we the the quarter first flat And be didn't from said, none of In fourth this oil some the It's quarter. had quarter, And that impacts issues. as first way, above-ground volumes. have ethane we Again, is, is by to No. Doug, NGL we any rejection. it when will weather Greg what we as in amount that gas just way of higher actually we're But our the the to to gas up results. financial the processing first having, rejection some the you prices. fee. NGL well that there ethane It that had was volumes get process as our quarter works

prices So are NGL volumes if the higher, down. your go

We some So there's weather, from see difficult There really really was impact. didn't no at impact but at beginning. right weather. some did all it the

net it's be but some our Bakken day oil we in early to As the I saw, the you high of year. of we impacting the in there's over growing asked you overall will guidance would barrels per XXX,XXX impact the quarter. came not on at said equivalent the volumes. And, yes, in And – end fourth think XXX,XXX January, really

that barrels the higher range have it's than obviously, per start XXX,XXX net going you of we at fourth oil there. day. time By equivalent get be to So, the you quarter, that to

of So at the end range. it's that upper to be right going

Doug Leggate

go John. Thanks, My – on. follow-up

Sorry.

Gregory P. Hill

XXX,XXX of oil equivalent Doug, in the barrels quarter. net day, fourth Yeah. per XXX,XXX to

Doug Leggate

strat billion. follow-up, is that interrelated of is at if My X.X versus what you is guess in you yet may. you. Thank Greg, the not got plays of I carbonate the I Obviously, implication And can on us the points, Ranger. the Guyana. a Greg, couple tell

development. you now public. Hess. of guess, an Exxon Mr. us be implications for is laying is could be that it in line The seems my follow-up the And I idea John, – a would PSC there. give sight Just now out what

reset like you else pretty because do Thanks. spending fairly leave here it what So, become requirement the see to I'll always is it's to buyback transparent need or to the program going soon. there. your allocation

Gregory P. Hill

Yeah. Ranger. first go I'll Doug. on Thanks,

oil-bearing very of significant So, XXX outcome feet obviously, very block. for Why? Ranger carbonate high-quality the reservoir.

from The Secondly, it's is far of working is play says terms play certainly which working located that Liza, XX the Liza. miles that of northwest charge. away in

third on working. of we I the block, carbonate think that the see the system is carbonate that so additional is that features number a thing says

it get to But those Guyana wells even very well. got we've eventually. in obviously, the potentially well for bodes in Suriname as and block Now,

Doug Leggate

Okay. Thanks. ahead. John, on the – go

John B. Hess

of production engineering size delighted start about would make and the that your and no, an be further to production call our on Guyana third that question, with The on that would gets we Liza-X. Exxon would is It Payara have day over Doug. that now. that a in opportunity drilling a And start thereafter their appraisal starting and better. Look, function that of And second Yeah talk we're net that on bigger happy – barrels FPSO drilling, from quarterly investment last obviously, I'm right truly to come shortly in Guyana. Mobil announced of a interest working going barrels XXX,XXX a FPSO, also, larger currently Friday a be And XXXX. extraordinary they XXX,XXX we're announced oil XXXX. by would ship, day

get is, capital transparency is the point need up. as going transparency, is more your So, we the

to And $XXX that's need would those million underway. in to so, our consider definition before oil the adding we get share we repurchase some costs and more price program already of

that oil the most is return important it in I are But the but of that. and investments distinguish are FPSO company for world's on on is our phenomenal, visibility the to capitalize just with this prefund returns cash thing financial extremely And to X and come. X, have not work more some going we from industry. we So, FPSO and think those it best to one well many a years positioned the to

And it. in to that's priority. second and We be position third have to capitalize on our first,

program FPSO the the to the repurchase that's serious As a get X underway little be add to on already. engineering FPSO for will X, and defined share bit consideration costs more

Doug Leggate

Thanks... right. All

Gregory P. Hill

Doug. Hey,

Guyana. on comment other one Just

Ranger up in that it given play northwest entire addition It's miles about also is which petroleum If the and Liza, you carbonate. opens to working Liza is then which types. highly of think of extent, Turbot, have you south over other the system east XX XX areal prospective is been miles

types block So, there's as play on further the well.

Doug Leggate

Thanks, guys.

Operator

Our next from Goldman is question Singer with Brian Sachs.

is line now open. Your

Brian Singer

Good you. morning. Thank

Gregory P. Hill

Good morning.

