Chevron Expected To Revitalize Bakken Shale With Hess Acquisition - OilPrice.com
Chevron Expected To Revitalize Bakken Shale With Hess Acquisition | OilPrice.com
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Oil production in the Bakken shale play is set to increase after Chevron’s acquisition of Hess, although volumes are unlikely to hit the records seen before 2020, analysts have told Reuters.
Last week, Chevron said it would buy Hess Corporation in an all-stock transaction valued at $53 billion with a total enterprise value, including debt, at $60 billion. The Hess deal will give Chevron 465,000 net acres of high-quality, long-duration inventory in the Bakken supported by the integrated assets of Hess Midstream, Chevron said.
In the Bakken, Hess Corp’s net production was 190,000 barrels of oil equivalent per day(boepd) in the third quarter of 2023, compared with 166,000 boepd in the prior-year quarter, reflecting increased drilling and completion activity and higher NGL and natural gas volumes received under the percentage of proceeds contracts due to lower commodity prices.
According to analysts briefed by Reuters, Chevron is set to stick to the previous Hess plans for the Bakken shale play. Those plans entailed lifting the net oil-equivalent production to 200,000 boepd in 2025.
North Dakota, the home state of the Bakken, was the second-largest oil-producing state in the United States between 2012 and 2020, right after Texas, before being surpassed by New Mexico thanks to the part of the Permian it hosts.
Crude oil production in North Dakota has been rising this year, per EIA data, but it is still below the records from the end of 2019.
“In the Bakken, Hess holds a strong acreage position with a long queue of economic future drilling locations that will be added to Chevron’s advantaged shale and tight portfolio,” Chevron’s chief executive Mike Wirth said on the call with analysts to discuss the acquisition.
“The Bakken adds another prolific U.S. shale basin to our leading positions in the DJ and Permian, and we expect it will benefit from Chevron’s advancements in technology and performance as we aim to further improve recoveries and enhance returns,” Wirth added.
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By Tsvetana Paraskova for Oilprice.com
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