Hess Q3 2022 Earnings Report

Hess EPS Results

• Actual EPS: $1.89
• Consensus EPS: $1.88
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Hess Revenue Results

• Actual Revenue: $3.16 billion
• Expected Revenue: $2.94 billion
• Beat/Miss: Beat by +$217.59 million
• YoY Revenue Growth: N/A

Hess Announcement Details

• Quarter: Q3 2022
• Date: 10/26/2022
• Time: N/A
• Conference Call Date: Wednesday, October 26, 2022
• Conference Call Time: 10:00AM ET

Hess (NYSE:HES), an exploration and production company, explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. The company operates in two segments, Exploration and Production, and Midstream. It conducts production operations primarily in the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities principally offshore Guyana, the U.S. Gulf of Mexico, and offshore Suriname and Canada. The company is also involved in gathering, compressing, and processing natural gas; fractionating NGLs; gathering, terminaling, loading, and transporting crude oil and NGL through rail car; and storing and terminaling propane, as well as providing water handling services primarily in the Bakken Shale plays in the Williston Basin area of North Dakota. The company was incorporated in 1920 and is headquartered in New York, New York.

Hess Q3 2022 Earnings Call Transcript

Key Takeaways

• Global oil demand has rebounded to roughly 100 MMbpd and is expected to grow by at least 1 MMbpd in 2023 despite recessionary risks, while supply remains tight and inventories sit 300 MMbbl below pre-COVID levels.
• Hess’s strategy focuses on a high-return, low-cost portfolio in Guyana, the Bakken, the Gulf of Mexico and Southeast Asia to achieve over 10% annual production growth and breakeven costs of $25–35/bbl Brent in Guyana.
• At a $65 Brent price, Hess forecasts ~25% annual cash-flow growth from 2021–2026, with debt/EBITDAX under 1× by 2024 and a commitment to return up to 75% of free cash flow to shareholders via dividends and buybacks.
• In Guyana, four FPSOs on the Stabroek Block now produce 360 Mbpd gross, Payara (220 Mbpd) is on track for end-2023 first oil, Yellowtail (250 Mbpd) targets 2025 startup, and nine discoveries this year have raised total recoverable resources to ~11 Bboe.
• Q3 net production averaged 351 kboe/d (ex-Libya), beating guidance, with Q4 expected around 370 kboe/d; the Bakken is ramping toward a ~200 kboe/d plateau by 2024 with a four-rig drilling program.

Presentation

[Operator]

Good day, ladies and gentlemen, and welcome to the third quarter 2022 Hess Corporation conference call. My name is Carmen, and I'll be your operator for today. At this time, all participants are in a listen-only mode. After, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Jay Wilson, Vice President of Investor Relations. Please proceed.

[Jay Wilson, VP of Investor Relations at Hess Corporation]

Thank you, Carmen. Good morning, everyone, and thank you for participating in our third quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hess.com. Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the Risk Factors section of Hess's annual and quarterly reports filed with the SEC. Also on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website.

[Jay Wilson, VP of Investor Relations at Hess Corporation]

On the line with me today are John Hess, Chief Executive Officer, Greg Hill, Chief Operating Officer, and John Rielly, Chief Financial Officer. In case there are any audio issues, we will be posting transcripts of each speaker's prepared remarks on www.hess.com following the presentation. I'll now turn the call over to John Hess.

[John Hess, CEO at Hess Corporation]

Thank you, Jay. Good morning. Welcome to our third quarter conference call. Today, I will share some thoughts about the oil markets and then review our progress in executing our strategy. Greg Hill will then discuss our operations, and John Rielly will review our financial results. Global oil demand has returned to pre-COVID levels of approximately 100 million barrels per day. As we look to 2023, even with a recessionary environment and a slowing world economy, we expect global oil demand to grow by at least 1 million barrels per day, driven by China reopening its economy and an increase in global air travel. Oil supply, on the other hand, continues to struggle to keep up with global demand. Global oil inventories are approximately 300 million barrels less than pre-COVID levels, and there is very little spare production capacity in the world.

[John Hess, CEO at Hess Corporation]

Oil markets were tight even before Russia invaded Ukraine and are expected to get even tighter this winter, with the potential for further sanctions on Russian oil exports. The world is facing a structural supply deficit, and significantly more global oil investment is needed. According to the International Energy Agency, a reasonable estimate for the global oil and gas investment needed for supply to meet demand is approximately $500 billion each year over the next 10 years. The last 5 years have seen significant underinvestment, which will tighten supply as global oil demand grows in the years ahead. The International Energy Agency's World Energy Outlook provides multiple scenarios for addressing the dual challenge of growing global energy supply by about 20% over the next 20 years and reaching net zero emissions by 2050.

[John Hess, CEO at Hess Corporation]

In all of these IEA scenarios, oil and gas will be needed for decades to come. To ensure an affordable, just, and secure energy transition, we need to invest significantly more in oil and gas, and we also must have government policies that encourage investment rather than discourage it. In a world that will need reliable, low-cost oil and gas resources for decades to come, Hess is very well positioned. Our strategy is to deliver high return resource growth, a low cost of supply, and industry-leading cash flow growth, and at the same time, maintain our industry leadership in environmental, social, and governance performance and disclosure. Our successful execution of this strategy has uniquely positioned our company to deliver significant value to shareholders for years to come by growing both intrinsic value and cash returns.

[John Hess, CEO at Hess Corporation]

By investing only in high return, low cost opportunities, we have built a differentiated and balanced portfolio focused on Guyana, the Bakken, Deepwater Gulf of Mexico, and Southeast Asia. With multiple phases of low cost oil developments coming online in Guyana and our robust inventory of high return drilling locations in the Bakken, we can deliver highly profitable production growth of more than 10% annually over the next 5 years. As our high-quality resource base expands, we will steadily move down the cost curve. Our 4 sanctioned oil developments in Guyana have a break-even Brent oil price of between $25 and $35 per barrel. In terms of cash flow growth, we have an industry-leading rate of change story and durability story, providing a unique value proposition.

