Hess Adds Value In Bakken With Plug-and-Perf Completions

Executives for Hess Corp. (NYSE: HES) say its shift to a new completion design in the Bakken is increasing NPV by about $1 billion at $60 per barrel WTI, with room to grow.

The New York-based company is embracing plug-and-perf completions as it moves away from sliding sleeve in the Bakken, where the lean manufacturing process has helped bring down costs by 60%.

“Those new plug and perf completions are generating about a 15%-20% improvement in average IP 180 performance over sliding sleeve,” Greg Hill, president and COO for Hess, said during the company’s recent analysts day. “This new design now is yielding well IRRs in excess of 50% over the next 15 years or 60 rig years of inventory…and that is highly competitive with the Permian.”

Hess anticipates the new completions design will help grow its Bakken production to about 200,000 barrels of oil equivalent per day (boe/d) by 2021, higher than the previously guided 175,000 boe/d. The shale acreage, considered one of the company’s growth engines, is expected to generate more than $1 billion in annual free cash flow starting in 2021.