NEW YORK Oct 28, 2015 (Thomson StreetEvents) -- Edited Transcript of Hess Corp earnings conference call or presentation Wednesday, October 28, 2015 at 2:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Jay Wilson Hess Corporation - VP, IR * John Hess Hess Corporation - CEO * Greg Hill Hess Corporation - COO and President of Exploration & Production * John Rielly Hess Corporation - SVP & CFO ================================================================================ Conference Call Participants ================================================================================ * Edward Westlake Credit Suisse - Analyst * Doug Leggate BofA Merrill Lynch - Analyst * Guy Baber Simmons & Company International - Analyst * Ryan Todd Deutsche Bank - Analyst * Paul Cheng Barclays Capital - Analyst * Paul Sankey Wolfe Research - Analyst * Brian Singer Goldman Sachs - Analyst * David Heikkinen Heikkinen Energy Advisors - Analyst * John Herrlin Societe Generale - Analyst * Pavel Molchanov Raymond James & Associates, Inc. - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day ladies and gentlemen and welcome to the third-quarter 2015 Hess Corporation conference call. (Operator Instructions) 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, Hess Corporation - VP, IR [2] -------------------------------------------------------------------------------- Thank you Mallory. 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' 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. With me today are John Hess, Chief Executive Officer; Greg Hill, Chief Operating Officer; and John Rielly, Chief Financial Officer. I will now turn the call over to John Hess. -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [3] -------------------------------------------------------------------------------- Thank you, Jay. Welcome to our third-quarter conference call. I will review progress in executing our strategy in the current low oil price environment and provide some highlights from the quarter. Greg Hill will discuss our operating performance and John Rielly will then review our financial results. The three key principles that guide us are to preserve the strength of our balance sheet, preserve our capabilities, and preserve our growth options. We have moved aggressively over the course of 2015 to reduce our costs, capturing about $600 million in reductions so far, split evenly between capital expenditures and cash operating costs. For 2016 we intend to significantly reduce our level of spending in order to preserve our balance sheet and liquidity. While our 2016 budgeting process will not be finalized until the end of the year, we currently expect next year's E&P capital and exploratory expenditures to be in the range of $2.9 billion to $3.1 billion compared to $4.1 billion in 2015, excluding expenditures associated with a 50% interest in our Bakken Midstream joint venture. This reduction of more than $1 billion represents approximately a 27% decrease from 2015. In the Bakken we are currently planning to operate four rigs in 2016. We dropped one rig in the third quarter and plan to operate seven rigs for the balance of this year. We also plan to curtail investment in our offshore assets in 2016. We intend to defer further development drilling in the Deepwater Gulf of Mexico, the North Sea and in Equatorial Guinea. In addition we will complete a major booster compression project at the JDA in the first half of 2016 which will reduce our spend there next year. In terms of our financial position, we have one of the strongest balance sheets and liquidity positions within our peer group. At September 30, our net debt to capitalization ratio excluding the Bakken Midstream joint venture was 13% and we had nearly $8 billion of available liquidity including $3 billion of cash. In 2016 we expect to fund our base business expenditures and dividends through cash flow from operations and use cash on the balance sheet to fund our growth investments which include two development projects and exploration and appraisal activity. While it is prudent to plan for continued low oil prices in 2016 we also believe that Hess is well positioned to benefit when oil prices recover. We are more leveraged to liquids than our peers with industry-leading cash margins. Also our advantaged tax positions in the United States and Norway will accelerate cash flow growth as oil prices improve. Our portfolio has significant growth opportunities in the near term from the Bakken and Utica, in the intermediate term from Newfield startups at North Malay Basin in 2017 and Stampede in the Deepwater Gulf of Mexico in 2018 and in the longer term recent material exploration discoveries at Liza in Guyana and Sicily in the Deepwater Gulf of Mexico provide significant upside potential for our shareholders. Both of these discoveries are planned to be appraised in early 2016. Now turning to our financial results, in the third quarter of 2015, we posted a net loss of $279 million. On an adjusted basis the