[John Hess, CEO at Hess Corporation]

Based upon a flat Brent oil price of $65 per barrel, our cash flow is forecast to increase by approximately 25% annually between 2021 and 2026, more than twice as fast as our top line growth. Our balance sheet will also continue to strengthen, with debt to EBITDA expected to decline to under 1x in 2024. As our portfolio becomes increasingly free cash flow positive in the coming years, we are committed to returning up to 75% of our annual free cash flow to shareholders, with the remainder going to strengthen the balance sheet by increasing our cash position or further reducing our debt.

[John Hess, CEO at Hess Corporation]

We continued common stock repurchases during the third quarter, repurchasing $150 million of stock as part of the $650 million stock repurchase program announced earlier this year, and we intend to repurchase the remaining $310 million of stock in the fourth quarter. Looking ahead, we plan to continue increasing our regular dividend to a level that is attractive to income-oriented investors, but sustainable in a low oil price environment. As our free cash flow generation steadily increases in the years ahead, share repurchases will represent a growing proportion of our return of capital. Key to our strategy is Guyana, one of the industry's highest margin, lowest carbon intensity, and highest growth oil and gas prospects, according to Wood Mackenzie data.

[John Hess, CEO at Hess Corporation]

On the Stabroek Block in Guyana, where Hess has a 30% interest and ExxonMobil is the operator, we continue to see the potential for 6 floating production storage and offloading vessels, or FPSOs, in 2027, with a gross production capacity of more than 1 million barrels of oil per day and up to 10 FPSOs to develop the discovered resources on the block. In terms of our sanctioned oil developments on the block, the Liza phase I and Liza phase II developments are currently operating at their combined gross production capacity of more than 360,000 barrels of oil per day. Our third development, the Payara field, with a gross production capacity of approximately 220,000 barrels of oil per day, remains on schedule for startup at the end of 2023.

[John Hess, CEO at Hess Corporation]

Our fourth development, Yellowtail, which was sanctioned in April, will be the largest development to date on the Stabroek Block, with first oil expected in 2025. The project will develop an estimated recoverable resource base of approximately 925 million barrels of oil and have a gross production capacity of approximately 250,000 barrels of oil per day. Front-end engineering and design work for our fifth development at Uaru is well underway, with a plan of development expected to be submitted to the government before year-end. In terms of exploration and appraisal in Guyana, this morning we announced 2 new discoveries on the block at Yarrow and Sailfin, bringing our total this year to 9. These discoveries will add to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion barrels of oil equivalent.

[John Hess, CEO at Hess Corporation]

We continue to see multi-billion barrels of future exploration potential remaining. In Suriname, we recently drilled the Zanderij-1 well, where Hess has a 33% interest and Shell is the operator. The well demonstrated a working petroleum system and encountered oil pay. The well results are being evaluated and further exploration activities are being considered. Turning to sustainability, we are proud to be recognized as an industry leader in our environmental, social, and governance performance and disclosure. Hess has once again achieved level- 4 status in the Transition Pathway Initiative's recent Management Quality Assessment, which is the highest level awarded to companies that demonstrably manage climate-related risks and opportunities from a governance, operational, and strategic perspective, in line with the Task Force on Climate-related Financial Disclosures TCFD recommendations. In summary, we continue to successfully execute our strategy and deliver strong operational and ESG performance.

[John Hess, CEO at Hess Corporation]

We truly offer a unique value proposition to grow both our intrinsic value and our cash returns by increasing our resource base, delivering a lower cost of supply, and generating the best cash flow growth among our peers, major oil companies, and the top quartile of the S&P 500. As our portfolio becomes increasingly free cash flow positive, we will continue to prioritize the return of capital to our shareholders through further dividend increases and share repurchases. I will now turn the call over to Greg Hill for an operational update.

[Greg Hill, COO at Hess Corporation]

Thanks, John. In the third quarter, we delivered strong operational performance. Company-wide net production averaged 351,000 barrels of oil equivalent per day, excluding Libya, compared to our guidance of 330,000-335,000 barrels of oil equivalent per day. This production beat reflects strong performance across our portfolio. For the fourth quarter, we expect company-wide production to average approximately 370,000 barrels of oil equivalent per day, excluding Libya. For the full year 2022, we now expect company-wide net production to average approximately 325,000 barrels of oil equivalent per day, excluding Libya, up from our previous guidance of approximately 320,000 barrels of oil equivalent per day. Turning to the Bakken, third quarter net production averaged 166,000 barrels of oil equivalent per day.

[Greg Hill, COO at Hess Corporation]

This was above our guidance of 155,000-160,000 barrels of oil equivalent per day and primarily reflected strong execution and recovery following the challenging weather conditions in the first half of the year. For the fourth quarter, we expect Bakken net production to average between 165,000 and 170,000 barrels of oil equivalent per day. For the full year 2022, we now forecast Bakken net production to average approximately 155,000 barrels of oil equivalent per day, which is the high end of our previous guidance range of 150,000-155,000 barrels of oil equivalent per day. In the third quarter, we drilled 20 wells and brought 22 new wells online.

[Greg Hill, COO at Hess Corporation]

For the fourth quarter, we expect to drill approximately 30 wells and to bring approximately 25 new wells online. For the full year 2022, we expect to drill approximately 90 wells and to bring approximately 80 new wells online. In terms of drilling and completion costs, although we continue to experience cost inflation, we are maintaining our full year average forecast of $6.3 million per well in 2022. Given the improvement in oil prices and a robust inventory of high return drilling locations, we added a fourth rig in July. Our four-rig program will allow us to grow net production to approximately 200,000 barrels of oil equivalent per day in 2024, which will maximize free cash flow generation, optimize our in-basin infrastructure, and drive further reductions in our unit cash costs. Now moving to the offshore.

[Greg Hill, COO at Hess Corporation]

In the Deepwater Gulf of Mexico, third quarter net production averaged 30,000 barrels of oil equivalent per day, which was at the high end of our guidance range of 25,000 to 30,000 barrels of oil equivalent per day, primarily reflecting the successful startup of the Shell operated Llano 6 tieback. For the fourth quarter and full year 2022, we forecast Gulf of Mexico net production to average approximately 30,000 barrels of oil equivalent per day. In Southeast Asia, net production in the third quarter was 57,000 barrels of oil equivalent per day, above our guidance of approximately 55,000 barrels of oil equivalent per day. Planned maintenance work was successfully completed at both the North Malay Basin and JDA assets during the third quarter.

[Greg Hill, COO at Hess Corporation]

Fourth quarter and full year 2022 net production is forecast to average between 60,000 and 65,000 barrels of oil equivalent per day. Now turning to Guyana. In the third quarter, net production from the Liza phase I and phase II developments averaged 98,000 barrels of oil per day, including tax barrels of 7,000 barrels of oil per day, above our guidance of 90,000-95,000 barrels of oil per day. Both the Liza Destiny and Liza Unity floating production storage and offloading vessels delivered strong operating performance and high facility uptime during the quarter. Guyana net production is forecast to average approximately 110,000 barrels of oil per day in the fourth quarter, including tax barrels of 20,000 barrels of oil per day.

[Greg Hill, COO at Hess Corporation]

For the full year 2022, Guyana net production is forecast to average approximately 77,000 barrels of oil per day, including tax barrels of 7,000 barrels of oil per day, slightly above our previous guidance of 75,000 barrels of oil per day. Turning to our third sanctioned development at Payara, topside insulation and development drilling are underway. The overall project is approximately 88% complete. The FPSO Prosperity will have a gross production capacity of 220,000 barrels of oil per day and is on track to achieve first oil at the end of 2023. Our fourth sanctioned development, Yellowtail, will utilize the ONE Guyana FPSO with a gross capacity of approximately 250,000 barrels of oil per day.

[Greg Hill, COO at Hess Corporation]

Fabrication of topside modules kicked off in September, and the hull is expected to arrive in Singapore in early 2023. The overall project is approximately 29% complete and is on track to achieve first oil in 2025. With regard to our fifth development, Uaru, the operator plans to submit a plan of development to the government before the end of this year, with approval expected by the end of the first quarter of 2023. The plan utilizes an FPSO with a gross capacity of approximately 250,000 barrels of oil per day, with first oil targeted for the end of 2026. As John mentioned this morning, we announced discoveries at Yarrow and Sailfin. The Yarrow-1 well, located approximately 9 miles southeast of the Barreleye-1 well, encountered 75 feet of high-quality oil-bearing sandstone reservoir.

[Greg Hill, COO at Hess Corporation]

The Sailfin-1 well, located approximately 15 miles southeast of the Turbot-1 well, encountered 312 feet of high quality hydrocarbon-bearing sandstone reservoir. The Banjo-1 well did not encounter commercial quantities of hydrocarbons and was expensed in the third quarter. On Block 42 in Suriname, we recently drilled the Zanderij-1 well, where Hess has a 33% interest and Shell is the operator. The well demonstrates a working petroleum system and encountered oil pay. The well results are being evaluated and further exploration activities are being considered. Looking forward, fourth quarter exploration and appraisal activities on the Stabroek Block in Guyana will include the Fangtooth Southeast-1 well, which is a deep test located approximately 8 miles southeast of the Fangtooth-1 discovery well. We will also drill the Fish-1 exploration well, located approximately 62 miles northwest of Liza-1. This well will target multiple stacked reservoir intervals.

[Greg Hill, COO at Hess Corporation]

In addition, we plan to drill the Lancetfish-1 well, located approximately 3 miles west of the Liza-3 well, which will target deeper reservoirs. In closing, our execution continues to be strong. The Bakken is on a strong capital efficient growth trajectory. Our Gulf of Mexico and Southeast Asia assets continue to generate significant free cash flow, and Guyana continues to get bigger and better, all of which position us to deliver industry-leading returns, material free cash flow generation, and significant shareholder value. I will now turn the call over to John Rielly.

[John Rielly, CFO at Hess Corporation]

Thanks, Greg. In my remarks today, I will compare results from the third quarter of 2022 to the second quarter of 2022. We had net income of $515 million in the third quarter of 2022, or $583 million on an adjusted basis. Net income was $667 million in the second quarter of 2022. Turning to E&P. E&P adjusted net income was $626 million in the third quarter, compared with $723 million in the second quarter. The changes in the after-tax components of E&P earnings between the third and second quarter of 2022 were as follows. Higher sales volumes increased earnings by $370 million. Lower realized selling prices decreased earnings by $314 million.

[John Rielly, CFO at Hess Corporation]

Higher DD&A expense decreased earnings by $70 million. Higher cash costs and midstream tariffs decreased earnings by $55 million. Higher exploration expenses decreased earnings by $22 million. All other items decreased earnings by $6 million for an overall decrease in third quarter earnings of $97 million. In the third quarter, we sold 8 cargoes of crude oil in Guyana, up from 6 cargoes in the second quarter. For the third quarter, our E&P sales volumes were underlifted compared with production by approximately 1 million barrels, which decreased our after-tax income by approximately $50 million. In the fourth quarter, we expect to sell 9 cargoes from Guyana. Turning to Midstream. The Midstream segment had net income of $68 million in the third quarter of 2022, compared with $65 million in the second quarter.

[John Rielly, CFO at Hess Corporation]

Midstream EBITDA before non-controlling interest amounted to $252 million in the third quarter of 2022, compared to $241 million in the previous quarter. Turning to our financial position. At September 30th, excluding the Midstream segment, cash and cash equivalents were $2.38 billion, and total liquidity was $5.73 billion, including available committed credit facilities, while debt and finance lease obligations totaled $5.6 billion. In the third quarter, we continued our common stock share repurchases with the purchase of approximately 1.4 million shares for $150 million. We intend to acquire the remaining board-authorized amount of $310 million in the fourth quarter of this year.

[John Rielly, CFO at Hess Corporation]

Total cash returned to shareholders in the third quarter amounted to $265 million, including dividends. Net cash provided by operating activities before changes in working capital was $1.4 billion in the third quarter, compared with $1.5 billion in the second quarter, primarily due to lower realized selling prices. In the third quarter, changes in operating assets and liabilities decreased cash flow from operating activities by $66 million. E&P capital and exploratory expenditures were $701 million in the third quarter and $622 million in the second quarter. Now, turning to guidance. First, for E&P. Our E&P cash costs in the third quarter of 2022 were $13.19 per barrel of oil equivalent, including Libya, and $13.64 per barrel of oil equivalent excluding Libya.

[John Rielly, CFO at Hess Corporation]

We project E&P cash costs excluding Libya to be in the range of $13-$13.50 per barrel of oil equivalent for the fourth quarter, and in the range of $13.50-$14 per barrel of oil equivalent for the full year, which is unchanged from our previous guidance. DD&A expense was $12.56 per barrel of oil equivalent, including Libya, and $13.03 per barrel of oil equivalent excluding Libya in the third quarter. DD&A expense excluding Libya is forecast to be in the range of $13-$13.50 per barrel of oil equivalent for the fourth quarter, and $12.50-$13 per barrel of oil equivalent for the full year, which is also unchanged from our previous guidance.

[John Rielly, CFO at Hess Corporation]

This results in projected total E&P unit operating costs excluding Libya to be in the range of $26-$27 per barrel of oil equivalent for both the fourth quarter and full year 2022. Exploration expenses excluding dry hole costs are expected to be approximately $40 million in the fourth quarter and approximately $155 million for the full year, which is down from our previous full year guidance of $160-$170 million. The midstream tariff is projected to be approximately $310 million for the fourth quarter and approximately $1.205 billion for the full year, which is within the range of our previous full-year guidance of $1.19 billion-$1.215 billion.

[John Rielly, CFO at Hess Corporation]

E&P income tax expense, excluding Libya, is expected to be approximately $210 million for the fourth quarter and approximately $560 million for the full year, which is up from our previous full-year guidance range of $540 million-$550 million. We expect non-cash option premium amortization, which will be reflected in our realized selling prices, will be approximately $165 million for the fourth quarter. Our E&P capital and exploratory expenditures are expected to be approximately $800 million in the fourth quarter, and full-year guidance of approximately $2.7 billion remains unchanged.

[John Rielly, CFO at Hess Corporation]

For midstream, we anticipate net income attributable to Hess from the midstream segment to be approximately $65 million for the fourth quarter and approximately $270 million for the full year, which is the midpoint of our previous full-year guidance range of $265 million-$275 million. For corporate expenses are estimated to be approximately $35 million for the fourth quarter and approximately $135 million for the full year, which is down from our previous full-year guidance of approximately $150 million.

[John Rielly, CFO at Hess Corporation]

Interest expense is estimated to be approximately $85 million for the fourth quarter and approximately $345 million for the full year, which is at the lower end of our previous full-year guidance range of $345 million-$350 million. This concludes my remarks. We'll be happy to answer any questions. I will now turn the call over to the operator.

[Operator]

Thank you. Ladies and gentlemen, if you have a question, please press star, followed by one one on your phone. Questions will be taken in the order received. Please press star one one to begin. One moment, please. One moment for our first question. Our first question comes from the line of Arun Jayaram with JPMorgan Securities. Your line is open.

[Arun Jayaram, Equity Research Analyst at JPMorgan Securities]

Yeah. Good morning, Arun Jayaram from JPMorgan.

[John Rielly, CFO at Hess Corporation]

Morning.

[Arun Jayaram, Equity Research Analyst at JPMorgan Securities]

Morning, guys. John, I know you guys are pretty knee-deep in your planning and budgeting process, but I was wondering if you could offer any, you know, soft guidance commentary for 2023 as we think about volumes, and CapEx and what is obviously in a little bit more of an inflationary environment, in particular, you know, offshore.

[John Rielly, CFO at Hess Corporation]

Sure, Arun. Thanks for the question. You know, as usual, we will provide, you know, to your point, our 2023 capital guidance in January. I'll try to give you some high level information now compared to 2022. If we're gonna start with Guyana. In 2022, we have $1 billion of development spend. As you know, that includes 2 projects, Payara and Yellowtail. In 2023, we will continue spending on Payara and Yellowtail, but we will add, subject to government approval, a third development project at Uaru, and to a lesser amount, a gas to energy project as well.

[John Rielly, CFO at Hess Corporation]

While the Uaru project is going to have industry-leading returns and a low cost of supply, the cost of the Uaru project, you know, as you mentioned, will be higher reflecting the current market conditions, as well as additional scope to reduce greenhouse gas emissions. With that, we currently expect our Guyana spend to increase by approximately $500 million-$700 million in 2023. You know, the midpoint of that would be going up from $1 billion to $1.6 billion. In the Bakken, we are spending approximately $850 million this year, and, you know, we added the fourth rig later in the year. We expect an additional $250 million of spend in 2023, reflecting a full year of a four-rig program.

[John Rielly, CFO at Hess Corporation]

That, you know, that four-rig program as well as the expected industry inflation drives that $250 million increase there in the Bakken. In the Gulf of Mexico, you know, we are still finalizing our 2023 program, but we do see the potential for 2 well tiebacks and also one hub class exploration opportunity. With that, it's approximately a $150 million increase in the Gulf of Mexico. Therefore, you know, adding those up, taking the midpoint of the Guyana number, we expect our 2023 capital exploratory spend, and again, it's preliminary, to be approximately $3.7 billion or about $1 billion more than 2022.

[Arun Jayaram, Equity Research Analyst at JPMorgan Securities]

Great. Any thoughts on just overall volumes or too premature at this point?

[John Rielly, CFO at Hess Corporation]

It is premature at this point. I mean, again, think about us from a longer-term standpoint of production growth. You know, we've seen that we can grow our top line production growth, and it's just an output of the great opportunities that we have in Guyana that over the long term, you know, we can grow it greater than 10%. 'Cause just think about in 2024 now, as Greg mentioned earlier, we'll get the Bakken to 200,000 barrels a day, and then we'll have Payara on as well. That's gonna add another 50,000-55,000 barrels. You know, right then add those 2 together, you're almost up 25% absolute from where we are right now.

[Arun Jayaram, Equity Research Analyst at JPMorgan Securities]

Again, as we move into next year, we'll give that production guide early in the year. But you know, the growth is gonna be lumpy basically when the FPSOs come online. That's how you should think about it as we move into next year. Great. Just my follow-up, I wanted to. I'm getting some buy-side queries on ExxonMobil's release today, and maybe you could just help clarify. They mentioned in their release that they expect Guyana's oil productive capacity to be more than 1 million barrels by the end of the decade. John, today, you mentioned, you know, 6 FPSOs by 2027, which is in line with, you know, the consortium's previous outlook. Anything in that, you know, comment in ExxonMobil's release that you could kind of clarify?