Brian Singer

up earlier. to there couple follow the of questions wanted I on a

XX development other on very the two you you more First, for it anything order Or will necessarily every schedule? it down the months FPSOs not and have see happen resource discovery this to have the – conversations could i.e. to when that what, that would Is schedule, on if do see accelerate discovered, the XX type and staged in that to development time line? moving there same an you for or as operator Guyana, at definitively and anything, the same been you partner every has much the be is there? make in take

Gregory P. Hill

there, comments Brian. Couple

of drilling I think, did appraisal Phase all, mention big is to to we first that really further some going required X define be. how that's

first the step. that's So,

to really say, phase to capital the going the think approach, this a that parallel, same a et And Mobil and three project construction efficient the the Guyana. step right? phased Exxon do efficiently do such et versus, view how develop second certainly, do things massive continue team I just that very it in development that the very use of you and it where Nexen and and this is in to way you relates to is way cetera right in cetera, resource us resources, becomes

John B. Hess

they're as or for for which is Payara opposed to XX actually and XX months to X progressing mean concept Liza in selection Exxon as could their said And Phase planned XXXX that startup XXXX months. there the call from XX

is getting is we Brian, finalize appraisal of to that, to definition be. the going this efficient able obviously, And process. the Exxon in be definitely ship what more of that size line So, need to the drilling assembly

Brian Singer

in and That's underlying I'm what the the Stampede is. changes been Gulf QX my the some those then your XX,XXX, first XX,XXX of numbers? you missed great. to quarter, pieces moving QX whether wondered in is an Enchilada the earlier out in just XX,XXX in follow-up third of trying quarter. Thanks. piece then, any versus Gulf QX that I rate to together some falling maybe get numbers question, And to and also the and think, quarter, but that I response threw regards is that's and production of of sense decline the total with in the Mexico. of or I second maybe there's And platform

Gregory P. Hill

Thanks quarter-by-quarter. that Mexico impact fire No. question, the production the was the What Enchilada of of clarification for on Hess Gulf Brian.

cadence on a average barrels So, State in in again, where a on day XX,XXX finally, come barrels reflects in And quarter, quarter Penn QX, the the average second about, XX,XXX and the that comes third I QX. comes day off on then, the last it's the production that average first Baldpate on it's and then on in in on a Llano QX Conger, and quarter. talked barrels piece, XX,XXX day

other So, the that's Gulf of in what that And of Mexico reflects. the the then, piece Stampede. is equation

a started XX We in to first just months. over in ramp quarter We're gradually very slowly. been I've a That's As slowly. learning big the going those average day. wells that going some-XX,XXX industry need January. on will we ramp oil barrels up said, up these that's to And fourth for you to bring very

the So, Gulf that very trajectory The decline shallow. is kind gives of you will the Mexico rest, how of of go.

Mexico a So, decline in is factor year. big of the this not Gulf

Brian Singer

you. thank Great,

Operator

is Advisors. question Heikkinen Hall Michael from with Energy next Our

now line Your is open.

Michael Anthony Hall

Stampede the Can like you'll guess production think you kind look profile number follow-up of just prior final the Stampede. more that? one mine. on reach But me remind – when I do final question on Actually, Thanks. you a hit just what would of peak and

Gregory P. Hill

to get peak the wells so will days. data Yeah. as And think specific Michael, is dynamic what we what before we as it's be be. we'd like on some early rate do these

we said, months. this will I've up As ramp XX next over the

we data, – So, January. guidance this on wells as thing some we'll able in rates. do be see what started peak going to are that Then, more we dynamic definitive just give get the to

Michael Anthony Hall

really at moment. all I the have Thanks. enough. That's Fair

Operator

Deutsche Bank. with Ryan Our next from question is Todd

Your is now open. line

Ryan Todd

undiscovered talked couple you for the the as with the mean, for too position portfolio? of Asian you point? process Maybe as rest are Guyana all? a look about Would the farming you assets consider Thanks. resource portfolio, current me. in of the consider of the to where or assets down you across this could Great. happy the modernization are much Or you is in a state still at you at selling I any Denmark, there

