Hess increases drilling in Bakken shale

NEW YORK, July 25 Wed Jul 25, 2012 10:41pm IST

Related Topics

Stocks

   
Polluted waters of China

Polluted waters of China

Growing cities, overuse of fertilizers, and factory wastewater have degraded China's water supplies to the extent that half the nation's rivers and lakes are severely polluted.  Slideshow 

NEW YORK, July 25 (Reuters) - Hess Corp said it will increase oil drilling in North Dakota's Bakken prospect this year despite increased costs in the play and the recent fall in world crude prices.

The New York-based company increased its 2012 Bakken capital budget by $1 billion to $3 billion dollars as it eyed ramped up drilling in areas where it has a high working interest in wells.

Hess expects to spend an average $11 million on every Bakken well this year, much higher than its previous estimates of $8.5 million per well after a white sand shortage earlier in the year forced the company to use more expensive ceramic proppants, materials used in hydraulic fracturing.

The company's slower-than-expected transition to the less expensive "sliding sleeve" hydraulic fracturing technology also pushed costs higher.

Nonetheless, Hess reduced its average Bakken well cost to $11.6 million a well in the second quarter, down from $13.4 million per well in the first quarter, Greg Hill, president of worldwide exploration and production, said during the company's second-quarter earnings call.

Hess also plans to spend more on infrastructure projects in North Dakota and foresees higher costs from wells that it has interests in but does not operate.

Hess' production came in better than expected in the second quarter thanks to production from its Bakken properties, where output rose to 55,000 barrels of oil equivalent (BOE) a day in the second quarter, up from 25,000 BOE a day last year.

Oil production in the Bakken prospect rose above 574,000 barrels-per-day in May, according to data from the state Industrial Commission.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Top News

REUTERS SHOWCASE

Kerry's India Visit

Kerry's India Visit

Kerry presses India on WTO deal ahead of arrival  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

L&T Slumps

L&T Slumps

L&T earnings raise 'multiple red flags' - Citi  Full Article 

Twitter Results

Twitter Results

Twitter assuages growth concerns for now as shares soar 35 percent  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Fed Meeting

Fed Meeting

Fed seen trimming bond buys, could offer vague rate clues  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage