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Hess Corporation corporate report

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21 August 2017

Hess Corporation corporate report

Report summary

Hess has clearer visibility on growth from 2017, and one of the strongest outlooks relative to peers over the next decade. The production and value proposition will be underpinned by its two flagship resource plays – Bakken tight oil and deepwater Guyana – highlighting the strength of its hybrid portfolio. A strong balance sheet provides the foundation to deliver and investors see value in the portfolio. But Hess has work to do to close the gap to more premium-rated peers and ensure growth isn't derailed by low prices and downside risks. Key objectives will include; 1) ensuring the Bakken can compete with other tight oil plays, 2) delivering the value potential offshore Guyana, and 3) potentially bolstering the portfolio through business development.

Table of contents

  • Other Hess research
  • Executive summary
    • Overview
    • Strategic position
    • Strategic priorities and opportunities
      • 1. Ensure balance sheet strength, capital discipline and shareholder returns
        • Further strategic action needed to balance cash flow below US$50/bbl
        • Options to maintain financial flexibility
      • 2. Value and production growth from the hybrid portfolio
        • 1. US unconventional portfolio: staying competitive
        • Bakken is the primary focus. Are economics reaching the limit?
        • 2. Deliver conventional growth and enhance legacy assets
      • 3. Exploration strategy focused on long-term growth
        • The spotlight will remain on Guyana
        • Hess Guyana-Suriname acreage position
      • 4. Potential new business development; potential strategic shift?
    • Wood Mackenzie base case valuation metrics
    • Wood Mackenzie base case investment and cost metrics
    • Wood Mackenzie base case production metrics
    • Wood Mackenzie base case reserve and resource metrics
    • Economic assumptions

Tables and charts

This report includes 51 images and tables including:

  • SWOT analysis
  • Benchmark: share price performance
  • Benchmark: premium/discount to WM NPV10
  • Strategic fit of upstream regions
  • Benchmark: % NPV10 by resource theme
  • Hess: portfolio split by production 2017 vs. 2021
  • Base case upstream NPV10
  • Current NPV10 vs. future NPV10
  • Upstream EV vs. Upstream NPV10
  • Upstream portfolio sensitivities vs. Upstream EV
  • Forecast development expenditure (nominal)
  • Forecast operating expenditure (nominal)
  • Reported and unit development costs
  • New project returns
  • Reported and WM forecast production
  • Liquids vs. Gas
  • Liquid production
  • Gas production
  • Total reserves: Wood Mackenzie commercial
  • Total reserves: reported vs. Wood Mackenzie
  • Total reserves: reported vs. Wood Mackenzie
  • Reserve life: reported vs. Wood Mackenzie
  • Base price assumptions (nominal terms)
  • Base price assumptions (nominal terms)
  • Base, high and low Brent (nominal terms)
  • High price assumptions
  • Low price assumptions
  • Value assumptions
  • Foreign exchange rate assumptions
  • Financial strength: gearing vs. cash flow breakeven
  • Hess: production by development stage
  • Benchmark: production CAGR
  • Hess: conventional discoveries 2007-2016
  • Hess: portfolio net acreage
  • Hess: year-end net debt outlook
  • Hess: base case corporate cash flow
  • Hess: capex profile 2014-2021
  • Hess: hub valuations and NPV10/boe
  • Benchmark: US unconventional production
  • Benchmark: US Lower 48 NPV10
  • Hess: Bakken sub-play NPV15 breakeven
  • Benchmark: weighted average liquid breakevens
  • Hess Bakken drilling locations (2014-2017)
  • Hess: Lower 48 reserves by NPV15 breakeven
  • Hess: Bakken average IP30 and total well cost
  • Hess: conventional production
  • Hess: upstream cash flow
  • Liza-Payara key assumptions and economics
  • Liza-Payara production and cash flow
  • Liza-Payara economic sensitivities
  • Strategy: Image 26

What's included

This report contains:

  • Document

    Hess Corporate Report.xls

    XLS 3.66 MB

  • Document

    Hess Corporation corporate report

    PDF 6.16 MB

  • Document

    Hess Corporation corporate report

    ZIP 6.94 MB

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