Gregory P. Hill

our we've portfolio. Yeah. pretty active been Obviously, optimizing

We there have always open We're an mind. value. maximize to

to growth in a engines the generators with have we board Guyana strategy the along the on We that in have the worked and long-term cash Bakken. and portfolio

always an we've it. that, the We make to maximize program, have got a have as past. mind do the balance focus the will Guyana exploration FPSO got Guyana active on and opportunity to strong we to gets we've pretty in So, and cash a capitalize sure don't we the Having shown and sheet we better FPSO company funding have Bakken. the the that, for that. to open in investment is now have And value bigger way, X being we to said for defined amazing have major and as and, a and cash. pre-fund We with by appraisal X deficit. the And

To we the portfolio we certainly of it the in funding focus the thing is right for be shareholders return much if high more And it, and in is Guyana industry. would the thing our of on one the and wrong would our of opportunity returns the to in selling and that So, get sell investment could part the there. not Hess' But be probably do. finance best would. because that world-class investment best more

Ryan Todd

strong clearly, X say And rate you Thanks. think I drilling million I you talked the barrels? be mean, across have an That's the X,XXX of Bakken. very well in average will you did do the over And what clarify inventory per EUR on have XXXX program – return maybe EUR an high that the of helpful. about? of average Can you very well per would one well results. follow-up that estimate

Gregory P. Hill

Yes, let you're program. So, the with start me correct. XXXX

north EUR? better will design. our There's then, about year can design in substantially moving XX-stage XXX,XXX you this wells so – That's of oil. this can do EUR barrels XXX, also, completion million as from of year or a our average current pounds. of day – north of our portfolio completion do And a is or it with the IPA that be what million cumulative in to result Average portfolio over X so if generate that that X we was barrels last of XXX,XXX IP So, XXX of where think is barrels X million. now,

Ryan Todd

Great. Thank you.

Operator

Our is next from question Paul with Cheng Barclays.

Your open. line is now

Paul Cheng

give – Hey, you guys. to going production the when that built that guidance, in is the timeline Greg, asset is Good sales morning. Or... be some time done?

John P. Rielly

have... we What

Paul Cheng

the is there? in (XX:XX:XX) production

John P. Rielly

barrels pro day, took XXX,XXX numbers that So, we the the Paul, in that – gave a out of assets only XXXX for forma we the sold.

we have and year. in Denmark guidance production Denmark So, is our in there, next

take it barrels So, if out XXX,XXX, XX,XXX XX,XXX you take wanted if out barrels the XXXX could to of of drop production... to XXX,XXX our you and

Paul Cheng

Okay...

John P. Rielly

comparison. just were doing If you a

midpoint is forma of sure to that right XXX,XXX make between want our when our pro just that, and the at I XXX,XXX, everybody looks is So, XXX,XXX XXX,XXX. now

add the had getting we're pro growth to about into effect that Greg XXXX. continue the If will you talked XX% XXX,XXX, that forma to Enchilada that

Paul Cheng

so, the when prices. on down price take that Tubular with have Okay. you really what those say costs of mean, in based And, carrying Can and using? us you still weight lower mean the Stampede significantly – is two? what down? John, is I you you're that you commodity I on Bells kind share

John B. Hess

of a that crude have outlook we be our specific let's from with the So, with to on going on what But just exactly oil we are – through board. we management standpoint – doing business. not start I'm went and price the the

business, cash $XX free So, flow from track for start-up, are on at that. able managing our we as generate post way well a to we the said, $XX and management to Guyana we being on and standpoint of are

this with under by forma per production cash pro $XX. fourth quarter our said, plus again, going So, year, XX% as costs, I growth, the

costs cash now flow. cash down we'll our generating $XX XXXX, by that and, to again, So, free have

cash reductions, So, general, of second in And then then, getting the in XXXX. to the as effect per get cost even with drop going lower our barrel the we'll costs it our start that into relates will year. in We're move to, where full we're half even that annualized going we just XXXX. as

Paul Cheng

the where the that the John, corporate or they to reduction, Is to show see up million cost just in going $XXX on of going are you're the cost what the it or most? benefit? in line item operating the item upstream

John B. Hess

corporate. in – my you you for if guidance What noted saw

take what corporate So, $XX you if about our in reduction million the guidance. corporate actually midpoint XXXX already in see a you of expenses, just our is

severance going be settlement have to There'll So, charges. that to we're right impact We're now get corporate. in pension charges. beginning

cost the So I the with I two-thirds we the tell things like talked just get operating time be and about round numbers, end be savings labor-based you is one-third that this, general, using to that But Paul going I'm about. in going – of what then – would the by to going to other the of through. is

labor base well. operating within within in and even that go costs corporate and E&P as too, G&A, between will production also exploration So

of So that spread we it's the items to kind financial be line our throughout statements. have in going