net loss was $291 million, or $1.03 per share compared to net income of $1.24 per share in the year-ago quarter. Compared to the third quarter of 2014, our financial results were primarily impacted by lower crude oil and natural gas selling prices which more than offset the impact of higher crude oil and natural gas sales volumes and lower cash cost and exploration expense. During the third quarter we again delivered strong operating performance. Net production averaged 380,000 barrels of oil equivalent per day, an increase of 21% from the year-ago quarter excluding Libya. This improvement was driven by higher production from the Bakken and Utica shale plays and the Tubular Bells field in the Deepwater Gulf of Mexico. In light of our continued strong performance, we are increasing our forecast for 2015 full-year production to a range of 370,000 to 375,000 barrels of oil equivalent per day, up from our previous guidance of 360,000 to 370,000 barrels of oil equivalent per day. This increase represents a 16% to 18% improvement over 2014 excluding Libya. In the fourth quarter of 2015, we forecast production to average approximately 360,000 barrels of oil equivalent per day. Based on 2016 capital and exploratory expenditures in the range of $2.9 billion to $3.1 billion our preliminary forecast is for 2016 production to be in the range of 330,000 to 350,000 barrels of oil equivalent per day. Turning to the Bakken production averaged 113,000 barrels of oil equivalent per day in the third quarter, above our guidance range. For the full-year 2015, we now expect production to average approximately 110,000 barrels of oil equivalent per day compared to our previous guidance of a range of 105,000 to 110,000 barrels of oil equivalent per day. In the fourth quarter of 2015 we forecast production to average approximately 100,000 to 105,000 barrels of oil equivalent per day. Based on our current plans for a four rig program next year our preliminary forecast for Bakken production is to average in the range of 95,000 to 105,000 barrels of oil equivalent per day. In summary we delivered strong operating performance while maintaining a robust financial and liquidity position with further significant spending reductions underway. We are well positioned in the current low oil price environment and are taking a disciplined approach to preserve our financial strength, competitively advantaged capabilities and long-term growth options. I will now turn the call over to Greg. -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [4] -------------------------------------------------------------------------------- Thanks, John. I'd like to provide an operational update and review overall progress and executing strategy. We believe strongly that is prudent to plan for continued low oil prices next year and prioritize preserving the strength of our balance sheet. In this light we are planning further significant reductions in our capital and exploratory expenditures in 2016. In the Bakken we plan to operate a four rig program next year compared to 8.5 rigs in 2015 and 17 rigs in 2014. In the Deepwater Gulf of Mexico we plan to defer further development drilling in the Tubular Bells and Llano fields. In the North Sea we will complete the current drilling program at the Hess operated South Arne field in Denmark in the first quarter of 2016 and will then release the rig and defer further drilling. In Equatorial Guinea where demobilization of the rig was completed during the third quarter of this year we will defer drilling in 2016 to allow time for processing and interpretation of new 4D seismic. At the Valhall field in Norway the operator plans to leave the platform rig stacked over the majority of 2016. And at the JDA in the Gulf of Thailand we will complete a major booster compression project in the first half of 2016 after which capital for the rest of the year will be significantly reduced. As John mentioned when oil prices recover we are competitively well positioned and have both the capabilities and the opportunities to drive future profitable growth. Now turning to the third quarter of 2015, we delivered strong operating performance across our portfolio, further improved our onshore drilling costs and progressed our offshore developments and exploration activities. Starting with production, in the third quarter we averaged 380,000 barrels of oil equivalent per day, exceeding our previous guidance of 355,000 to 365,000 barrels of oil equivalent per day for the quarter, reflecting strong performance from our producing assets. As a result we have raised our full-year 2015 production guidance to between 370,000 and 375,000 barrels of oil equivalent per day excluding Libya. On this same basis we forecast production in the fourth quarter to average approximately 360,000 barrels of oil equivalent per date. Our fourth-quarter forecast reflects the impact of lower activity levels across our portfolio. Turning to unconventionals, in the third quarter production from the