American exploration and production company, Hess Corporation, informed the market today that it has entered into an agreement to sell its 28 percent working interest in the Shenzi field located in the Gulf of Mexico. The sale was executed with BHP, a UK firm, for US$505M.
The acquisition would bring BHP’s working interest in the Shenzi project to 72 percent and immediately add approximately 11,000 barrels of oil equivalent per day of production (90 percent oil). The field produced an average of 11,000 net barrels of oil equivalent per day in the first eight months of 2020.
Upon announcing that decision was made to sell its 28 percent interest, Chief Executive Officer of the oil company, John Hess, disclosed that the proceeds would be used to fund its world-class investment in Guyana. The CEO said that the sale is aligned with his company’s strategy to preserve cash and preserve the long-term value of its assets in the current low oil price environment.
The transaction is expected to close before year-end 2020 and is subject to customary closing conditions.
Hess currently holds a 30 percent working interest in the Stabroek Block which holds over eight billion barrels of oil equivalent resources. The company also disclosed last week that it would be expending some US$1.8B on development works for the Payara field which represents the third oil development on the block. It is projected to take gross production capacity to approximately 560,000 barrels of oil per day by 2024.