Paul Cheng

cost – Bells Can tell us by cash and you year XXXX? may Okay. operating the like also what and year Stampede this look the Tubular is that

John P. Rielly

will its cost at ramp, said, Stampede, operating per be barrel obviously at not Greg as regular will the this slow for be beginning. So, right? there level cash So

Mexico just Stampede when and cost up bit to that XX,XXX $XX But of be itself like said, fourth you is get barrels going as higher. a will you as be quarter a So fields, day. the Greg cash below the Gulf is, little to all get that to

because just always again, operating little that low-cost facility. Bells we good we've So, higher. environment. of is is leased And a Gulf said bit a Mexico Tubular

asset unique have Gulf the that's one So the of in you Mexico.

that. rate. So will that But hold that Tubular at Bells is above for $XX steady

Paul Cheng

into And In hedging, day that two right? about final one per hedging barrel haven't XXXX, for or we talking still me. One, any on XXX,XXX also has you extended additional been are changed? the XXXX,

John P. Rielly

Okay.

no... is there So

Paul Cheng

to you if wondering make develop? say, you am changed decision not on lead to, I And can what Ghana, comment have and the

John P. Rielly

Sure.

backwardation curve. from in added confirming XXXX, in with not the we So standpoint, just point XXXX any hedges that, basically have in hedging the your the

is release. of the for have collars So unchanged. we back is correct, XXXX. barrels XXXX, the XXX,XXX on in in per it It's that It the day,

Gregory P. Hill

being But And, the oil project, our to in in good a $XX highest compete cash Brent Liza flow for Paul, comes to project, relative be disciplined of have. it's committed capital a the quite projects, a as strategy on. Yes. that Ghana, to there. just and terms return is X invest price And, generative There's at asset. while opportunities investment frankly, post we can't Phase XXXX, good capital other

monetize looking currently we're consequence, options at to our Ghana a asset. as So,

Paul Cheng

you. Thank

Operator

Arun question next JPMorgan. Our Jayaram with from is

now is open. line Your

Arun Jayaram

Yeah. could bridge other just forecasts just Quick segments. question. the for was you I if help production wondering the us

– talked about quarter barrels us in Utica guidance And well I'm assuming of the the Bakken. XX,XXX a I Asia was U.S. barrels You Mexico. for XXX,XXX as first wondering about day that think the U.S. day implies help Gulf the just can onshore, for a you other your if about for as QX?

John P. Rielly

say, the just biggest trying first the to asset is number, quarter to number you're change obviously quarter bridge, fourth If let's our sales.

off. So Then, the off barrels we've sales, to XX,XXX you the have. XX,XXX barrels day, have you day that asset take barrels day Enchilada relates XXX,XXX as we XX,XXX a to as barrels got the a on a take day that approximately versus a it mentioned, Greg if

X,XXX So barrels take off. you to a have day another

You've X,XXX have Bakken, that's barrels picked down. decline. So up the right? will a Utica

Utica we from the approximately day declining a have So X,XXX the quarter. barrels in first fourth quarter

As capital have, DUCs completing come we of our you the until end and that some release, probably be that saw year. really the in in we won't it will

see Utica won't production. that fourth until You quarter the in

difference the that, you and So bridge quarter basically between quarter. fourth the with first

Arun Jayaram

of terms could That's think better? any maybe in just XQ, Bakken, about or year made up the full the Is commentary affect on in as to follow Bakken? there NGL the John, you little effect is that to just bit the And, helpful. just going that us understand you help a we

John P. Rielly

Okay.

there line effect for on So our first bottom thing I is say, items. these have to two no

that So can one getting buyer they're on can standpoint. takes from our who the execute our and whatever what and pricing first benefits is based their ethane ethane, reject

ethane to would produced. that However, they economic have of amount that we do the pay have us

through from first we'll volume just ethane a again, have in the our just So, volumes NGLs flowing standpoint, quarter. pure less

right one. to away go basically that's and going So come And that's back on.

increase The second in the is one NGL pricing.

and set heard contracts. you've some then we it got POP contracts percentage So just that think as probably And processing about of proceeds only works or contracts, it the gas have. you've on fee, a of

get processing what NGL actual fee. to gas satisfy that is we So volumes

So you get go as less NGL volumes. up, prices just

your you satisfy amount gas volumes same to fee, the get but from processing just You get it. less

stay the So is then effect. as as fluctuations wells little big. latter If shouldn't get that towards It Bakken, be And the a quarter-on-quarter. the down, be part and more year up increasing ground. to go just of be It's fourth through we big quarter the prices again, we'll prices real first said, same affecting bit adding or a you driving and have come number. quarter, some will not that's from going the above key the Bakken

Arun Jayaram

Thanks a helpful. very lot. That's Okay.

