Hess Corporation's Bakken spending is set for $2.2 billion in 2013. That's almost 33% of the company's entire budget, but down from the $3.1 billion that was spent in 2012. Company-wide spending will drop to $6.7 billion in 2013 from $8.3 billion in 2012.
Greg Hill, President of Worldwide E&P, stated, "Our expenditures in the Bakken are planned to be $2.2 billion in 2013 versus approximately $3.1 billion in 2012. This reduced level of spend is driven by lower well costs associated with our transition to pad drilling from hold by production mode and decreased investments in infrastructure projects. In addition, we plan to increase our expenditures in the emerging Utica shale play to $400 million from $300 million last year."
Hess did spend $750 million on infrastructure in 2012, so that could very well be the bulk of the decline. Details for infrastructure spending in North Dakota in 2013 were not provided. Lower spending is also the result of cost savings that will be realized from pad drilling. Well cost dropped almost 30% from $13.4 million in the first quarter of 2012 to $9.5 million in the third quarter of the year. Add spending less on infrastructure and the costs savings being realized on the development side and the results is much less spending, with similar activity.
Hess will operate 14 rigs in 2013. That's down from 16 in 2012.
The company operates the bulk of its acreage and has an average 67% working interests in approximately 800,000 net acres.