HES - Earnings call 3 2022 | Hess Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2022 Hess Corporation Conference Call. My name is Carmen, and I will be your operator for today. [Operator Instructions].

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. proceed. Please

Jay Wilson

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

and conference Our morning earnings federal known contains securities Today's subject statements of and and this statements projections call to appears on laws. such the release Risk our website, the set cause was from annual meaning reports other forward-looking issued unknown those are within These section www.hess.com. implied in and forth Hess' differ expressed those include the to uncertainties statements. actual that and risks results filed Factors SEC. may of with in These or quarterly the risks

the Also be our A on the non-GAAP website. supplemental differences in may discuss conference and GAAP we these the on reconciliation directly measures financial certain most non-GAAP found information comparable can of call, financial provided between measures. measures today's financial

Officer. Operating any on posting Hill, with each remarks John www.hess.com Rielly, On Officer; the Executive the speaker's now call presentation. Hess. transcripts are following Financial turn Greg case Chief line to John will over I'll Officer; prepared be and issues, Hess, we John In me there Chief of today the Chief audio are

John Hess

our conference Jay. and discuss day. about our Welcome our you, million Greg call. results. barrels then approximately will pre-COVID XXX progress and oil strategy. some financial Hill levels review to Global returned Thank to per in share operations, Today, Rielly our the third morning. will then quarter I demand markets review will of Good thoughts oil has executing John our

at X an its China economy, we driven day, environment recessionary with million to world barrels look air increase reopening expect grow slowing to per demand we As even global travel. and a a XXXX, global in economy least oil by by and

little million oil potential $XXX deficit for the reasonable expected capacity to this levels, to markets facing very continues year and Energy to get gas each the the world. the supply hand, there needed. Agency, global on and with is were According world tight other tighter approximately further oil are spare XXX is approximately Russia is production global in over invaded billion oil up is the the sanctions to next a investment with even exports. oil estimate to are needed global struggle less structural on a and The significantly Russian International supply XX than meet investment even before more barrels for demand. Global supply years. demand keep inventories and Oil pre-COVID winter, Oil Ukraine for

seen The and International tighten the demand Agency's next ahead. years reaching will needed for last of over growing significant addressing in The supply zero by oil of Energy as In XX% X have scenarios, by for years challenge about global Outlook the provides come. XX XXXX. years to multiple will scenarios Energy supply underinvestment, net the and dual all gas World be decades grows IEA emissions which global these energy oil

and oil and affordable, invest investment in have policies encourage an also government secure just discourage that need energy than we significantly And gas. ensure to to transition, more it. we So must rather

In gas to very a and decades come, will oil need Hess positioned. for low-cost world resources well that is reliable

social maintain growth disclosure. and in high-return supply deliver flow Our strategy the environmental, cash low at industry-leading leadership is and and our to resource performance industry governance a cost time, of and growth, same

both come, by our Our for growing years has successful execution intrinsic to positioned uniquely cash deliver of to this returns. to and value value significant strategy shareholders company

focused profitable highly and in locations our By in years. Deepwater low-cost over Guyana, Guyana With can on online and Gulf more X production oil XX% growth investing than robust built the only of inventory of differentiated drilling coming high-return Bakken, high-return Mexico Bakken, and the deliver developments annually in of we of multiple low-cost next we a have Asia. portfolio Southeast opportunities, phases the balanced

high-quality will resource our base As expands, we the cost steadily down move curve.

sanctioned oil of $XX and $XX developments Brent a price X Guyana barrel. per breakeven have between oil Our in

of growth, In a flow Based terms story, flow we proposition. of have upon flat of an cash forecast industry-leading and story barrel, change our oil price will cash a strengthen is rate XXXX approximately Brent to under also debt-to-EBITDAX our value as between unique expected per to as with durability providing XXXX. more to fast balance in our continue line And XX% Xx XXXX, top by growth. annually twice to than increase decline and sheet $XX

coming free cash becomes remainder portfolio to up or cash annual our the to the with our going to by shareholders of are As committed balance the flow in flow we our free increasing position positive increasingly years, sheet strengthen our debt. reducing further XX% to returning cash

earlier the repurchase $XXX this intend continued repurchasing fourth we repurchase year, quarter, and $XXX stock repurchases part We common the to stock of million remaining of the in million the million stock third during quarter. stock announced of program $XXX as

we low is Looking to level price to investors, dividend oil ahead, attractive plan income-oriented regular environment. but continue our a sustainable that increasing to in a

Key oil cash increases free Guyana, one in industry's according growing to the our highest prospects carbon intensity the gas years our a Mackenzie and to represent generation lowest ahead, of growth return proportion highest repurchases our data. will flow of Wood strategy and of steadily As share margin, capital. is

Block. of in oil ExxonMobil to storage production Block and up operator, the on where XXXX than XX to see has barrels per and for to XX% Stabroek vessels, X floating production the is offloading discovered day X resources of Guyana, we and a or in FPSOs interest the On gross continue develop the capacity Hess more million potential FPSOs, the with a

currently our In sanctioned XXX,XXX gross Liza production of at Phase barrels of day. oil Liza terms their Block, the more Phase of on operating developments capacity oil are and the X developments per X combined than

the on XXX,XXX approximately production of end remains XXXX. barrels Our with of capacity of third at per a Field oil day, Payara start-up development, for the gross schedule

which in will project be development, date approximately in production of first develop the April, per oil million recoverable will an a development to and day. estimated Yellowtail, on of The Our oil of was barrels gross Stabroek of capacity XXXX. XXX largest sanctioned resource barrels oil approximately with base Block the XXX,XXX fourth have expected

and design plan our for engineering expected the Front-end well a to government to submitted development fifth is development work of with at before Uaru be year-end. underway,

Block Block the approximately in of X. announced recoverable resource bringing the morning, In gross oil of barrels of year and exploration new previously These announced and add Sailfin, we billion this terms the our Yarrow to on total appraisal to XX discovered discoveries this will X at discoveries equivalent. Stabroek estimate for Guyana,

to Hess Suriname, pay. And we and exploration see a the continue results drilled well encountered well, the and future considered. system where are potential exploration multibillion is Shell and further remaining. activities operator. recently interest petroleum well oil XX% being Zanderij-X has evaluated The demonstrated The barrels working In of being a we are

Turning to sustainability.

financial in TCFD awarded to initiatives proud from in quality demonstrably line a recognized level and highest has are social opportunities recent climate-related disclosure. industry an disclosures, environmental, governance transition Hess in Level the and manage be assessment, our management perspective operational recommendations. force and risks on leader is strategic and once the with pathway governance, performance that as climate-related the task X achieved We status companies to again which

execute peers, among the by our cash XXX. ESG operational and supply increasing successfully major We In a strategy resource quartile our grow oil the continue S&P top strong to lower truly performance. generating cash our delivering proposition intrinsic unique we our flow best to of and a and both value summary, base, growth returns, and deliver our cost offer and companies of the value

As increasingly through our share return further prioritize repurchases. dividend capital increases free flow continue cash our of to shareholders portfolio to we becomes the will positive, and

I turn update. an to the Hill Greg will call now for operational over

Gregory Hill

net Thanks, operational equivalent we John. equivalent day. averaged barrels strong day, third strong guidance oil production to to oil of XXX,XXX compared performance of portfolio. Company-wide XXX,XXX Libya, This our beat our quarter, barrels per delivered per excluding reflects XXX,XXX production In across the of performance.

average barrels approximately oil XXX,XXX expect For the equivalent of quarter, per production fourth excluding day, we company-wide Libya. to

XXX,XXX our of Libya, the day, day. per full now XXXX, year average net guidance expect of per of approximately of XXX,XXX equivalent barrels from equivalent excluding production approximately barrels to oil For up previous we company-wide oil

to Bakken. Turning the

production XXX,XXX XXX,XXX year. to barrels XXX,XXX net of of and equivalent of recovery barrels weather first per guidance of our quarter above oil the day Third half averaged was and equivalent challenging following per conditions day. strong the oil execution This in the reflected primarily

net the day. per equivalent XXX,XXX fourth Bakken between barrels of quarter, and XXX,XXX we production to expect For oil average

to high XXX,XXX For XXX,XXX average XXXX, barrels day. of the our full to previous forecast the end of production we day, of Bakken which equivalent net guidance range oil now XXX,XXX approximately oil per equivalent of barrels per year is

and quarter, online. brought wells new XX we In the third drilled wells XX

For we and expect And for wells expect bring approximately new wells approximately online. to the XXXX, the to drill XX fourth we year quarter, new to wells drill XX XX approximately to XX and wells approximately bring full online.

and of are average well continue costs, forecast full we cost drilling in completion of maintaining although our experience terms In we to XXXX. inflation, per $X.X year million

locations, a we and in improvement drilling fourth of July. robust Given oil high-return added in the a inventory prices rig

our infrastructure cash unit program to our XXX,XXX per Moving flow XXXX, and which will equivalent production of net us allow in day cash costs. X-rig further optimize free reductions to maximize drive barrels oil in-basin in grow approximately will generation,

Now barrels per the which day, oil Llano of the oil of Gulf guidance production moving of day, tieback. the of high start-up the to primarily the X to XX,XXX of successful equivalent reflecting XX,XXX end offshore. Shell-operated Deepwater Mexico, net Third at range In of equivalent XX,XXX per averaged quarter barrels was our

to completed the equivalent year day. XX,XXX average XXXX, barrels XX,XXX of Mexico guidance of day average and quarter Fourth day. forecast maintenance our XXXX in Southeast of net both equivalent and per at fourth equivalent of oil JDA equivalent Asia, North In was approximately Gulf net of quarter. year barrels day. to third XX,XXX we oil full XX,XXX quarter production production per net full For XX,XXX barrels and the approximately Planned during the Basin of oil per above work is Malay the successfully third quarter per assets was barrels oil between and forecast production

including third of oil barrels of In X,XXX per from turning Liza production day, oil Guyana. tax oil our guidance developments barrels of quarter, barrels X barrels XX,XXX XX,XXX averaged Phase above of to of per per X net day. Now and to XX,XXX the the day, Phase

production Liza in barrels the the of floating per Unity production and fourth XX,XXX barrels XXX,XXX and the net high Guyana oil facility day approximately of is during and quarter. Destiny barrels strong average tax offloading day. per Both of forecast including vessels to delivered Liza storage performance quarter, uptime operating oil

XX,XXX approximately of average full For day, day, of of oil of of barrels net production XX,XXX year is to slightly X,XXX the guidance Guyana of oil barrels previous day. our per barrels tax oil XXXX, per per forecast barrels including above

Turning our oil complete. is and development gross day Payara, project of topsides drilling insulation production end development oil The of on have sanction of XXX,XXX are barrels track third XX% to underway. will FPSO the at capacity prosperity approximately at achieve The XXXX. is a to and overall per first

in with in Our FPSO gross achieve oil approximately day. GUYANA Singapore kicked project fourth on off of topside sanction arrive development, barrels per oil of XXX,XXX is of and complete to expected in Yellowtail, XX% September and track XXXX. Fabrication overall will in first is the capacity approximately is hall The utilize modules ONE XXXX. the early to a

utilizes With to with by regard oil of the approximately the a year barrels capacity of the first a government oil day of per of quarter development, XXX,XXX XXXX. plans plan gross XXXX. for to operator this the end targeted the submit an development end with expected end before with the first of plan fifth to our of of FPSO The approval Uaru,

discoveries we well, feet John Yarrow Barreleye-X X As well, of Yarrow-X The the high-quality approximately of encountered mentioned announced sandstone reservoir. Sailfin. miles at and this located XX morning, southeast oil-bearing

not The Suriname, and being miles the quarter. we encountered encounter The encountered commercial considered. Hess in exploration well On working XX operator. well of located petroleum XXX third well hydrocarbons hydrocarbon system southeast the evaluated in quantities Turbot-X where reservoir. being and a approximately of well bearing the results was recently expensed well, Shell XX% pay. Zanderij-X demonstrated The interest has oil sandstone did and feet Block Banjo-X drilled XX high-quality further The activities a Sailfin-X the of are are and is well,

of activities Looking well. fourth on which the forward, approximately appraisal Guyana and the Fangtooth discovery a Fangtooth-X quarter deep miles will southeast the Block Stabroek exploration X Southeast-X include test in located is well,

approximately located target well exploration reservoir Fish-X miles This the stacked drill XX X. will northwest also well will We intervals. of Liza multiple

The plan target reservoirs. X located In Liza-X to trajectory. Lancetfish-X which the execution is will strong. closing, we continues approximately on drill well, west miles our well growth the capital-efficient strong to Bakken addition, of In deeper be a

assets Mexico and position flow, Gulf us Southeast of and significant bigger cash free material get industry-leading cash all continue and Our to significant shareholder to better, Asia and of generation deliver continues to generate flow returns, which value. Guyana free

over I will Rielly. call the John to turn now

John Rielly

the my Greg. remarks Thanks, I of of the an $XXX the in Net adjusted net second quarter results or quarter in of third In from income compare XXXX today, was second million on basis. We XXXX. income quarter to third will quarter XXXX. XXXX of of million the $XXX had $XXX million

prices after-tax the in between $XX higher and decreased and an second $XXX The million, selling were expenses the cash by other quarter, earnings as realized higher in earnings second decreased All the million, higher million, XXXX for third $X costs sales follows: quarter to million. by in million. of earnings by net by of E&P $XX items of third expense DD&A with Turning tariffs earnings earnings earnings million E&P $XXX by exploration E&P. quarter. million decreased was $XXX decreased $XX midstream in million, earnings $XXX third higher decreased decrease overall increased components $XX changes earnings volumes lower the quarter million compared by adjusted income

oil quarter. X from cargoes cargoes third crude in the X second quarter, In we the up in Guyana, sold of

E&P decreased cargoes quarter, the which X were the our $XX sales approximately fourth we For X underlifted expect million. from production approximately million our by after-tax volumes compared income barrels, by to Guyana. with quarter, sell third In

second Midstream The compared million Midstream. XXXX, to the with net $XX quarter. million had income in $XX quarter Turning segment in of third of the

of third $XXX noncontrolling to quarter the $XXX EBITDA the interest compared amounted XXXX, Midstream in before million to million in quarter. previous

September cash while equivalents liquidity debt facilities, million position. share Turning quarter, third total At totaled XX, finance excluding stock billion. segment, common continued shares were to the the available including Midstream billion. the And purchase repurchases $XXX for X.X billion, credit $X.XX million. our financial $X.XX we and and $X.X cash of was with our obligations lease In committed approximately

of due the the to the activities We this activities dividends. to before in working fourth $X.X quarter, $XXX $XXX cash from in the amount compared year. decreased provided acquire million Board-authorized exploratory remaining intend billion third lower to realized third quarter, $XXX by prices. $XX of cash and liabilities $X.X capital the assets primarily Total cash $XXX changes million. the returned changes amounted including the Net flow million were in operating capital and in selling shareholders E&P quarter in quarter, billion quarter million second third and operating expenditures second third by million, was in quarter the to quarter. In with in operating in

