Hess Corporation announced it has sanctioned the first phase of development of the Liza Field, one of the industry’s largest oil discoveries of the past decade, located on the Stabroek Block offshore Guyana. In addition, the company announced positive results from the Liza-4 well, which encountered more than 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoirs and will underpin a potential Liza Phase 2 development. Gross discovered recoverable resources for the Stabroek Block are now estimated to be 2.0 billion to 2.5 billion barrels of oil equivalent, including Liza and other successful exploration wells on Liza Deep, Payara and Snoek.

The first phase of a planned multiphase development of the Liza Field is expected to have a gross capital cost of approximately $3.2 billion for drilling and subsea infrastructure and will develop approximately 450 million barrels of oil, with first oil expected by 2020. The first phase of development will utilize a leased floating production, storage and offloading vessel (FPSO) that will have the capacity to process up to 120,000 barrels of oil per day from four subsea drill centers consisting of 17 wells, including eight producers, six water injectors and three gas injectors. Hess’ net share of development costs is forecast to be approximately $955 million, of which $110 million is already included in Hess’ 2017 capital and exploratory budget. Of the remaining net development costs, approximately $250 million is expected in 2018 and approximately $330 million in 2019, with the balance expected between 2020 and 2021.

“Development of the world class Liza resource with a low cost, phased approach accelerates first production and positions us to deliver significant value to our shareholders,” CEO John Hess said. “We look forward to working with our partners and with the Government of Guyana on this important project.”

In 2017 and 2018, Hess and its partners plan to continue exploration and appraisal of the 6.6 million acre Stabroek block. There are numerous prospects across multiple play types on the block, representing additional multibillion barrel unrisked exploration potential. Drilling of the Payara-2 well, which will also test a deeper prospect underlying the Payara oil discovery, is expected to commence in late June following completion of a drillstem test at Liza-4.

Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Limited holds a 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds a 25 percent interest.

About Hess Corporation

Hess Corporation (NYSE:HES) is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas.