Hess Bakken Shale Map

Hess is one of the largest operators in the Bakken Shale. The company was well position with acreage that was already held by production when the Bakken boom began expanding into North Dakota in the mid-2000s. Hess has approximately 800,000 net acres targeting the North Dakota Bakken Shale. The company is cut its development program back in 2013, but operated 16 rigs throughout 2012. The company plans to continue expanding its infrastructure assets and has a goal of reaching 120,000 b/d or production.

Production from the Bakken has grown from less than 10,000 b/d in 2008 to more than 50,000 b/d in 2012. All while drilling times have fallen. The company's number of days from spud to total depth (TD) has fallen from 37 days to less than 32 days since mid-2011. Drilling and completion costs have also fallen from $13 million to less than $10 million during the same time frame.

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Hess Corporation Bakken Shale Quarterly Results

April 2016

Net production from the Bakken increased to 111,000 boepd from 108,000 boepd in the prior-year quarter due to higher natural gas liquids and natural gas production in 2016. The Corporation operated four rigs in the quarter and brought 31 gross operated wells on production. Drilling and completion costs averaged $5.1 million per operated well, down 25 percent from the year-ago quarter. 

The Corporation’s share of Bakken Midstream segment net income was $14 million in the first quarter of 2016, which reflects the sale of a 50 percent interest in the Bakken Midstream segment on July 1, 2015, compared to $27 million in the prior-year quarter. Bakken Midstream capital expenditures were $35 million compared to $40 million in the yearago quarter.

January 2016

For the fourth quarter of 2015, the Hess Corporation (NYSE: HES) reported an adjusted net loss, which excludes items affecting comparability, of $396 million or $1.40 per common share, for the fourth quarter of 2015 compared with adjusted net income of $53 million or $0.18 per share in the 2 fourth quarter of 2014. 

Net production from the Bakken increased approximately 7 percent to 109,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 34 gross operated wells on production in the fourth quarter of 2015 increasing the year-todate total to 219 wells. Drilling and completion costs per operated well averaged $5.1 million in the fourth quarter of 2015, down 28 percent from the year-ago quarter. 

The Corporation’s Bakken Midstream segment had net income of $11 million in the fourth quarter of 2015 compared to $8 million in the prior-year quarter. Bakken Midstream capital expenditures were $103 million in the fourth quarter of 2015 and $133 million in the year-ago quarter. In 2016, the Bakken Midstream capital budget is $340 million up from full year 2015 capital expenditures of $296 million.

November 2015

Net production from the Bakken increased approximately 31 percent to 113,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 48 gross operated wells on production in the third quarter of 2015 bringing the year-to-date total to 185 wells. Drilling and completion costs per operated well averaged $5.3 million in the third quarter of 2015, down 26 percent from the year-ago quarter. During the quarter, the Corporation operated 7 rigs.

July 2015

Net production from the Bakken increased approximately 49 percent to 119,000 boepd from the prior-year quarter due to continued drilling activities. The Corporation brought 67 gross operated wells on production in the second quarter of 2015 bringing the year-todate total to 137 wells. Drilling and completion costs per operated well averaged $5.6 million in the second quarter of 2015, down 24 percent from the year-ago quarter. During the second quarter, the Corporation operated 8 rigs.

Fourth Quarter 2014

Net production from the Bakken increased approximately 50 percent to 102,000 boepd from the prior year quarter due to continued drilling activities and the first quarter 2014 completion of the Tioga gas plant expansion project. The Corporation brought 96 gross operated wells on production in the fourth quarter of 2014, bringing the yearto-date total to 238 wells. Drilling and completion costs per operated well averaged $7.1 million in the fourth quarter of 2014, down from $7.6 million in the year-ago quarter.

November 2, 2012

Net production from the Bakken averaged 62,000 boe/d in the third quarter, an increase of 94% over the year ago. And we shipped approximately 37,000 barrels per day of crude oil from our Tioga rail-loading facility to higher value markets to improve price realizations.

In addition, we are currently evaluating the feasibility of building a rail unloading facility at our Port Reading, New Jersey complex to market Bakken crude oil on the East Coast.

Now we expect production guidance for 2012 for the Bakken to average between 54,000-58,000 boe/d. Our main focus is on capital efficiency. And as a result, we've reduced average drilling complete cost to $9.5 million in the third quarter. That's reference to $13.4 million in the first quarter. The 29% reduction was primarily driven by the switch to providing fleet completion designs, which was used in nearly all of our wells in the third quarter. Looking forward in the fourth quarter, our HBP drilling will be substantially completed, and therefore, we expect to see further decreases in our average well costs as we transition to pad drilling. And currently, 15 of our 16 rigs are operating in pad drilling mode. The switch to pad drilling is going to allow us to further improve our capital efficiency and optimize the pace of development. Our approach is going to be to sequentially drill a number of wells on a pad using a walking rig; then once drilling operations are finished, we will move completion crews in to then sequentially fracture the wells. Now this will lead to the temporary flattening of the production profile until mid-2013, at which steady-state operations will allow us to resume our upward growth trajectory. So the production curve in 2013 will be a bit back-end loaded. Now we believe that this lean manufacturing approach will result in significant efficiency gains and cost savings and further improve our returns in the Bakken.

I think the 30-day average IPs from this new sliding sleeve design, which is 25 to 34 stage, are slightly lower, they're 800 to 900 boe/d. I think with regard to EURs, we continue to think that 500 to 600 is a good average used for the entire acreage position. However, as we focus on higher quality parts of the play in 2013, we expect EURs in the Middle Bakken to be closer to 600,000 to 700,000 barrels.

...The Tioga Gas Plant side for extracting liquids out of the natural gas we're going to have there, because Bakken associated gas is very rich in content of NGLs and LPGs.

So for the Bakken right now, we plan on spending approximately $750 million this year on infrastructure. And again, that's going to be infill pipelines. You've got your gas plant. You've got the rail facility. And obviously, we had spent some of that beforehand. There's various rate years that are used for the DD&A. I'd say you've got a 20- to 25-type year depreciation on those facilities.