Hess Adds To Offshore Guyana Position With New Acquisition

Hess Corp. (NYSE: HES) said April 26 it acquired interest in new acreage offshore Guyana, extending one of the company's "growth engines."

Hess Guyana (Block B) Exploration Ltd., subsidiary of the New York-based E&P, reached an agreement with ExxonMobil Corp. (NYSE: XOM) affiliate Esso Exploration and Production Guyana Ltd. to acquire a 15% participating interest in offshore Guyana's Kaieteur Block.

The terms of the transaction weren't disclosed. The Cooperative Republic of Guyana has provided Hess and ExxonMobil an instrument detailing the transfer of interest, which has been completed.

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Hess considers offshore Guyana, where it currently holds a 30% interest in ExxonMobil-operated Starbroek Block, one of its growth engines, CEO John Hess said during a recent earnings call. Though the company doesn't expect to generate positive cash flow offshore Guyana until about 2022.

The Kaieteur Block lies in the same geological basin as the Stabroek Block, where total recoverable resources of more than 3.2 billion barrels of oil equivalent have been discovered to date.

“Our interest in the Kaieteur block extends our company’s already significant acreage position in the prolific Guyana-Suriname Basin, which has delivered seven world-class oil discoveries to date,” Hess said in a statement April 26. “We look forward to working with our partners and the Government of Guyana to evaluate the potential of this highly prospective acreage.”

The Kaieteur block is located about 250 km offshore the coast of Guyana, adjacent to the Stabroek Block. The Kaieteur Block is about 3.3 million acres (13,535 sq km), which is equivalent in size to more than 580 deepwater blocks in the Gulf of Mexico.

The work program for Kaieteur in 2018 will include processing and interpretation of about 5,700 sq km of 3-D seismic data and evaluation of a future drilling program, according to the company press release.