Hess Announces First Production from Liza Phase 2 Development, Offshore Guyana

Rhea-AI Summary

Hess Corporation (NYSE: HES) has commenced oil production from the Liza Phase 2 development on the Stabroek Block in Guyana, utilizing the Liza Unity floating production, storage, and offloading (FPSO) vessel. Production is projected to reach 220,000 gross barrels per day later this year. The Liza Unity, which holds the SUSTAIN-1 notation for sustainability, enhances Hess's capacity in the region. By 2027, six FPSOs are expected to be operational, potentially producing over 1 million barrels per day, indicating substantial growth in Hess's oil production capabilities.

Positive

• Production from Liza Phase 2 expected to reach 220,000 gross barrels of oil per day later this year.
• Successful startup of the Liza Unity FPSO, enhancing operational capacity.
• Six FPSOs projected to be operational by 2027, potentially producing over 1 million barrels per day.

Negative

• None.

• Production expected to reach 220,000 gross barrels of oil per day later this year
• Liza Unity is the second of multiple oil developments planned on the Stabroek Block

NEW YORK--(BUSINESS WIRE)-- Hess Corporation (NYSE: HES) today announced startup of production from the Liza Phase 2 development on the Stabroek Block offshore Guyana, utilizing the Liza Unity floating production, storage and offloading (FPSO) vessel. The Liza Unity is expected to reach its production capacity of 220,000 gross barrels of oil per day later this year as operations are safely brought online.

The Liza Unity arrived in Guyana in October 2021, following construction in shipyards in China and Singapore. It is moored in water depth of about 1,650 meters and will be able to store approximately 2 million barrels of crude oil. The Liza Unity is the world’s first FPSO to be awarded the SUSTAIN-1 notation by the American Bureau of Shipping (ABS) in recognition of the sustainability of its design, documentation and operational procedures.

“We are proud to be a partner in the successful development of this world class oil resource and congratulate ExxonMobil as operator for outstanding project execution,” CEO John Hess said. “We look forward to continuing to work with the Government and the people of Guyana to realize the remarkable potential of the Stabroek Block for the benefit for all stakeholders. The world will need these low cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

The Liza Phase 1 development, utilizing the Liza Destiny FPSO, began production in December 2019 and this year its production capacity is expected to increase to more than 140,000 gross barrels of oil per day following production optimization work. The third development on the block at the Payara Field, utilizing the Prosperity FPSO, is on track for production startup in 2024 with a production capacity of approximately 220,000 gross barrels of oil per day. The field development plan and application for environmental authorization have been submitted for government and regulatory review for the fourth development at Yellowtail, with a production capacity of approximately 250,000 gross barrels of oil per day and startup expected in 2025.

At least six FPSOs with a production capacity of more than 1 million gross barrels of oil per day are expected to be online on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop the gross discovered recoverable resources currently estimated at more than 10 billion barrels of oil equivalent.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.

Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.

Cautionary Statements

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation, the expected number, timing and completion of our development projects and estimates of capital and operating costs for these projects; estimates of our crude oil and natural gas resources and levels of production; and our future financial and operational results. Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: fluctuations in market prices or demand for crude oil, NGLs and natural gas, including due to COVID-19, competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring as well as fracking bans; the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures which we may not control and exposure to decommissioning liabilities for divested assets in the event the current or future owners are unable to perform; unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits; potential disruption or interruption of our operations due to catastrophic events, including COVID-19 or climate change; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission. As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess Corporation’s Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220211005390/en/

Investor Contact:

Jay Wilson

(212) 536-8940

jrwilson@hess.com

Media Contact:

Lorrie Hecker

(212) 536-8250

lhecker@hess.com

Source: Hess Corporation

FAQ

What is the significance of the Liza Phase 2 development for Hess Corporation (HES)?

The Liza Phase 2 development enhances Hess's production capacity significantly, contributing to expected output of 220,000 gross barrels of oil per day.

When did Hess Corporation start production from the Liza Unity FPSO?

Production from the Liza Unity FPSO began with the startup of the Liza Phase 2 development.

What are the future production expectations for Hess from the Stabroek Block?

By 2027, Hess expects six FPSOs to be operational, with a potential combined production capacity exceeding 1 million gross barrels of oil per day.

What is the anticipated impact of Hess's oil production growth on its market position?

The increase in production capacity positions Hess favorably in the market, strengthening its role as a significant player in oil supply.