Gregory P. Hill
President and Chief Operating Officer at Hess
Thanks, John. Although in the second quarter, we experienced continued weather impacts in the Bakken and a ramp up of Liza Phase two that was modestly slower than expected. Net production was up 10% from the first quarter and we anticipate company-wide net production to continue to build in the second half of the year as we bring more wells online in the Bakken, and Liza Phase two operates at nameplate capacity. In the second quarter, company-wide net production averaged 303,000 barrels of oil equivalent per day, excluding Libya. In the third quarter, we expect company-wide net production to increase by approximately 10% from the second quarter and to average between 330,000 and 335,000 barrels of oil equivalent per day, excluding Libya. In the fourth quarter, company-wide net production is expected to further increase to between 365,000 and 370,000 barrels of oil equivalent per day, excluding Libya. For the full year 2022, we now forecast net production to average approximately 320,000 barrels of oil equivalent per day, excluding Libya. Turning to the Bakken. Second quarter net production averaged 140,000 barrels of oil equivalent per day. This was in line with our guidance and reflected the impact of severe weather in April and May. Production is now recovering and is expected to increase to between 155,000 and 160,000 barrels of oil equivalent per day in the third quarter. For the fourth quarter, we forecast net production to further increase to between 160,000 and 165,000 barrels of oil equivalent per day. For the full year 2022, we now forecast Bakken net production to average between 150,000 and 155,000 barrels of oil equivalent per day. This reflects a volume reduction of approximately 7,000 barrels of oil equivalent per day under our percentage of proceeds contracts as a result of higher NGL prices. Although NGL volume entitlements are lower, overall cash flow is substantially higher. In terms of drilling and completion costs, we are continuing to see upward pressure across our supply chains, particularly in oil country tubular goods. As a result, we have increased our full year average drilling and completion cost forecast by $100,000 per well to average $6.3 million per well in 2022. I am proud of our team's effectiveness in mitigating the impacts of inflation, tight supply chains largely through our distinctive lean culture. While we believe the industry is experiencing overall inflation of between 15% and 20%, our full year drilling and completion costs are forecast to increase by only about 8.5% year-over-year.
In the second quarter, we drilled 20 wells and brought 19 new wells online. In the third quarter, we expect to drill approximately 25 wells and to bring approximately 20 new wells online. And for the full year 2022, we now expect to drill approximately 95 wells and to bring between 80 and 85 new wells online, which is slightly lower than previous guidance due to the second quarter weather-related delays in mobilizing equipment. Individual well results in terms of EURs and IP 180s continue to meet or exceed expectations. Earlier this month, we added a fourth drilling rig in the Bakken. Through our strategic partnerships with Nabors and Halliburton we were able to secure a fully staffed, high spec, PACE X class rig and a second completion crew. Moving to a 4-rig program will allow us to grow net production to approximately 200,000 barrels of oil equivalent per day in 2024, which will optimize our in-basin infrastructure and drive further reductions in our unit cash costs. Now moving to the offshore. In the deepwater Gulf of Mexico, second quarter net production averaged 29,000 barrels of oil equivalent per day compared to our guidance of approximately 30,000 barrels of oil equivalent per day. In the third quarter, we forecast Gulf of Mexico net production to average between 25,000 and 35,000 barrels of oil equivalent per day reflecting planned downtime at Tubular Bells and a Penn State well being shut in due to a mechanical issue. This downtime will be partially offset by the planned start-up of the Llano-6 tieback in August, which logged 123 feet of high-quality Miocene pay. For the full year 2022, our forecast for Gulf of Mexico net production is now approximately 30,000 barrels of oil equivalent per day. In June, we completed drilling operations on the Huron prospect on Green Canyon Block 69 with encouraging results. Hess is the operator with a 40% working interest and Chevron and Shell each have 30%. The well encountered high-quality oil-bearing Miocene age reservoirs and established the existence of a working petroleum system. Well results are still being evaluated and an appraisal sidetrack is planned. In Southeast Asia, net production in the second quarter was 67,000 barrels of oil equivalent per day compared to our guidance of approximately 65,000 barrels of oil equivalent per day. Phase three of the North Malay Basin development came online in June and is producing above expectations, and Phase four is on track to achieve first gas in early 2023. Third quarter net production is forecast to average approximately 55,000 barrels of oil equivalent per day, reflecting planned maintenance at both JDA and North Malay Basin. Full year 2022 production is expected to average between 60,000 and 65,000 barrels of oil equivalent per day. Now turning to Guyana. In the second quarter, net production averaged 67,000 barrels of oil per day, reflecting a modest delay in the ramp-up of Liza Phase 2.
Overall, the start-up has been very successful. In July, Liza Phase two reached its nameplate capacity of 220,000 barrels of oil per day or about 56,000 barrels of oil per day net to Hess. For Liza Phase one production optimization work was completed in the second quarter, and the FPSO is now operating at or above its new gross production capacity of 140,000 barrels of oil per day. Earlier this month, SBM Offshore also completed the replacement of the flash gas compressor, which has resulted in high reliability and zero routine flaring. Third quarter net production from Guyana is forecast to increase to a range of 90,000 to 95,000 barrels of oil per day and average approximately 75,000 barrels of oil per day for the full year 2022. With regard to our third development of Payara, topside fabrication and installation on the Prosperity FPSO is well underway in Singapore and development drilling in Guyana continues at pace. The project, which will have a gross production capacity of 220,000 barrels of oil per day is now more than 80% complete and is well on track to achieve first oil in late 2023. In April, we sanctioned a fourth development at the Yellowtail, which will develop approximately 925 million barrels of oil and have a breakeven Brent oil price of approximately $29 per barrel. The project will have a gross production capacity of 250,000 barrels of oil per day and is on track to achieve first oil in 2025. As for our fifth development at Uaru-Mako, the operator anticipates submitting the plan of development to the government of Guyana in the fourth quarter with first oil targeted for 2026, pending government approvals and project sanctioning. Turning to exploration. Yesterday, we announced two new discoveries on the Stabroek Block. The CBOB one well encountered 131 feet of high-quality oil-bearing Upper Campanian sandstone reservoirs. The well is located in the southeastern part of the block, approximately 12 miles southeast of the Yellowtail field. The Kiru-Kiru one well has also thus far encountered 98 feet of high-quality hydrocarbon-bearing Upper Campanian sandstone reservoirs. The well is currently drilling ahead to test deeper intervals and is located in the southeastern part of the block, approximately three miles southeast of the Cataback-1 discovery. Both discoveries will add to the gross discovered recoverable resource estimate for the block of approximately 11 billion barrels of oil equivalent. In terms of future drilling activity on the Stabroek Block.
Next up in the queue are Yarrow and Banjo. The Yarrow-1 well will test stacked Upper Campanian targets, updip of discoveries at Whiptail and Tilapia. The well is located 19 miles south of the Yellowtail-1 discovery well. The Banjo-1 well will also target stacked upper Campanian targets west of Barreleye and updip of Mako. The well is located eight miles northwest of the Barreleye-1 discovery well. These wells will appraise the development potential of the inboard oil play in the southeastern portion of the block. In addition, on Block 42 in Suriname, we will participate in the Zanderi-1 exploration well. The Shell-operated well is expected to spud in late August and will test both Upper Campanian and deeper play stack targets. Hess, Chevron and Shell each have a 1/3 working interest. In closing, our Bakken assets are now recovering from the severe weather impacts experienced in the first half of the year, and we expect to see steady production growth in the coming quarters, particularly with the addition of the fourth rig. We had positive drilling results in the Gulf of Mexico at both Llano six and Huron and have a robust inventory of both infrastructure-led tieback opportunities and exploration prospects. Malaysia continues to generate steady production and cash flow, and our extraordinary success in Guyana continues on all fronts. Our distinctive long-life portfolio uniquely positions us to deliver material and accelerating production and free cash flow growth and significant value to our shareholders.
I will now turn the call over to John Rielly.