Oil and gas producer Hess Corp., a major operator in the North Dakota oil patch, plans to reduce spending in the region by over 18 percent this year — in part due to a steep drop in oil prices.
Hess announced this week that it plans to spend $1.8 billion in the Bakken, down from $2.2 billion in 2014. Hess President and Chief Operating Officer Greg Hill said the company will also have fewer drilling rigs and will complete fewer operating wells.
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John Roper, a spokesman for Hess, said while the declining price of oil has played a role in the company's decision, part of the changes in the Bakken are due to new technology. Roper said due to efficiencies and improvements in drilling, Hess expects to drill almost as many wells this year while running only half the drilling rigs.
Hill said Hess feels confident its leases in the Bakken can be productive and profitable in 2015.
"Hess has some of the best acreage in the Bakken, and we will continue to drill in the core of the play which offers the most attractive returns," he said. "As oil prices recover we will increase activity and production accordingly."
Several months ago, crude oil was more than $100 a barrel. It's now trading below $50 a barrel.
North Dakota's rig count was 154 as of Tuesday, down 30 from mid-December, the Bismarck Tribune reported. The price of Bakken crude was posted at $28.75 a barrel.
Hess reported a fourth-quarter loss of $8 million on Wednesday, after reporting a profit in the same period a year earlier.