The Rising Influence of Rising Affluence

[DewDiligence]

HES announces 2014 cap-ex budget of $5.8B—half for Bakken/Utica shales:

http://finance.yahoo.com/news/hess-corporation-announces-2014-capital-210500907.html

Hess Corporation announced today a 2014 Exploration and Production capital and exploratory budget of $5.8 billion. Of this, $2.85 billion (49 percent) is dedicated to unconventional shale resources, with $1.475 billion (25 percent) for production, $925 million (16 percent) for developments, and $550 million (10 percent) for exploration.

…Greg Hill, President and COO, stated, “Our expenditures in the Bakken are planned to be $2.2 billion in 2014, flat with 2013. However, as a result of lower well costs and decreased investments in infrastructure projects we plan to operate 17 rigs versus 14 last year and to bring 225 new operated wells online in 2014 compared to 168 in 2013. In addition, we plan to increase our expenditures in the emerging Utica shale play to $550 million from $455 million last year, as we focus our activities on the appraisal and development of the wet gas window.”

See the PR for a breakdown of each of the above categories into additional components as well as a breakdown by geography.

In 2013, HES’ cap-ex (excluding refining & marketing) was $6.7B (#msg-83355795), so 2014 spending of $5.8B is a 13% reduction relative to 2013 (and an even bigger reduction relative to HES’ highest-ever cap-ex in 2012), consistent with HES’ more streamlined business model adopted last year.