Page 11 - NorthAmOil Week 30

NorthAmOil PERFORMANCE NorthAmOil
Hess reports smaller-than-expected loss
US
US independent Hess has posted a smaller loss than had been expected by analysts, buoyed by growing production from its assets in the Gulf of Mexico and the Bakken play. Lower exploration costs also boosted the company’s performance.
Hess had reported a net loss of $6mn, or $0.02 per common share, in the second quarter, com- pared with a net loss of $130mn, or $0.48 per share, in the same quarter of 2018. e company said its exploration and production net income net income was $68mn in the second quarter of 2019, up from $31mn in the second quarter of last year.
Hess’ net production from the Bakken grew 23% to 140,000 barrels of oil equivalent per day (boepd) from 114,000 boepd in the sec- ond quarter of last year. The company cited increased drilling activity and improved well performance in the play. It operated six Bakken rigs in the second quarter, drilling 39 wells and bringing 39 new wells online. Hess anticipates net Bakken output for the whole of 2019 to be
140,000-145,000 boepd, which it noted was at the upper end of previous guidance.
e company’s net Gulf production reached 65,000 boepd, up from 47,000 boepd year on year. Hess said this primarily re ected higher output from the Conger eld, which had been shut in during the second quarter of last year owing to maintenance at the third-party-oper- ated Enchilada platform, as well as higher pro- duction at the Penn State eld. However, in May 2019, Conger eld was temporarily shut in for unplanned maintenance at Enchilada, which reduced second-quarter 2019 output by around 4,000 boepd.
Hess has raised the lower end of its total pro- duction forecast for the whole of 2019 by 5,000 boepd to 275,000 boepd, while leaving the top end unchanged at 280,000 boepd. However, the company also cut its capital expenditure plans for the whole year by $100mn to $2.8bn. e move comes as shale drillers find themselves under mounting pressure from shareholders to prioritise returns over growth.™
PROJECTS & COMPANIES
Chevron, Enterprise strike deals to support offshore terminal plan
US
CHEVRON and Enterprise Products Partners said on July 30 that they had signed long-term agreements that support the development of Enterprise’s proposed Sea Port Oil Terminal (SPOT) project in the US Gulf of Mexico. In a separate announcement on the same day, the two companies said they had also executed long- term agreements for crude transportation, stor- age and marine terminalling services. is set of agreements will support the expansion of Enter- prise’s crude system from the Permian Basin to its ECHO terminal in Houston, Texas.
The deals illustrate how booming oil pro- duction in the Permian Basin is prompting companies to expand infrastructure for the transportation, storage and export of crude from the Gulf Coast. An additional 2.3mn barrels per day (bpd) of crude from the basin is anticipated to reach the Gulf Coast in the next year as new pipelines enter service, allowing output to keep growing.
Enterprise’s SPOT project is one of at least eight similar projects o the coasts of Texas and Louisiana that have been proposed for the export of Permian oil. It would compete with projects under development by private equity rm Car- lyle Group, commodities trader Tra gura and
pipeline operators Magellan Midstream Part- ners, Tallgrass Energy and Phillips 66.
SPOT would consist of onshore and o shore facilities, and is designed to load very large crude carriers (VLCCs) at rates of roughly 85,000 bar- rels per hour, or up to about 2mn bpd. Currently, the Louisiana O shore Oil Port (LOOP) is the only US port capable of fully loading VLCCs, though operators are scrambling to bring others online.
Enterprise did not specify whether Chevron would take a nancial stake in SPOT, or whether the super-major would become a customer of a Permian crude pipeline that may be named Mid- land-to-ECHO 3. e value of the agreements was not disclosed either.
The companies did say that Chevron had agreed to use Enterprise’s crude transportation, marine terminals and storage facilities, which include its Houston storage facilities.
e following day, during its second-quarter earnings call, Enterprise said it expected SPOT to take about two years to build. Permitting for the terminal is anticipated by the company to reach the nal stages by the end of the rst quarter of 2020, with a final investment decision (FID) expected during the second quarter of the year.™
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