NEW YORK - Hess Corporation (NYSE: NYSE:HES) has announced its final investment decision to advance the Whiptail development, the company's sixth project on the Stabroek Block, following the receipt of necessary government and regulatory approvals. The development is projected to contribute approximately 250,000 barrels of oil per day to the company's gross production capacity by the end of 2027.
The Whiptail development, with an investment of $12.7 billion, targets an estimated resource base exceeding 850 million barrels of oil. It will comprise up to 10 drilling centers alongside 48 production and injection wells. The Jaguar, a floating production, storage, and offloading (FPSO) vessel, is currently under construction to facilitate this expansion.
John Hess, CEO of Hess Corporation, expressed the company's commitment to the project, highlighting its alignment with global energy demand and the energy transition. Meanwhile, current developments on the Stabroek Block, including Liza Phase 1, Liza Phase 2, and Payara, are collectively producing over 640,000 barrels of oil per day. Additional projects, Yellowtail and Uaru, are underway with expected production commencements in 2025 and 2026, respectively, each contributing a similar production capacity as Whiptail.
The Stabroek Block, covering 6.6 million acres, is operated by ExxonMobil (NYSE:XOM) Guyana Limited with a 45% interest. Hess Guyana Exploration Ltd. holds a 30% interest, while CNOOC (NYSE:CEO) Petroleum Guyana Limited owns the remaining 25%.
Hess Corporation, a global independent energy company, is engaged in the exploration and production of crude oil and natural gas. The company's forward-looking statements in the press release reflect its expectations for future projects and production capacities. These statements, however, are subject to various risks and uncertainties that could impact actual results.
InvestingPro Insights
As Hess Corporation (NYSE: HES) gears up for the ambitious Whiptail development, investors are eyeing the company's financial metrics and market performance to gauge the potential impact of this strategic move. With an impressive commitment to dividend payments, having maintained them for 38 consecutive years, Hess presents a picture of reliability for income-focused shareholders. This dedication to returning value to investors is underscored by the company's moderate level of debt, which allows for financial flexibility in advancing new projects like Whiptail.
From a market perspective, Hess's stock has been trading near its 52-week high, reflecting a strong investor confidence that may be buoyed by the company's profitable performance over the last twelve months. This profitability is anticipated to continue, as analysts predict Hess will remain profitable this year. The company's financial discipline and strategic investments have also yielded a strong return over the last five years, a trend that shareholders hope will persist as the Whiptail development progresses.
InvestingPro Data further enriches the picture with a market capitalization of 48.41 billion USD, indicating the company's significant presence in the market. The P/E ratio stands at 34.78, suggesting a higher valuation compared to the industry average, which could be attributed to the optimistic growth prospects tied to the company's ongoing and upcoming projects. Additionally, the revenue for the last twelve months as of Q4 2023 was reported at 10.29 billion USD, a figure that underscores the company's robust financial standing.
For investors seeking a deeper dive into Hess's financial health and market potential, there are additional InvestingPro Tips available, offering insights such as earnings revisions by analysts and stock volatility trends. To access these tips and more, visit https://www.investing.com/pro/HES and don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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