Hess Corp (HES) Cuts CapEx 18% for FY13

Hess Corporation (NYSE: HES) announced today a 2013 capital and exploratory budget of $6.8 billion, which is down 18 percent from 2012 expenditures of approximately $8.3 billion. Of the $6.7 billion budgeted for Exploration and Production, $2.7 billion (40 percent) is dedicated to unconventional shale resources and the remainder is focused on conventional resources, with $1.85 billion (28 percent) for production, $1.6 billion (24 percent) for developments and $550 million (8 percent) for exploration. As in recent years, $100 million is dedicated to Marketing and Refining and Corporate.

Unconventional expenditures of approximately $2.7 billion include:

* Development of the Bakken Shale in North Dakota, where Hess plans to operate 14 rigs and complete the expansion of the Tioga Gas Plant
* Drilling appraisal wells in the Utica Shale in Ohio

Production expenditures of approximately $1.85 billion include:

* Drilling production wells on Block G (Hess 85 percent – operator) in Equatorial Guinea
* Drilling production and water injection wells at the Valhall Field in Norway (Hess 64 percent) and the South Arne Field in Denmark (Hess 61 percent – operator)
* Drilling production and water injection wells at the Shenzi Field (Hess 28 percent) and drilling a production well at the Llano Field (Hess 50 percent) in the deepwater Gulf of Mexico

Development expenditures of approximately $1.6 billion include:

* Development drilling at the Tubular Bells Field (Hess 57 percent – operator) in the deepwater Gulf of Mexico
* Installation of the early production system and front-end engineering and design for full field development of North Malay Basin (Hess 50 percent – operator)
* Continued development of Block A-18 (Hess 50 percent) in the Joint Development Area in the Gulf of Thailand

Exploration expenditures of approximately $550 million include:

* Further exploration activities on the Deepwater Tano / Cape Three Points Block (Hess 90 percent – operator) in Ghana
* Completing seismic and drilling two wells at the Dinarta and Shakrok Blocks (Hess 80 percent – operator) in Iraqi Kurdistan

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