Bakken averaged 113,000 barrels of oil equivalent per day compared to 119,000 barrels of oil equivalent per day in the second quarter and 86,000 barrels of oil equivalent per day in the year-ago quarter. High production availability and strong well performance allowed us to exceed our previous guidance of 105,000 to 110,000 barrels of oil equivalent per day for the quarter. In the third quarter we operated an average of seven rigs in the Bakken and brought 48 wells online. In 2015 we expect to drill 183 wells, complete 212 and bring 219 online with an average of 8.5 rigs for the year. This compares to last year when we drilled 261 wells, completed 230 and brought 238 wells online with an average of 17 rigs. For the drilling rigs alone this represents a 40% efficiency improvement year on year as a result of the application of our distinctive lean manufacturing capability. In the fourth quarter we expect Bakken production to continue to move modestly lower and average between 100,000 and 105,000 barrels of oil equivalent per day, reflecting fewer new wells being brought online. For the full-year 2015 we expect Bakken production to average approximately 110,000 barrels of oil equivalent per day which is at the upper end of the guidance range announced on our second-quarter call. Through lean manufacturing we continue to drive Bakken drilling and completion costs lower. In the third quarter our D&C costs averaged $5.3 million per well versus $5.6 million in the second quarter and $7.2 million in the year-ago quarter. With these low costs and by drilling some of the highest productivity wells in the play we continue to generate some of the highest returns in the Bakken. Despite moving to four rigs we expect to hold production in 2016 relatively flat with fourth-quarter 2015 guidance through a combination of efficiency gains including lower spud-to-spud days, higher well and facility availability and by capturing more NGLs and natural gas at the gas plant. Our preliminary 2016 forecast is to bring approximately 100 new wells online with production averaging between 95,000 and 105,000 barrels of oil equivalent per day. As a reminder substantially all of our Bakken acreage is held by production and assuming a four rig program at current strip prices and well costs we retain a greater than 10-year inventory of drilling locations that can generate after-tax returns of 15% or higher. In total we have more than 3,000 future drilling locations in the Bakken. And as prices recover we will increase our rig count and activity level as appropriate. Moving to the Utica, in the third quarter the joint venture drilled five wells, completed five and brought 11 on production. Net production for the third quarter averaged 28,000 barrels of oil equivalent per day compared to 11,000 barrels of oil equivalent per day in the year-ago quarter and 22,000 barrels of oil equivalent per day in the second quarter of 2015. For the full-year 2015 we expect Utica production to be at the upper end of our guidance range of 20,000 to 25,000 barrels of oil equivalent per day. Turning to offshore at the Tubular Bells field in the Gulf of Mexico net production averaged 19,000 barrels of oil equivalent per day in the third quarter. During the quarter we experienced a mechanical issue related to a subsurface safety valve that is stuck in the closed position as well as wellbore skin effects at two producing wells. While these issues are not unusual in the Deepwater Gulf of Mexico it will require subsurface well intervention work in the coming months. As a result we have now lowered our full-year 2015 forecast to approximately 20,000 net barrels of oil equivalent per day. However, we expect production to be higher in 2016 as a result of this remediation work. At the Stampede development project in the Gulf of Mexico in which Hess holds a 25% working interest and is operator, fabrication work continues on both the TLP hull and topside. Drilling is expected to commence in the first quarter of 2016 with first oil targeted for 2018. At North Malay Basin in the Gulf of Thailand which Hess has a 50% working interest in as operator, third-quarter net production averaged 39 million cubic feet per day through the early production system and is expected to remain at around 40 million cubic feet per day through 2016. In the third quarter we progressed fabrication as a central processing platform which is part of the full field development project. The project is on schedule to be completed in 2017 and is expected to increase net production to 165 million cubic feet per day. In Norway at the BP operated Valhall field in which Hess has a 64% interest, net production average 35,000 barrels of oil equivalent per day in the third quarter. Planned maintenance activities have been successfully completed and we continue to expect full-year 2015 net production to be in the range of 30,000 to 35,000 barrels of oil equivalent per day. Moving to exploration, on the Stabroek Block Offshore Guyana where Hess