guidance. to turning Now

E&P. for First,

costs barrel quarter; equivalent, and the range and $XX.XX $XX guidance. DD&A were barrel fourth Libya, was per of XXXX Libya; $XX.XX the excluding of from costs, Libya, We year, unchanged barrel per including the per Libya; $XX.XX oil cash excluding $XX.XX quarter. which our per per the cash of third equivalent, equivalent, E&P E&P project oil $XX.XX $XX equivalent expense in of for oil $XX.XX range of of barrel in equivalent, excluding barrel for barrel is and in previous third the to oil to oil of including oil per equivalent Our the be to of in Libya. of quarter

in excluding for fourth previous quarter in year forecast and the barrel $XX.XX per in oil from per is and projected barrel costs, $XX $XX fourth barrel of to of the DD&A This of E&P the guidance. full unchanged to equivalent results the to to $XX year, total our operating equivalent range $XX for excluding equivalent be to quarter both unit of XXXX. full is oil the Libya, range $XX.XX expense, for per of oil be Libya, also which

the fourth to excluding million expected our $XXX are $XXX be dry of year, is down year approximately guidance $XXX for from previous million. expenses, and quarter the to full Exploration full $XX million in is within million which hole approximately approximately approximately quarter $X.XXX which range billion and tariff of our to for year, million Midstream projected The fourth guidance to the the full the $XXX for year full billion be is $X.XXX previous $X.XXX billion. of costs,

approximately $XXX be income guidance range fourth expense, full for approximately previous the for Libya, $XXX of the million. full quarter E&P is to million excluding year, from expected is and to $XXX which year million tax up $XXX our million

premium option prices, approximately our amortization, $XXX million quarter. in fourth reflected selling will expect be noncash for which will the We be realized

are approximately E&P of full unchanged. the capital Our expected and $XXX to approximately and million exploratory guidance quarter expenditures fourth year billion $X.X remains be in

anticipate our Midstream, to from approximately full be net year $XXX we million of the $XX fourth previous is full for of midpoint the the For which year, approximately the $XXX to Hess for income range guidance million and to million. million quarter attributable Midstream $XXX segment

expenses guidance approximately corporate $XX is the from our estimated full full approximately to the corporate, million previous down for for of be $XXX approximately fourth million quarter year, are million. $XXX For year and which

which and to the $XX my to turn million million over to of I We'll happy full estimated be answer the our for year Interest questions. is any concludes end for quarter the call of at fourth operator. approximately million million. $XXX the now range to remarks. full approximately expense is lower $XXX guidance $XXX previous year, be This the will

Operator

[Operator Instructions].

from questions Jayaram JPMorgan Arun with line first Our of the come Securities.

Arun Jayaram

knee-deep pretty is what volumes think any wondering soft and for an environment in know Arun if particularly you was John, commentary budgeting you But as And CapEx? offshore. little planning guidance process. of Jayaram obviously your about a offer XXXX I bit more we are in inflationary JPMorgan. and could guys from I

John Rielly

Sure, for the Arun. Thanks question.

capital January, your As but I'll usual, some information try to now to compared you provide, XXXX to high-level our in we XXXX. guidance will point, give

So we you And as Guyana. projects, billion have know, Yellowtail. to and if spend. XXXX, going In start includes $X with development of we're X that Payara

XXXX, a spending approval, a third we will energy in on Payara as project And, will subject Yellowtail, we Uaru. development to gas to and to So project amount, government add, continue lesser but at well. a

have as industry-leading is conditions higher, of cost emissions. Uaru So current scope well to be the mentioned, will you while reduce going project, reflecting low a the gas the Uaru returns greenhouse and of the cost additional project as as supply, market to

with So to our expect currently million Guyana that, we by million to $XXX spend approximately increase XXXX. in $XXX

that of billion up to would midpoint $X be the So from billion. going $X.X

In the added million are we rig later the this the Bakken, $XXX spending in and we year. year, fourth approximately

finalizing So see as X $XXX opportunity. in spend of also the In that potential well we program, industry exploration reflecting in full tiebacks a for a an of we well And the program X-rig additional million expect Gulf XXXX, $XXX that hub drives the inflation X-rig Mexico, as X expected million but XXXX there program. the of we Bakken. and class increase are do our still year

So with $XXX of Gulf the in increase that million it's approximately Mexico.

again, be XXXX XXXX. So $X.X spend. the taking than the those capital approximately or Guyana number, to more therefore, midpoint up, And we billion expect of adding our $X billion it's about preliminary, exploratory

Arun Jayaram

point? or Great. at just thoughts this any too volumes overall on And premature

John Rielly

production mean, get we've well. this XXX,XXX growth, production us day. that at is XX%. And have grow greater that grow the output just point. about our in think earlier, we And seen it's great have again, premature can we the the Bakken longer-term at to as an now, that of we top think Payara standpoint XXXX I a line It Guyana a And as growth. mentioned opportunities just on Greg barrels we'll on can over long then about, in we'll term, than Because from

XX,XXX So XX,XXX that's going to to add another barrels.