[John Hess, CEO at Hess Corporation]

No, you have to ask ExxonMobil about that. Our comment about by 2027 having productive capacity gross of over 1 million barrels of oil per day, that's very consistent with what ExxonMobil has said the last several years, and that's the correct.

[Arun Jayaram, Equity Research Analyst at JPMorgan Securities]

Okay, great. Probably just semantics. Thanks a lot, John.

[Operator]

Thank you. One moment for our next question, please. Our next question comes from the line of Doug Leggate with Bank of America. Your line is open.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

Oh, I love the pronunciation. Good morning, everybody.

[John Hess, CEO at Hess Corporation]

Good morning, Doug.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

John, I guess I would like to, sorry to beat up on this last point that Arun mentioned, but I know I've asked you, and I've asked ExxonMobil this before, and anyone who's listened then knows that ExxonMobil's answer is they're basically being conservative. Tell me why, with the long plateaus that you're clearly gonna have in these boats, does a production capacity of an additional 5 and 6 at 220 doesn't get you close to 1.3. Over 1 million just seems to me is getting a bit old, pardon the expression, but it looks to us that you're at least 30% over that with what you've got line of sight on. Why is that not right?

[John Hess, CEO at Hess Corporation]

Doug, you know, I think the 2027 number of 6 FPSOs and at least 1 million barrels a day of gross production is a good number. It's a conservative number. Is there some upside to that? Yes, there certainly is.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

Is my math wrong?

[John Hess, CEO at Hess Corporation]

No. Well, as opposed to talking your math, let's talk about our math. We're saying 1 million barrels a day, 6 FPSOs, 2027, there's upside to that number.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

Okay. All right. Sorry to press. All right. My follow-up is, as you look into John's obviously walked through the CapEx story, obviously the cash, you know, the recovery of the cash flow of CapEx in Guyana, you know, makes a lot of that obviously just somewhat moot to the overall cash return story, I guess, given how quickly you get the money back. I guess my question is that the 75% of free cash flow target, you're clearly lagging that this year. What can we expect by way of an inflection in cash returns in 2023 at, let's say, current strip?

[John Hess, CEO at Hess Corporation]

Yeah, Doug, thanks for the question. It's an excellent one. As we look to 2023, our financial priorities remain first to invest in our high return opportunities, especially in Guyana and Bakken that John talked about, the $3.7 billion-dollar capital program. Second, to maintain a strong cash position and balance sheet to ensure that we can fund these high return opportunities and investments through the cycle. We would give strong consideration next year to further increasing our regular dividend. Following that, in line with the capital return program, where we have committed to returning the remainder of our free cash flow up to 75% through share repurchases.

[John Hess, CEO at Hess Corporation]

Similar to this year, we have the flexibility to return in excess of 75%. You'll recall, at the end of the quarter, we had $2.38 billion of cash on the balance sheet. We have flexibility for next year. Depending upon market conditions, oil prices, financial prices, where the recession and the economic slowdown come out, we'll be positioned to increase our return of capital further. But that's gonna be a decision that we'll make as we go into next year. First, to make sure that we can fund our high return programs. Second, keep the strong balance sheet. Third, increase the dividend.

[John Hess, CEO at Hess Corporation]

Anything left over as we go out, not just next year, but in the years ahead, and we deliver increasing levels of free cash flow, we expect share repurchases will represent a growing proportion of our capital return program, in the years ahead.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

Sorry, John, just to be clear, you've got a debt maturity next year. How much is that?

[John Rielly, CFO at Hess Corporation]

It's actually in 2024, and it's $300 million in 2024. We do expect to

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

24. Got it.

[John Rielly, CFO at Hess Corporation]

Yeah. Hey, Doug, I just wanna make sure on what you said earlier, because this year we are actually returning more than our 75% in our framework. Just remember our framework. We did our debt reduction of $500 million. As John mentioned, our framework has the flexibility when oil prices are strong to do more than 75%. That's what we are doing this year. As John mentioned, we'll complete the $310 million in the fourth quarter. Again, we have that flexibility to stay strong. As John said, depending on market conditions, we'll do 75% or more. We'll see.

[Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America]

Thanks so much, guys.

[Operator]

Thank you. One moment for our next question, please. Our next question comes from Stephen Richardson with Evercore. Please go ahead.

[Stephen Richardson, Senior Managing Director at Evercore]

Good morning.

[Greg Hill, COO at Hess Corporation]

Morning.

[Stephen Richardson, Senior Managing Director at Evercore]

Thank goodness for easy to pronounce names. I was wondering if I could ask Greg a couple on exploration. One, you know, it seemed that so you've got a success at Yarrow and Banjo-1, something that wasn't. You know, our recollection was that this was testing sort of the inboard oil play to the southeast. Could you maybe talk about a little bit more to the extent that you're able in terms of those 2 and what was confirmed or what wasn't and what we should take away from that?

[Greg Hill, COO at Hess Corporation]

Yeah, sure. First of all, you know, I would say the inboard oil play has been very successful because we've had 4 discoveries in the area. Recall Barreleye had 230 feet of high quality pay. Seabob had 131 feet of high quality pay. As we announced this morning, Yarrow had 75 feet of high quality pay, and finally, Lukanani had 115 feet of high quality pay. All of those, you know, will help to underpin a future development. Even though Banjo was dry, it had non-commercial quantities of hydrocarbons. It had hydrocarbons that went through it. We've got more wells to drill in that area.

[Greg Hill, COO at Hess Corporation]

If I step back and say 4 successes, 1 non-commercial and more to come, I still feel very optimistic about the inboard play. I also think it's important to know that Banjo was the westernmost prospect that we drilled in that inboard play as well.

[Stephen Richardson, Senior Managing Director at Evercore]

That's helpful. Maybe, Greg, I mean, this whole semantics around the million barrels or the 6 boats or the 10 boats or whatever it may be. Could you maybe, you know, at what point should we be thinking that we get more clarity in terms of the length of plateau versus additional boats? Is this something that we're gonna be, you know, get some additional clarity on the next 12, 24 months? Or is this a longer event as we kind of see how the reservoirs react in production? But it seems to us that that's the.

[Greg Hill, COO at Hess Corporation]

Sure.

[Stephen Richardson, Senior Managing Director at Evercore]

as we think about recovering 11+ billion barrels, those are kind of the 2 variables.

[Greg Hill, COO at Hess Corporation]

Yeah. Steve, I want Greg to answer that, but you have the clarity on what production's gonna be. It's gross a million barrels a day, at least, in 2027. I think that's really important so people don't get confused by other releases. That is the number, and there's upside to that. Now, Greg can talk more about tiebacks and plateaus, but that million barrels a day, very good number that people should use in terms of having clarity and visibility of the production growth trajectory.

[Greg Hill, COO at Hess Corporation]

Okay, great. I think, you know, the plateau rates or lengths, I should say, are gonna vary by vessel. You know, however, you know, given the high resource density and the potential for near field tiebacks, and that's in both the upper campaign and the deeper plays, because remember, the deep play underlies, you know, the shallower upper campaign reservoir. We expect to see these production plateaus maintain for a longer period than what would be typical for other deepwater developments. I'm pretty optimistic about the length of the plateaus. Again, each one will be bespoke based upon the reservoir density, you know, in and around each vessel. Thank you.

[Operator]

Thank you. One moment for our next question, please. Our next question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Good morning, team. First question is around.

[Greg Hill, COO at Hess Corporation]

Morning.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Morning, John. First question is around the Bakken. Really good quarter for you guys here after some weather issues earlier this year. Can you just refresh us on how we should be thinking about the trajectory in the Bakken in 2023 and then as you get into 2024 as well?

[Greg Hill, COO at Hess Corporation]

Sure. You know, we guided 165-170, you know, in the fourth quarter of this year. That really reflects a couple things. One is, you know, most of the wells are gonna be completed at the back end of the quarter. We also looked at our historic kind of weather performance in the fourth quarter, and we increased our contingency a little bit in the fourth quarter to reflect that. If you think about, you know, where we're headed in the Bakken, you know, with the 4 rigs, that's gonna allow us to increase production to about 200,000 barrels a day in 2024.

[Greg Hill, COO at Hess Corporation]

With our, you know, extensive inventory of high return wells, we expect to hold this plateau for nearly a decade and then generate significant free cash flow. During that period of time, you can assume that the oil percentage of the well head is gonna be broadly flat at around that 65%. You can almost, you know, endpoint this year and pretty much straight line to the end of 2024, assuming the end of 2024 would be 200, and that'll give you a reasonable approximation of what the trajectory will be.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

All right. That's good color here. John, if I could ask you to step back and talk about your view on the macro. You always have a good read on the oil markets. You know, just your perspective on where we are in terms of the rebalancing as you go into 2023, and how that feeds into your framework around hedging, given the backwardation in the curve.

[John Hess, CEO at Hess Corporation]

Yeah, I'll give some remarks on, you know, further detail on how we see the oil market, and then John Rielly will talk about our hedging. Look, the impact of high interest rates, strong dollar, inflation, obviously is being felt in the financial markets. You know better than anybody from your perspective, it's already being felt not only in the financial markets and the pullback, but also in certain parts of the economy. I have to say, even though, you know, we've seen a slowing of demand in China and in Europe overall, global oil demand continues to be pretty resilient, and we're not seeing a major impact from inflation and the high dollar in oil demand itself.

[John Hess, CEO at Hess Corporation]

In fact, as we look out to next year, between China reopening its economy and continuing to increase overall global air travel, we see upside to current demand globally of 100 million barrels going up 1 million barrels a day next year. I don't think if there is a pullback in the economy where it does affect oil demand, I don't think it's gonna be anywhere near what it was during the world financial crisis, which was upwards of 2 million barrels a day. You know, I think part of what's going on here, you know, there's been a slow but steady increase in demand recovering from COVID, and we haven't completed that recovery yet.

[John Hess, CEO at Hess Corporation]

That's the major reason oil demand, we think as you go into next year, will go up, at least 1 million barrels a day from the 100 million a day right now. The risk, I think, is to the upside. You know, what's gonna happen with Russia oil supply? What's gonna happen with Russia gas supply? How do we get through the winter? I think, you know, how cold is the winter? That, if anything, could increase that 1 million barrels a day that I just talked about. You know, as you know, there's oil substitution for gas supply industrially, some residential, commercial, both in Europe and Asia, obviously on the electricity side. How much that fuel substitution remains to be seen as well.

[John Hess, CEO at Hess Corporation]

You know, we see the market, if anything, having strengthening tailwinds going into the winter. As such, you know, I'd say there's more upside to the price from where we are now than there is downside. With that, sort of as a backdrop, John, how about our hedging?

[John Rielly, CFO at Hess Corporation]

Sure. With that backdrop, I mean, Neil, you know, what we do is we use put options for our hedging strategy. With all the you know, the variables that John just mentioned, you know, and the time value here, the volatility levels right now, putting on the puts would be too expensive. We do plan to get the similar level of hedge protection that we had this year. Now, we will continue to watch the market. We'll try to get some on in the fourth quarter, but it could be early next year that we get these hedges on. You should expect us to get that similar hedge position on. It'll just be a matter of timing when we do it, and again, just with put options.

[John Hess, CEO at Hess Corporation]

again, to underline what John said, that's to protect the downside and still give our shareholders the benefit of the upside.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Makes a lot of sense. Thank you both.

[Operator]

Thank you. One moment for our next question, please. Our next question comes from the line of Roger Read with Wells Fargo. Please go ahead.

[Roger Read, Senior Energy Analyst at Wells Fargo]

Yeah, good morning. Gonna come back, I guess, a little bit on the CapEx, and I know you're hesitant to get, you know, any more than what you've had. I'm just a little curious, as you look across the various regions you operate onshore U.S., offshore U.S. and Guyana, like how much of when you look out, you can say is fairly well committed or contracted, signed, you know, where there's not a lot of risk of a surprise as we think about 2023 on the CapEx front? You know, the underlying inflation that we're just kind of seeing everywhere.

[Greg Hill, COO at Hess Corporation]

Yeah. On the inflation, you know, like our competitors, you know, we're seeing upward pressure across, you know, both our onshore and offshore businesses and steel prices, labor costs, rig rates. Let's talk about the Bakken first. Regarding the Bakken, now what we've seen this year, the industry is seeing overall inflation of 15%-20% versus 2021. You know, however, as you know, our team's been able to reduce this to 8.5%, and we've done that through lean manufacturing, strategic contracting and technology. And that's enabled us to deliver that D&C cost to $6.3 million per well in 2022. Our net inflation has been about half of what the industry is seeing in the Bakken, if you will.