holds a 30% working interest we believe Liza, which logged 295 feet of high quality oil bearing reservoir, is a significant oil discovery. The operator, Esso Exploration and Production Guyana Limited, plans to drill an appraisal well in the first quarter of 2016 and is currently completing preparatory technical work and developing drilling plans. We are encouraged by the potential of the Stabroek Block which is approximately the size of 1,150 Gulf of Mexico blocks. Over 50% of a new 17,000 square kilometers 3D seismic shoot has now been completed. And we're evaluating both potential development options for Liza as well as the additional resource potential on the block. In the Gulf of Mexico we continue to evaluate the results in the Chevron operated Sicily discovery in which Hess holds a 25% working interest. An appraisal well to further evaluate the discovery is planned to spud later this year. In closing I'm very pleased with our team who once again achieved a strong operational performance in the current low oil price environment amid significant changes in activity. I will now turn the call over to John Rielly. -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [5] -------------------------------------------------------------------------------- Thanks, Greg. In my remarks today I will compare results from the third quarter of 2015 to the second quarter of 2015. Our adjusted net loss which excludes items affecting comparability of earnings between periods was $291 million in the third quarter of 2015 compared to $147 million in the second-quarter 2015. On a GAAP basis, the corporation incurred a net loss of $279 million in the third quarter of 2015 compared with a net loss of $567 million in the second quarter of 2015. Turning to E&P, on an adjusted basis E&P incurred losses of $221 million in the third quarter of 2015 compared to a loss of $96 million in the second quarter of 2015. The changes in the after-tax components of adjusted results for E&P between the third quarter of 2015 and the second quarter of 2015 were as follows: lower realized selling prices reduced results by $143 million; lower sales volumes reduced results by $33 million; lower cash operating cost improved results by $15 million; lower exploration expenses improved results by $9 million; lower DD&A expense improved results by $9 million; all other items net to an improvement in results of $18 million for an overall reduction in third-quarter adjusted results of $125 million. In the third quarter our E&P operations were overlifted compared with production by approximately 100,000 barrels which had no significant impact on our financial results. The E&P effective income tax rate excluding items affecting comparability was a benefit of 47% for the third quarter of 2015. This effective rate was favorable to the top end of our guidance range by 2% and primarily resulted from the mix of income generated by operations during the quarter. The E&P effective tax rate in the second quarter of 2015 was a benefit of 56%. Turning to Midstream, on July 1 we formed the Bakken Midstream joint venture with Global Infrastructure Partners by selling a 50% interest that generated after-tax proceeds of approximately $3 billion including the corporation's share of debt proceeds issued by the joint venture at formation. Following the completion of this sale the corporation will fully consolidate the operating results, assets and liabilities of the Bakken Midstream segment in its consolidated financial statements with our partner's share being reflected as a non-controlling interest. The Bakken Midstream segment had net income of $16 million in the third quarter of 2015 compared with $32 million in the second quarter of 2015, primarily reflecting the impact of the 50% non-controlling interest. Bakken Midstream EBITDA excluding non-controlling interest amounted to $79 million in the third quarter of 2015 compared to $74 million in the previous quarter. Turning to corporate and interest, after-tax corporate and interest expenses excluding items affecting comparability or $86 million in the third quarter of 2015 compared to $83 million in the second quarter of 2015. Turning to cash flow, net cash provided by operating activities in the third quarter including a decrease of $207 million from changes in working capital was $282 million. Additions to property, plant and equipment were $963 million. Proceeds from dispositions amounted to $2.667 billion. Borrowings were $600 million. Distribution of loan proceeds to our joint venture partner were $300 million. Repayments of debt were $17 million. Common stock dividends paid were $71 million. Common stock acquired and retired amounted to $64 million. All other items amounted to a decrease in cash of $52 million, resulting in a net increase in cash and cash equivalents in the third quarter of $2.082 billion. Turning to our financial position, excluding amounts held in our Bakken Midstream joint venture we had approximately $3 billion of cash