Operator

Pavel next question with Our Molchanov Raymond is James. from

Your line open. is now

Pavel S. Molchanov

Thanks the low oil that have that the might weeks published. ago, a and a to for those of What deepwater look say, $XX attributes those question, how for And breakeven? Few Guyana I at below terms are project taking guys. that can who production investors sharing key the suppose, contributing the price barrel? a agreement fiscal terms breakeven are of were fiscal

John P. Rielly

Okay.

it's the and attributes not So terms, overall. with have Guyana so all me the start to you fiscal – even let really just just

find The fantastic. we permeability obviously, Liza reservoirs our size So – scale. are seen the geology, The the the have, fantastic. that just is you've

as compare, is basins depths other you low and the in the drill just thing, So The there's shallower; other that world, are that breakeven. no around plays you thing that salt. the to say Guyana next much the let's to into getting

imaging less is So and standpoint, casing from that an helps; then there strings.

exploration like in less, the Mexico-type the let's obviously in would to as a offshore. from Gulf cost I you compare, the the mean, So of point and wells wells development low say, We're just also aspect. cycle clearly

are rigs yards again, are work, looking looking for So, work. for

for just obviously, just So a developments in all hitting cycle. our point right Exxon are it's And the blend of then is this, getting the terms. at costs the fiscal that the

contract. production-sharing a have you So

for contract. It protection. investment you start up production-sharing downside So encourage from companies. oil That's with any to set just gives what it's

So you oil lower, you as from more that get recover because go get barrels the prices cost standpoint.

and impact. are for production-sharing down And then, that get general, breakeven, of out to the Basin, just giving cost. And prices on as really They're with to get the along go that Guyana in government you you attributes again, you low see. unique allow website cost terms the that So this breakeven there. people the

Pavel S. Molchanov

Okay.

a Let me dividend. ask the follow-up quick about

that proceeds share One for a it given towards that or and Should out of called a I has your are deployed well-known you elimination scenario? the more dividend take ruling shareholders cut as buyback.

Gregory P. Hill

No.

feedback a a is on our think importance show should our shareholders, ability a all cash. put future of talk a and generate of number dividend what our to you degree high I and as shareholders that we as take of to confidence of in our that

So our shareholders. we to all talk

than the referring our of to. have communications there are views all shareholder one you And other were with dividend shareholders. about We that ongoing

Pavel S. Molchanov

Appreciate it.

Operator

is Herrlin question now with Your open. next Générale, John line Our Société is from

John P. Herrlin

Hi. Yeah.

you X. Just December, ones Liza on in buy still that or would When would John, were was in we it Is how think But drill. for Greg FPSO case? Guyana. longer Obviously, out had reach a had mentioned the two took then, you on carbonate that much play? faster is TD the the other mentioned quick Ranger. for possibly you the drilling the do And carbonate to question well. It cautious be

John P. Rielly

tricky. downsides have let first. discover was of been drilling in very very drill. But me the cautious carbonates of as So, well answer this potentially be Yes, can the John, there. we a you know, question that Ranger it didn't could the any

I the improve think will lower we will on time certainly cost next drilling the Ranger, appraisal well be of So the anticipate and obviously.

to that have But the been but aligned made. ultimately right? to that the Regarding don't pay operator uplift decision you lease so want these X, purchase been financial the to Phase boat purchase on things a cost, standpoint, ultimately has things, it's from certainly, you'd just on the with think has we're decision made. better these I not not that So,

John P. Herrlin

With Guyana, are for that's room? it a And you Okay. opening Great. data me.

John P. Rielly

Yeah. The I process Guyana to ongoing, further on that. and is wouldn't want comment

John P. Herrlin

Thanks, John.

Operator

for today's your you you conference. concludes Thank participation. much. Thank very This

day. You all have Everyone, great disconnect. may a

Hess (HES) 5 Feb 182017 Q4 Earnings call transcript