Integrated oil company
Hess Corporation
(
HES
) has unveiled its capital and exploration budget for 2012. The
company intends to expend around $6.80 billion, of which nearly
98.5% will be targeted toward exploration and production.
Marketing, refining and corporate spending for the year will be
approximately $100 million.
Of the total budget, Hess plans to put in approximately $2.50
billion for unconventional resource development that revolves
around exploration in the Bakken Shale in North Dakota, where the
company expects to operate 16 rigs and move ahead with the
expansion the Tioga Gas Plant. Hess also plans to continue its
activities in the Eagle Ford Shale in Texas and the Utica Shale in
Ohio.
Management has assigned almost $1.60 billion for production,
which includes drilling wells at Shenzi and Llano fields in the
Gulf of Mexico and at Block G in Equatorial Guinea.
Hess' development spending budget is $1.80 billion, while
approximately $800 million has been allocated for exploration
purpose.
The company plans to utilize its development spending budget for
the operations at the Tubular Bells Field in the Gulf region,
projects at the Valhall Field in Norway, appraisal activities at
WA-390-P, offshore Western Australia and expansion of Block A-18 in
the Gulf of Thailand.
Regionally, Hess will invest about $3.35 billion in the United
States, $1.30 billion in Europe and $1.40 billion in Asia and
Other. Africa will witness a spending of about $650 million.
New York-based Hess will announce its fourth quarter and full
year 2011 earnings results on January 25, 2012. As per the Zacks
Consensus Estimate, Hess will report an earnings of $1.48 per share
in the fourth quarter and earnings per share of $6.15 for the full
year.
Over the long term, we expect the company to perform on par with
the broader industry and maintain a Neutral recommendation. Hess,
which faces competition from
ConocoPhillips
(
COP
), currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating.
CONOCOPHILLIPS (
COP
): Free Stock Analysis Report
HESS CORP (
HES
): Free Stock Analysis Report
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