we add then right right together, where almost XX% absolute up are now. you're X those So from

online. year, the But when the FPSOs we next move to lumpy come year. give early is into guide the be we'll So going that again, as growth production in basically

year. you think it how that's move should we about as into So next

Arun Jayaram

that of million my release follow-up, just today. just productive help more their line maybe expect is decade. barrels comment that the outlook. to in in -- I've Guyana's the they today, to that gotten the previous buy-side with Anything some wanted release oil you'll in FPSOs And I have end X Exxon's mentioned on Exxon's mentioned release Great. kind you of could And than in consortium's clarify, John, be queries by which you capacity clarify? X you by could XXXX, they

John Hess

No, years, with has capacity barrels million that. growth you productive have [indiscernible]. having by about several what said oil ask But about consistent that's of that's comment of last the our Exxon to per Exxon the over day, XXXX very X correct and

Operator

Doug Our next Leggate the Bank America. question with of comes from of line

Douglas Leggate

you these like John, with But tell -- bit get additional the at to asked have was Exxon but conservative. plateaus Arun sight is got clearly close I pardon basically this getting over to right? that you're X.X up going of that to and Exxon's least million. know seems that Why answer anyone to not XXX,XXX, looks a be is But line they guess point X me I've expression, and know why, being last on I to the to old, us, I on. X that my mentioned. you and long is what asked in listened that doesn't would capacity so Over before million sorry production at just it boats, X an who's you've I've this of me they're XX%

John Hess

upside to the there is. day X and XXXX X FPSOs conservative gross of and is a production at some that? number of least number. is certainly a good Yes, number, barrels It's Doug, there million a think I

Douglas Leggate

wrong? math my Is

John Hess

opposed there's math. X talking million day, barrels let's upside XXXX, talk X your that FPSOs, No. a as to about math, our about saying to Well, We're number.

Douglas Leggate

right. All Okay.

the is return just the CapEx lot that, CapEx a overall of somewhat flow back. Sorry as press. follow-up [indiscernible] to obviously, story. in guess, obviously -- look Guyana the My you cash walked the of recovery makes Obviously, money cash All of story, into how right. to cash I quickly get given you through the -- the John's

cash So inflection that XX% ]? I cash at in way by flow that the we you're lagging in current free XXXX clearly returns target, guess What can my of this an of question [ strip year. pricing is expect

John Hess

It's excellent thanks one. Doug, an question. the for Yes.

look priorities John As financial Bakken to in to Guyana $X.X XXXX, capital and program. the especially remain high-return first, we our opportunities, invest talked about, that our billion in

Second, a we and strong balance to sheet further dividend. to maintain we these cash to regular increasing Then fund cycle. that opportunities high-return year ensure can would position consideration and investments next the through strong our give

following the to with through flexibility committed XX% And return up we return of in similar this our cash line capital then where that, of in the flow And we to share returning free year, the remainder excess to program, have to repurchases. XX%. have

end the cash recall, of we the sheet. had billion quarter, of You'll $X.XX balance at on the

So we have flexibility for next year.

come upon depending be economic the slowdown our recession out, capital oil the increase to market return financial prices, we'll conditions, positioned further. and where prices, So on

be that's But next we'll to year. decision that going into we go a make as

First, sure of go and flow. cash next can year keep not ahead, that to left make in we out, free over the sheet; the the third, dividend. second, balance fund then programs; as levels we but increasing high-return strong our we just deliver And anything years increase

of in proportion growing a represent will repurchases share the ahead. capital return years program expect our We

Douglas Leggate

that? is just clear, How maturity be to year. John, a you've So, got much debt next

John Rielly

year, our -- to you than $XXX just in what want expect actually I we And Doug, XXXX, framework. XX% XXXX. sure make yes. we are in it's said and earlier in our do more returning It's million, because actually to this

John strong, than has XX%. this fourth flexibility, So remember, more $XXX just of framework, we million. the oil did we'll as framework million prices John do in when mentioned, are quarter. doing that's the are $XXX And we as our debt our the complete And And our mentioned, what to reduction year.

So as see. said, again, on flexibility have strong. or more, XX% John do depending to we stay market we'll conditions, that And we'll

Operator

with comes Our next Richardson Stephen question Evercore. from

Stephen Richardson

from so names. wasn't a if something Greg, on Banjo-X, inboard terms what this through was the away about the recollection to On talk that maybe And to bit to -- those wondering and at or for more that oil couple of Uaru it that little play was Could success exploration. the what a easy that? you're I confirmed I testing pronounce got what able ask Could -- that and -- was in goodness one, we could extent Thank Southeast. should seems was X? you a wasn't? And you've take

Gregory Hill

Yes, sure.

