Hess said on Friday that it will add rigs in the Bakken play and restart drilling at the Vallhall Field as part of its 2017 exploration and production plan.
The New York based company has set its 2017 E&P capital and exploratory budget at $2.25 billion, up from its 2016 actual spend of $1.9 billion.
Hess has allocated $700 million of the budget for unconventional shale resources, $375 million for production, $825 million for developments and $350 million for exploration and appraisal activities.
The unconventional budget will be used to boost the company’s unconventional rig count up from two rigs to six rigs by the end of the year and to bring about 75 new Bakken wells online.
Unconventional budget funds will also be used for non-operated wells and pad construction in preparation for 2018 drilling.
The company’s production budget is primarily slated for production activities in the deepwater Gulf of Mexico, including the drilling and completion of a production well at the Penn State Field.
Hess holds a 50 percent stake and is the operator of the Penn State Field.
The company’s production spend will also be used for operations at the Valhall Field in Norway where drilling will restart in late first quarter 2017.
Hess holds a 64 percent stake in the Aker BP operated Valhall.
Hess said that $425 million of its development budget will be used to drill two wells and complete three wells, install the tension leg platform and progress development of the Stampede Field in the deepwater Gulf of Mexico to achieve first oil in 2018.
Hess holds a 25 percent stake and operates the Stampede Field.
The company plans to spend $275 million of its development budget to complete initial full field development of North Malay Basin in Malaysia in order to achieve first production in the third quarter of 2017.
Hess holds a 50 percent stake in and operates the North Malay Basin.
The company also plans to spend $125 million for development activities at the Liza Field in Guyana where its holds a 30 percent stake.
Hess said its $350 million exploration spend will be used to drill wells at the Stabroek Block offshore Guyana that will include appraising the Liza Field, the recent Payara discovery and new exploration prospects.
Additional funds are included in the spend for seismic acquisition and processing and for license acquisitions, the company added.
Hess has forecast its net 2017 production to average between 300,000 and 310,000 barrels of oil equivalent per day (boepd), excluding Libya.
Production is expected to rise between 8 percent and 12 percent from the beginning of 2017 to the end of the year thanks to additional rigs in the Bakken, the restart of drilling at Valhall and the start-up of North Malay Basin in the third quarter.
Bakken net production in 2017 is forecast to average between 95,000 and 105,000 boepd.
Hess also said its fourth quarter results will include a noncash charge of $3.8 billion to “establish valuation allowances against net deferred tax assets as of December 31, 2016, as required under accounting standards following a three-year cumulative loss.”
The company said its decision to defer further development of the offshore Australia Equus natural gas fields on blocks WA-390-P and WA-474-P during the fourth quarter will result in an after-tax charge of $700 million.
Hess holds a 100 percent stake in the WA-390-P and WA-474-P blocks that are located offshore in the North West Shelf of Australia.
Hess added that the charge will fully impair the carrying value of interests in Equus.
The company added that “capital will be allocated to projects that generate higher returns for shareholders, including the Bakken and Guyana.”