[Greg Hill, COO at Hess Corporation]

Now, if we looked at 2023, in broad terms, we're anticipating a further 15%-20% inflation in the oil country tubular goods. Even though steel prices are moderating, the mills are still at capacity, and demand is very strong. We're also expecting 15%-20% potentially in drilling rigs. 5%-10% inflation in frac spreads, frac sand, and labor. That kind of gives you an idea. Now, of course, we're working to mitigate some of these further increases, and we'll guide well costs in the Bakken in January 2023 as usual. Recall in Guyana, you know, the first 4 FPSOs are contracted and have limited exposure to inflation.

[Greg Hill, COO at Hess Corporation]

I should add that operator has done an excellent job of offsetting any inflation in oil country tubular goods, et cetera, through the efficiency gains that they've realized in Guyana. Now, as already mentioned, the Wabi FPSO cost is gonna reflect current market conditions as well as scope changes. You know, we'll give an update on Wabi once the project has been approved and sanctioned, but it'll still be world-class, still have world-class breakevens.

[Roger Read, Senior Energy Analyst at Wells Fargo]

Yeah. It's certainly something to watch down there. The only other question I had is related to Guyana. Has there been any update, any change to the thoughts of gas development down there long term? I mean, I know we have the pipeline to the onshore, but anything else as you've had these additional discoveries and as you're thinking about, you know, out to the 2027 period with 6 FPSOs?

[Greg Hill, COO at Hess Corporation]

No. I think, you know, in the short term, it's all about the gas pipeline to shore, Slipstream $1.5 billion off of, you know, Liza and, you know, supply an onshore clean power plant that the government will build. Beyond that, very long term, you know, in terms of LNG or anything like that's way down the road. We are focused on optimizing the development plan to move those oily developments, forward. As John said, we have clear visibility to 6, and the 7 is likely just around the corner. It'll be an oily boat as well.

[Roger Read, Senior Energy Analyst at Wells Fargo]

Great. Thank you.

[Operator]

Thank you. One moment for our next question, please. All right. Our next question comes from the line of Paul Sankey with Sankey Research. Your line is open.

[Paul Sankey, Independent Analyst at Sankey Research]

Morning, everyone. John Hess, while you're on the subject of oil markets, could you give an update and outlook for Libya, please? Thank you.

[John Hess, CEO at Hess Corporation]

Yeah. Paul, thanks for the easy question. Look, Libya is still having political unrest, political divide between the East and the West. You know, there are some encouraging signs that they're gonna start coming together for the leadership of the country, but it would be premature for me to comment further on that. You know, we are still hopeful that we're gonna be able to conclude our sale of our assets there to TotalEnergies and ConocoPhillips, but it needs leadership approval from the government, and that's a work in progress.

[Paul Sankey, Independent Analyst at Sankey Research]

Understood. Another thing which is a little bit inside baseball, Paul, but maybe an opportunity for you to talk about a big theme is the asset retirement obligations that you had in the quarter. Is that a sort of a one and done payment that you're making in the Gulf of Mexico? Is there an outlook there for more of the same, or is that sort of putting an end to it? Could you comment on the overall attractiveness and position in the Gulf of Mexico and your plans there? We don't hear you talking much about it, but obviously we're aware you've got a pretty big position. Thanks.

[John Rielly, CFO at Hess Corporation]

I'll start with the asset retirement obligations, then I'll hand it over to Greg for the Gulf. The asset retirement obligations that we took the charge on this quarter, it was basically for non-producing properties that we just updated our estimates on those wells that are being abandoned. This is really kind of near-term wells that we're going to be working on. That, yes, is more of a one-time. Now, overall, like we've got, you know, a lot of wells that will come to be abandoned, but over the long term. The change in the estimate for all those wells were not that much. What happens from an accounting standpoint is when they're producing, you increase the liability, increase the asset.

[John Rielly, CFO at Hess Corporation]

Again, I would say, you don't have to think about it more as a recurring type thing. This is kind of a one-off for these non-producing properties that we have in the near term.

[Paul Sankey, Independent Analyst at Sankey Research]

Thanks.

[Greg Hill, COO at Hess Corporation]

Paul, let me talk about, you know, kind of where we're headed, you know, in the Gulf. You know, as you kinda intimated, you know, the Gulf of Mexico remains a really important cash engine and platform for growth for us. Our objective is to sustain or grow production there through both tiebacks and hub class exploration opportunities. We've been selectively rebuilding our Gulf of Mexico portfolio, as you know, in the last 6 years, and we've acquired more than 60 new lease blocks and have a really good balance of both types of opportunities. I think a good planning assumption is that we would drill 2 wells per year for the next several years.

[Greg Hill, COO at Hess Corporation]

If we kinda hone in on 2023, we're still finalizing the program, but we're seeing the potential next year for 2 tiebacks and 1 hub class exploration opportunity based upon the success of our Huron well this year. In most of these prospects that I talked about, our partners are Shell and Chevron. We're in with you know a very good partnership in the Gulf.

[Paul Sankey, Independent Analyst at Sankey Research]

Got it. I'll ask a leading question. Has government policy made a difference to the way you've looked at the Gulf of Mexico? I'll leave it there. Thanks.

[Greg Hill, COO at Hess Corporation]

No, it hasn't.

[Paul Sankey, Independent Analyst at Sankey Research]

Thanks.

[Operator]

Thank you. One moment for our next question, please. Our next question. One moment. We're having technical difficulties posting our next question. One moment. One moment, please. As a reminder, if you have a question, please press star then one one on your telephone to get in the queue. Our next question comes from the line of Bob Brackett with Bernstein Research. Your line is open.

[Bob Brackett, Managing Director and Senior Research Analyst at Bernstein Research]

Hey, good morning. Thanks for the color on the Uaru development. You mentioned 250,000 a day. I'd seen third-party reports at 275 a day. It sort of begs the question, given that standard call, how large could you get in terms of what's the capacity limit for an FPSO of that class?

[Greg Hill, COO at Hess Corporation]

Well, thanks, Bob. You know, I think, you know, the opportunity to kind of debottleneck is going to be bespoke. It's gonna be vessel by vessel now. You recall we debottlenecked phase I. It went from 120 to 140. Based on the early production performance of phase II, it looks likely that we will probably have some debottlenecking potential there. You know, as these vessels come on, you know, based upon the early production history, call it the first year or so, that is when you'll decide, you know, where your pinch points are and how much debottlenecking capability there is on each vessel. It's gonna be bespoke, and we'll just have to wait and see what that early production data shows. Yeah.

[Bob Brackett, Managing Director and Senior Research Analyst at Bernstein Research]

In terms of maximum capacity, any guess?

[Greg Hill, COO at Hess Corporation]

Well, I think, you know, 10%-15% is kind of what would be typical. You know, if you look at phase I and maybe potentially at phase II. 275, you know, I don't know. You know, I just don't know. Again, every vessel is going to be different, and I think it'd be premature to throw out numbers like that. Yeah. Bob, obviously, this is all subject to government approval. We're gonna be putting our plan and development in and, you know, assuming something in the range conceptually of 250 a day is probably a good planning assumption. Again, it's subject to government approval.

[Bob Brackett, Managing Director and Senior Research Analyst at Bernstein Research]

Very clear. Follow-up. This has been your biggest year of sort of deeper Santonian exploration, Guyana. Any update on progress and learnings, thoughts about the Santonian?

[Greg Hill, COO at Hess Corporation]

Well, I think, you know, the results speak for themselves. I mean, you know, the deep is very promising. I think, we will continue, as I said in my opening remarks, we will continue to really understand, you know, the deep potential with many of the wells that we're gonna be drilling, you know, in the fourth quarter. You know, Fangtooth Southeast, for example, located 8 miles southeast of Fangtooth is gonna spud. Then, you know that, you know, Fangtooth is a very high quality, very large reservoir system. Putting another well 8 miles southeast of there will tell us a lot. So I am very optimistic about the deep. Yeah. There are a number of other prospects that we had a recent review on.

[Greg Hill, COO at Hess Corporation]

One's called Lancetfish.

[Bob Brackett, Managing Director and Senior Research Analyst at Bernstein Research]

Yes.

[John Hess, CEO at Hess Corporation]

East of Fangtooth. We have Fish 1 and Fish 2 that are, you know, reasonable distance to the west and northwest of Fangtooth. There's a lot of prospectivity to come. As we get more success in finding these deeper horizons, our ability to correlate the seismic, new prospects are lighting up. There's a lot more upside that Greg's talking about that hopefully in the next 6 months we'll be able to give updates on.

[Greg Hill, COO at Hess Corporation]

Yeah. Bob, just to remind you that, you know, the Fish 1 is 62 miles northwest of Liza 1. That gives you know, an idea of the extent of some of these deep reservoir systems, what we see. Then, of course, Lancetfish is tucked close to Liza. It's about 3 miles west of the Liza 3 well, and it's targeting deep sands that underlie that Liza complex.

[Greg Hill, COO at Hess Corporation]

Thanks for that.

[Operator]

Thank you. One moment for our next question, please. All right. Our last question is from the line of Noel Parks with Tuohy Brothers. Your line is open.

[Noel Parks, Managing Director and Energy Research at Tuohy Brothers]

Hi. Good morning.

[Greg Hill, COO at Hess Corporation]

Morning.

[Noel Parks, Managing Director and Energy Research at Tuohy Brothers]

I was wondering at Banjo, if you could just talk a bit about how the results there sort of maybe ripple through your analysis. I'm thinking about maybe the seismic interpretation or if there is anything else you learned about beyond just, you know, the areal extent of the resource there.

[Greg Hill, COO at Hess Corporation]

No, you know, look, again, I think we already talked about the significance of Banjo. I think that, you know, the question is really about the inboard oil play. Recall we've had 4 discoveries, you know, in this area, Barreleye, Seabob, Yarrow, Lukanani, which all had, you know, significant amounts of oil pay. Banjo was the westernmost well, so in that area, it was a bit of an outstep, if you will, from the fairway. We've got a bunch more wells to drill in that area, so I don't think you should read anything negative into the Banjo result at all.

[Noel Parks, Managing Director and Energy Research at Tuohy Brothers]

Okay. Fair enough. I just wanted to turn to the Bakken for a minute, and I just wondering if you had any updated thoughts on or experience with recompletions up there. If I recall, you had done some work going back to some of the oldest vintage wells or done sort of with the original, you know, much lighter completions out there. So, if you haven't doing anything out there, what venture a guess about what the returns might look like for that sort of work?

[Greg Hill, COO at Hess Corporation]

Well, we have been doing a number of refracs, and the results have been very good. And in some cases, the wells, you know, the IP rates that we're seeing are as good as, you know, some of the new wells, and that's not surprising because these were kind of vintage 001 completions. We have several hundred wells that we could refrac, and we will fit them in our program, you know, you know, as we go forward. One of the advantages of the refrac program is it allows you more continuity with the frac crew. We've been sort of dovetailing some refracs into our program just to maintain continuity of a second frac crew. You'll see more of that activity next year. So far, so good.

[Greg Hill, COO at Hess Corporation]

The results are good, and the returns are very good because, you know, all the infrastructure is already there, the well's there, so.

[Noel Parks, Managing Director and Energy Research at Tuohy Brothers]

Okay. Thanks a lot.

[Greg Hill, COO at Hess Corporation]

Yep.

[Operator]

Thank you. One moment for our next question, please. Our next question comes from the line of Ryan Todd with Piper Sandler. Please go ahead. Oh, and Mr. Todd removed himself. Thank you very much. This concludes today's conference. Thank you for your participation, and you may now disconnect.

Participants

Executives

• Greg Hill, COO
• Jay Wilson, VP of Investor Relations
• John Hess, CEO
• John Rielly, CFO

Analysts

• Arun Jayaram, Equity Research Analyst at JPMorgan Securities
• Bob Brackett, Managing Director and Senior Research Analyst at Bernstein Research
• Doug Leggate, Managing Director and Head of US Oil and Gas at Bank of America
• Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs
• Noel Parks, Managing Director and Energy Research at Tuohy Brothers
• Paul Sankey, Independent Analyst at Sankey Research
• Roger Read, Senior Energy Analyst at Wells Fargo
• Stephen Richardson, Senior Managing Director at Evercore