JUNE-16-2020: HESS - JP MORGAN CONFERENCEAn update out of Hess below - webcast was held earlier today.
- Stabroek partners waiting for election results to be completed before Payara FID. Expect election results to be finalized in the next few days given reports out from GECOM / CARICOM. CARICOM weighing in was instrumental in moving the election process forward. Hess does not see any issues with a new government taking control in Guyana.
- Guyana world class assets - will propel Hess valuation for years to come. Multi-billion barrel exploration potential in the Guyana / Suriname - still in the early innings of exploration phase.
-The best way for E&P's to unlock value is through the drill bit (organic exploration). Focus on the most prolific basins with the best rocks.
- Liza phase I break-even under $35/bbl. Liza phase II under $25/bbl break-even. Payara break-evens expected to be similar to Liza II. No material delays seen on these three projects thus far.
- Delays impacting FID of 4th and 5th FPSO will move the ~750k/bbl per day of production by a year (2026 instead of 2025).
- Remaining exploration potential on the Stabroek License is significant. Thus far, the Stabroek partnership has been focused on upper cretaceous campanian fairway (extremely prolific reservoir about 15k ft below the sea floor). Much of the 8 billion barrels of recoverable resource is sourced from the Campanian based reservoirs. In the last year, the Stabroek partners have drilled below the campanian twice (targeting Santonian based reservoirs located ~18k ft below the sea floor) and have discovered significant a resource. As they continue to model the basin and expand their geological play types to the deeper Santonian - they are seeing all sorts of new prospects that have yet to be drilled. So, Hess confident in saying they are confident they can unlock multi-barrel exploration potential on the Stabroek License. Very very early innings of exploration.
- Stabroek partners was to bring in 5 deepwater rigs by 2021 - two focused on exploration and appraisal activity the others focused on development activities.
- Next 18 months - Hess expects a wave of exploration activity focusing on some of these deeper targets as well as the 15k campanian targets.
- Kaiteur Block - exploration well expected in 2H of this year (hess and exxon have interest). Encouraged by prospectivity of Kaiteur Block - outboard of Stabroek license.
GLTA