The Rising Influence of Rising Affluence

[DewDiligence]

HES leads E&Ps in 2019 share-price performance—credit Guyana:

https://www.wsj.com/articles/hess-has-been-2019s-top-oil-and-gas-stock-it-has-nothing-to-do-with-shale-11566303565

Hess’s popularity with investors is rooted in a small South American nation. The New York-based company holds a 30% stake in an immense offshore oil field being developed by Exxon Mobil Corp. in Guyana that appears poised to become one of the most lucrative megaprojects in years.

The company’s shares have surged more than 50% in 2019, the biggest increase of any major U.S. oil operator, excluding companies acquired in deals.

…Hess acquired its stake in Guyana from Royal Dutch Shell PLC in 2014 for an undisclosed price. The company initially estimated the resource total at about 500 million barrels of oil. Now it appears to be at least 12 times that amount, making it one of the most significant discoveries in decades.

…One challenge for Hess will be keeping up with the spending that Guyana’s abundance will require. The first two of what are likely to be numerous offshore production facilities are expected to cost more than $11 billion over the next 10 years, according to GlobalData. As additional projects ramp up, Hess’s 30% share could grow quite expensive. The company has held excess cash in recent years to assure that it will be prepared to pay those costs.