So first oil would has been of because say the I in inboard successful play very had discoveries all, X area. we've the

So XXX morning; announced pay. pay, high-quality feet pay. pay. feet of And XXX of had had feet Seabob had Lukanani high-quality had we recall, Barreleye high-quality this as XXX feet Uaru finally, XX of high-quality of

we've And drill it So area. will went though to development. underpin hydrocarbons, help to wells got in quantities of it, all had dry, hydrocarbons that future Banjo a of through those noncommercial more even was it had that qualities of --

important back drilled in prospect Western successes, play And we well. feel the commercial X I step X inboard to So come, and if also, I inboard as say play. very I the Banjo that it's optimistic still that on was and know most about to that more think

Stephen Richardson

mean, boats semantics That's of in of the should recovering million seems or Is months? X some X But helpful. get Greg, that's those event how something whole about kind barrels at clarity are this boats? XX-plus is thinking it the X I plateau or more of to that, And XX, or this length this the additional we additional the -- what XX on longer the us next maybe, think -- that -- a may the of get variables. be the in the that we boats you see we're around be, we going whatever maybe clarity we as production? Or versus as billion to kind could barrels, reservoirs be XX react point it terms

John Hess

XXXX. Steve, want least on that. be. at in a to Yes. you X to what I But have grows barrels going It answer million is day Greg the clarity production

I think important. that's really

upside there's confused releases. get don't that. number, people other and to That by So the is

million should that trajectory. Now the tiebacks plateaus, Greg of number a use very and a day having growth but X can talk and production good is that in visibility of about terms people more barrels clarity

Gregory Hill

Great. Okay.

or So plateau should -- the I lengths, say, rates I to vary think are by going vessel.

upper in deeper high And and in given the plays play density campaign shallow the the the potential near-field and underlies tiebacks. deep However, the reservoir. upper because remember, resource or the both that's for campaign

So than what to plateaus for these a we be other Deepwater longer remain for see development. expect would production period typical

length of reservoir I'm bespoke optimistic upon the density vessel. around each But the will So be the about pretty in plateaus. based one and each again,

Operator

Our next line of Sachs. question from comes Goldman with Mehta Neil the

Neil Mehta

First for Bakken. question just guys into after 'XX quarter on as thinking about you the we us trajectory is then here 'XX earlier get Really year. the weather you Bakken you and issues as the this should Can in good well? how in some be around refresh

Gregory Hill

Sure.

So the we in things. to million of quarter. of year. One And that of completed the this going $XXX couple at fourth really wells of be end guided $XXX are million back quarter most a reflects the to is the

to reflect bit We historic fourth also at quarter a kind our the increased weather contingency we the that. quarter, and of in in looked fourth little performance our

day with you the allow a headed If Bakken about to barrels increase us in going to about that's we're XXXX. X XXX,XXX think to production where the rigs, in

cash with wellhead can assume broadly during extensive at is flat significant be to time, expect of that around going high-return a our the decade percentage XX%. free and of wells, you we And for the nearly hold that then And plateau oil period that generate this flow. inventory of to

XXXX assuming can year to you that approximation be point straight what the of and would pretty trajectory the much almost of reasonable give be. you end So will line of XXX,XXX, a will the end XXXX, and this end

Neil Mehta

could That's and back step the right. color John, I you read about good then, view macro, to on here. All on if always ask And markets. you talk a oil your have the good

the on are given And Just hedging you into framework the of perspective where go your feeds we in how that your in as the XXXX? into around curve? terms rebalancing backwardation

John Hess

inflation dollar, some of John being our I'll and market, rates, we interest will is on in see Look, remarks the impact obviously about the oil how Yes. give strong detail high markets. Rielly further financial the felt hedging. talk on

in in from it's certain slowing the know already China overall, only seen to have say, perspective, in though to be pretty felt, But continues markets and resilient. Europe pullback, the of demand global You and anybody, of even than financial a I also not being but oil in economy. the parts we've better your

And yet. And we're million going barrels day haven't oil global there's economy globally don't in barrels that impact look completed COVID, demand, next million it financial a steady major year overall I year. fact, world it a economy from what reopening barrels going demand was its pullback but I But here, between a X from high we does don't in of travel, day. the as not is seeing during increase out a was itself. affect to it's part in there next crisis, we on up in upside and to think inflation which demand to dollar the in think see China current recovery and near XXX if recovering of a be X continuing air slow what's think been of I million increase going demand the where we to anywhere oil upwards

you with from we -- least Russia is major think could XXX oil into think what's I year, go up just think, if now. that Russia X million about. as to do with cold And through we day barrels oil a What's That a is winter? talked to right I happen million anything, supply, reason, supply? the gas to X how that get day How will the going the happen increase I barrels a next upside. the The risk, demand, that's going the at go day million winter?

both substitution substitution, you supply for be seen Europe know, remains residential, obviously, on in there's industrially, some side. commercial, gas electricity As oil well. fuel that How as much is Asia, the and to

are strengthening see hedging? such, now John, the the about say But where winter. that we is there if of to market, into going our more how we So upside downside. backdrop, a price having tailwinds with as the than impact sort And I'd from as anything, there's

John Rielly

Sure.

Neil, levels that backdrop, time too mean, be here, do the expensive. volatility So right just puts our And the options the putting value John would is the with mentioned we all that we strategy. with for and I put now, what hedging on use variables

year. So we we this of to the protection get that plan do hedge similar had level

some watch year try quarter, in we but early will we fourth next on. it hedges market. get We'll the that continue to Now to be the could on get these

you And with It just put matter it. on. again, expect timing options. of do us hedge should a we So to just get -- position that be a when will similar

John Hess

said, the still benefit downside our shareholders John of what underline protect and the the to to that's again, give upside. And

Operator

question comes Wells of Our Read Fargo. from next line Roger with the

Roger Read

Yes.

guess, CapEx, across as and a I is you kind Guyana, think curious when well U.S. a a bit back, various look much little how hesitant you're can regions say, come that U.S., on or there's onshore, any than risk know get about what contracted, little the to as 'XX and not of you've -- I I'm look the seeing had. of fairly offshore you underlying a the of operate just to But just more we're on like where Going of you you front, out, we signed, lot committed everywhere? CapEx inflation surprise the

Gregory Hill

Yes.

costs, So we're pressure rig upward offshore steel seeing on businesses and labor across inflation, like and prices, our rates. our competitors, onshore the both

Bakken So let's talk about the first.

the of XX% the has now we've inflation seen seen XXXX. Regarding Bakken, this versus year, XX% what to industry overall

contracting our that in per technology, D&C million manufacturing, strategic know, X.X%. that you to as of done cost this to deliver However, And that's reduce and been well through us teams able enabled to and $X.X lean have XXXX. we've

if seen our inflation industry in you about the Bakken, So will. net of has been the what has half

anticipating very even in terms, labor. spreads, sand in to the to broad is strong. still potentially XX% goods, drilling at tubular we demand XXXX, further and country prices inflation though in to rigs Now if and inflation steel also XX% we're XX% X% mills capacity a oil frac XX% frac are in moderating, look are expecting and to We're XX%

kind idea. gives you of So that an

of mitigate we're Bakken we'll further and in working to these course, some increases, of XXXX Now guide the as well usual. January in cost

limited X of cetera, they've in have any the through the FPSOs in Guyana, job goods, inflation, to et offsetting efficiency exposure excellent recall an done realized and And that tubular add oil should I in inflation and contracted gains first Guyana. are country that operators have

FPSO as approved cost is Now well as reflect has give sanctioned, to the world-class market already Uaru going have changes, an current conditions as we'll mentioned, update and scope still it been still breakevens. and world-class, will the be on but Uaru once project

Roger Read

additional with I Guyana there other had I mean any you've else down the related FPSOs? change Yes, but only as has been to development know the watch you're pipeline And as there. out about thoughts update, any thinking have onshore, it's is to question to term? the certainly gas something there is, I period had long the discoveries of to we X anything these and to be XXXX down

Gregory Hill

No.

all the in it's off ensure build. think the term, XX power the slipstream short to plant gas million XXX government to supply I clean and million of Liza about onshore pipeline will that

road. Beyond that, LNG anything terms the very down that, term like of or way in long that's

oily an we the well. developments plan those That optimizing have forward. will around We X, to seventh development the as the as just on the John are corner. be oily said, focused boat and visibility likely move is to clear And

Operator

with the Our next Sankey Research. line Sankey comes of Paul question from

Paul Sankey

you're Libya, you an Hess, update give could please? outlook for and on John markets, of while the subject oil

John Hess

west. political leadership that. it together east encouraging having be further for going there signs and coming Look, the but they're premature Yes. on would for to And Paul, start easy the thanks divide the for country, between of unrest, the me question. Libya still to are that comment the some political is

and to We a in of progress. are approval conclude sale our leadership there to still ConocoPhillips, be assets that to able work needs going and it but government, hopeful that's we're our Total from the

Paul Sankey

Understood.

don't for [indiscernible], bit an Gulf the a in a on Or making sort is had plans retirement which a maybe of for there? We Is hear theme thing Mexico? and payment talk an the there a more talk a in Is the opportunity overall to it? about that the you got one-and-done outlook you in could but comment position. obligations an aware end big of that you've your you're inside you Another of that of about to attractiveness pretty quarter. much of the we're is putting same? the sort but good little obviously, And asset that Gulf it, there you and is Mexico position

John Rielly

it I'll Gulf. I'll over start to Greg then with So the for asset obligations, the hand retirement

near-term on the really our updated on. And are on we're for we took abandoned. working that going of just It is that quarter. properties being So that the asset was wells charge retirement obligations this we that had, we this basically that be wells those kind nonproducing estimates to

of is a So yes, more that, onetime.

Now that come a got overall, but over be long lot abandoned, we've of like will wells to term. the

happens estimate they're for those liability, that producing, wells not the asset. And from were change is the an the in standpoint when much. what accounting increase all increase But the you

we have have say it thing. properties in would is more don't these that one-off think This as again, kind of nonproducing recurring-type the about I So term. to for a a you near

Gregory Hill

headed of we're And Gulf. about where Paul, kind in the let me talk

Mexico growth really kind platform Gulf a and cash of remains the for you us. important for as So of intimated, engine

our opportunities. production through hub exploration both class objective is tiebacks grow so And there to and or sustain

you our acquired of good X as in opportunities. balance lease types rebuilding know selectively we've last new than Gulf been XX more Mexico years. really and we've of And blocks have both of portfolio, So the a

of So next for seeing we're year. I and class program, Shell success Chevron. most I drill we kind the the think year that is based X still And finalizing potential the but next tiebacks hone wells planning a good assumption And hub in well we are of also we're that would per years. opportunity exploration X then for partners this talked on in if upon of our Huron our and several these X the about, prospects XXXX, year

in good very partnership So we're with the Gulf. in a

Paul Sankey

I'll of And looked you've question. Has the to a a ask it. difference way the Got Mexico? made at Gulf leading government policy

Gregory Hill

No, it hasn't.

