Hess is spending less in 2013, but it might simply be spending it smarter. The company only spent $535 million developing its Bakken acreage in the first quarter. Honestly, it's still a big investment, but down over $300 million from the first quarter of 2012 when Hess spent $852 million in the area.
The main reason for lower investment levels is improving costs. Hess can drill the average well in just 26 days compared to 32 days in the second quarter of 2012. That along with other costs savings measures has driven Bakken drilling & completion costs down from $13.4 million to $8.6 million over the past year.
Hess has also let a significant amount of acreage go over the past year. The company has an interest in 665,000 net acres compared to 833,000 net acres in Q1 2012.
Hess produced 65,000 boe/d in the first quarter of 2013 and just 11% of the company's production is operated by other companies. Hess has an average working interest of 84% in operated wells and 12% in non-operated wells.
With many corporate changes underway at Hess, it will be interesting to see if the company's strategy changes over the coming months. I can't imagine a scenario where the Bakken isn't core to the company's development plans.