Operator

Research. next question, question next Bob [Operator having moment. difficulties from of moment. one one line technical Our question promoting -- Brackett comes Instructions] We're the Our next with our Bernstein

Bob Brackett

the Uaru Thanks on for the development. color

of sort standard and how it FPSO third-party limit had capacity XXX,XXX begs question, of pull at that you mentioned seen XXX,XXX given the the of large reports day. in day an ], [ a terms a could get You for that what's I class?

Gregory Hill

Bob. thanks, Well,

be of I kind think is debottleneck the to going opportunity to bespoke.

vessel. by vessel be to going it's So

it you debottlenecked from performance debottlenecking can Phase we X. of It the recall will we Phase went Now early production probably some II, Based likely if that have XXX,XXX. looks there. to on XXX,XXX potential

much that capability As upon these where debottlenecking pinch points the it production call or are come is vessel. on, vessels there and when each the year how early so, you'll history, decide first based on your is

production bespoke, So to see we'll wait early that and have it's and shows. be to just data what going

Bob Brackett

guess? terms And any capacity, maximum of in

Gregory Hill

XX% think look I don't would potentially Again, Phase different, is you Well, is if and premature to X. I it be and know. typical be every at to Phase I throw of X maybe to I -- out going think what that. vessel kind XX% know. don't be numbers would just like XXX,XXX

John Hess

And in. to But the obviously, be all XXX,XXX putting Bob, subject is government government in planning assumption. it's to plan approval. approval. a is day range, again, this probably our going something And We're conceptually of to Yes. of good subject development a assuming

Bob Brackett

then, year follow-up deeper biggest in thoughts sort and been on progress about learnings A the of this exploration of Any Santonian? Guyana. Santonian has your update Very clear.

Gregory Hill

we in we example, will drilling I lot. high-quality, deep system. I the us well another potential then Southeast, to of will X deep tell I Well, be southeast is my many the And really with miles results miles think Fangtooth And of a quarter. X a that spud. very Fangtooth And there the opening we're putting -- wells large think I is will for to remarks, as -- for of that Fangtooth reservoir going said very located southeast continue fourth in is to speak themselves. the mean, the understand continue going promising. very

I deep. am about So very optimistic the

John Hess

recent and had is which Lancetfish, called northwest distance is a a And to of and one on, Fangtooth, number review that Yes. Fangtooth. other we that east west there then of are Fish-X Fish-X of the reasonable have the prospects are we

come. lot a prospectivity there's to So of

seismic get these are horizons, correlate our success up. the more deeper ability lighting As to we new finding in prospects

about is Greg that upside more lot a we'll talking X able there's months, be next that updates So hopefully, to on. give the in

Gregory Hill

is that miles you Liza-X. northwest the Bob, And just Fish-X Yes. to remind XX of

Liza. you gives deep to it's some an deep the the And miles complex. about what of Lancet west close targeting then, underlie to reservoir of that X we of see. It's And systems, of extent is So Liza-X that these Fish well. sands idea Liza course, that

Operator

line the with question And Brothers. our is of Noel Tuohy last Parks from

Noel Parks

at your learned just about of analysis was interpretation there? about there of results there Banjo, resource I the is how wondering beyond the the just and/or through anything else extent sort if the maybe if you you of could ripple a talk bit thinking size maybe aerial

Gregory Hill

I think of again, Banjo. the talked already Look, No. we about significance

I oil amounts inboard we've think the the well. had Banjo pay. Lukanani the oil most which is Barreleye, question play. Seabob, really Western was about And significant all this area, X recall, Yarrow, of in had discoveries

got bit wells was of that you out area, that in a it from area. an step, more in to drill a So We've fairway. the bunch will, if

I don't think into at read all. anything the Banjo you should So result negative

Noel Parks

there. out with done for up the Okay. much lighter oldest, some had fair any recall, you If And experience enough. a that And Bakken minute. sort work of you with just recompletions going turn were some had updated to wells our thoughts on I I vintage original, done if to wondering completions there? the wanted to of just the back

doing for about like And anything so -- might sort the I out there, and what that of if potential what you ] work? look [ guess have returns the been

Gregory Hill

seeing, good. have And cases, been that not the completions. some wells the as surprising as rates in and IP because very new refracs been these the some of of results And a -- the wells. we were Well, XXX that's have good vintage we're doing are kind of number

our will We program could we have and that hundred in wells we go refrac, several fit them forward. we as

more the of the continuity advantages you of refrac One frac with crew. program is the allows it

program So frac dovetailing a continuity into been our refracs second some of just sort of maintain crew. to we've

good, next are activity is far good But very So you'll returns the of wells there. are already the that so results the good. more year. And see infrastructure the so there, because all

So...

Operator

himself. And of line Our Sandler. next Todd Piper from Todd removed Mr. Ryan the comes question with

you This So your much. Thank now conference. participation, thank today's may and you very disconnect. concludes for you

Hess (HES) 26 Oct 222022 Q3 Earnings call transcript