and cash equivalents at September 30, 2015 compared to $1 billion at June 30, 2015. Total debt excluding Bakken Midstream was $6 million at September 30, 2015 and our debt to capitalization ratio was 22.7%. Now let me update you on changes to our 2015 guidance. We now project cash costs for E&P operations to be in a range of $16 to $17 per barrel of oil equivalent in the fourth quarter and $15.50 to $16 per barrel for the full year which is down from previous full-year guidance of $16.50 to $17.50 per barrel. DD&A per barrel for the fourth quarter of 2015 is forecast to be $29 to $30 per barrel and $28.50 to $29 per barrel for the full year of 2015 versus previous guidance of $28.50 to $29.50 per barrel. This results in updated projected total E&P unit cost of $45 to $47 per barrel in the fourth quarter and $44 to $45 per barrel for the full year of 2015. The Bakken Midstream tariff expense is expected to be $3.80 to $3.90 per barrel of oil equivalent for the fourth quarter of 2015 and $3.35 to $3.45 per barrel of oil equivalent for the full year of 2015. Exploration expenses excluding dry hole costs and items affecting comparability are expected to be in the range of $115 million to $125 million in the fourth quarter and $340 million to $350 million for the full year which is down from previous full-year guidance of $380 million to $400 million. Turning to Midstream for the fourth quarter of 2015 we anticipate net income attributable to Hess from the Bakken Midstream segment which reflects our 50% ownership will be in the range of $15 million to $20 million. This concludes my remarks. We will be happy to answer any questions. I will now turn the call over to the operator. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Edward Westlake, Credit Suisse. -------------------------------------------------------------------------------- Edward Westlake, Credit Suisse - Analyst [2] -------------------------------------------------------------------------------- Yes, first question really around the cash cycle. I like what you're doing with the capital discipline. Obviously you've got Stampede and North Malay that you have to complete. But as you look to the other side of it when you get to 2017 where do you see cash neutrality for where cash flow covering CapEx and dividend heads out given cost deflation and activity choices? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [3] -------------------------------------------------------------------------------- Thanks, Ed. So as we look at it and first of all let me just discuss I guess 2016, our budget has not been finalized yet. So as you look at 2016 and I think it's exactly as you said we do expect to cover our base business expenditures and dividends through our cash flow from operations and even at this low commodity price environment. Then we will use the cash on the balance sheet as needed to fund our growth projects in 2016 which include North Malay Basin and Stampede and our exploration and appraisal activities which Greg mentioned. So then as you move on to 2017, North Malay Basin comes online, so North Malay Basin becomes a cash flow generator and increases our production in 2017. And then Stampede comes on in 2018, becomes a cash flow generator in 2018. So as we look at this and I think in going through the cycle we're just balancing everything that we've talked about, preserving that financial strength, keeping these operating capabilities and preserving these growth options so that as we move through 2017 and 2018 were in a good position to begin to start generating cash flow at that point in time. -------------------------------------------------------------------------------- Edward Westlake, Credit Suisse - Analyst [4] -------------------------------------------------------------------------------- And then one of the exciting areas obviously is Liza. You've got to do appraisal. I don't know how many prospects you've actually managed to map on the block at this stage but maybe talk a little bit about how aggressive you're going to get after the exploration phase and then maybe even early production on the field. -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [5] -------------------------------------------------------------------------------- Yes, so I guess a little context first. Liza is a very significant discovery, again it's 295 feet of very high quality sandstone. And importantly the well also proved that there's a working petroleum system on this very large block which is about 1,150 Gulf of Mexico blocks. Now, Ed, we're about 50% complete with a seismic shoot that covers over 70% of that block, it's about a 17,000 square kilometer shoot. So we're about half done. So the next step obviously is complete that seismic. We're also planning appraisal and exploration drilling next year with the operator. We haven't finalized all that yet, so I can't really be specific. But there's two objectives, appraise Liza and then get started on other exploration prospects on the block. There's numerous look-alikes to Liza for example. And then the third thing we're going to do is we're starting to evaluate potential Liza development options, so how would we develop this significant discovery called Liza. So those are kind of the three things that are going on. -------------------------------------------------------------------------------- Edward Westlake, Credit Suisse - Analyst [6] -------------------------------------------------------------------------------- Thanks very much. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- Doug Leggate, Bank of America Merrill Lynch. -------------------------------------------------------------------------------- Doug Leggate, BofA Merrill Lynch - Analyst [8] -------------------------------------------------------------------------------- Thank you, good wanting everybody. I've got a couple of questions on the capital budget also. John, how much of this $3 billion midpoint guidance is what you'd characterize as nonproducing capital exploration in those large projects at this point? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [9] -------------------------------------------------------------------------------- So first, Doug, as you know just in light of this low oil price environment we wanted to get this preliminary 2016 guidance out on our capital and exploratory program. It is difficult at this point because we haven't completed our budget process to be really specific on our numbers just in general across our portfolio. And we will do that in January. At a high level, though, we're going to be continuing to spend on North Malay Basin and Stampede and you can think about it in the general same area as it was in 2015 but we will provide specifics on that in 2016. Then exploration will have to provide as Greg said there's still work to do on Guyana. We'll provide more information on that towards January of 2016. But I guess if you put it all together it shouldn't be that much different than the growth capital that we were spending this year. -------------------------------------------------------------------------------- Doug Leggate, BofA Merrill Lynch - Analyst [10] -------------------------------------------------------------------------------- So just to be clear, North Malay and Stampede got about $900 million this year and exploration I guess is about 400 million to $500 million. So is it reasonable to think about it, is it roughly about half your spending next year is not contributing to production? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [11] -------------------------------------------------------------------------------- Yes, that is -- again so the way I would call it, Doug, it's not contributing to production next year but obviously we're building this portfolio and we're one, adding resources to the portfolio with North Malay Basin and Stampede which will become cash flow generators in 2017 and 2018 and then as Greg had mentioned we're excited about the potential of adding future resources for Guyana. So we've got that long-term resources being added to our portfolio. -------------------------------------------------------------------------------- Doug Leggate, BofA Merrill Lynch - Analyst [12] -------------------------------------------------------------------------------- Thank you. So I guess swinging to the Bakken, what I'm really trying to understand is what four rigs means for the Bakken. So I guess I'm not quite sure how to ask this question. If four rigs stabilize the production on an exit-to-exit basis once you get to the end of 2016, and if I'm thinking about this right when you get done with those major capital projects leaving aside what happens in Guyana does that nonproductive capital if you like then swing back to what are still probably some of the highest return assets in your portfolio? In other words, do you go back to a 14, 15 rig program in the Bakken towards the end of the decade as that capital frees up, is that how we should think about it? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [13] -------------------------------------------------------------------------------- Yes, so first of all Doug what happens to the Bakken as we kind of said in our opening remarks with a four rig program in 2016 we expect the Bakken to stay roughly flat with Q4 2015. So that would add -- we've guided 95,000 to 105,000 barrels a day for 2016. Now the obvious question is well how can we hold production flat with four rigs? And it is really three ways, increased drilling efficiencies and higher availability on existing production because there's less Simops going on and then increased gas and NGL capture in the plant. Now if you project out further and ask how long could we hold production flat in a four rig case we could do that for several years. So we could hold the Bakken at about 100,000 barrels a day for several years just for the four rig program. And obviously as cash flow becomes free, as we swing off these growth projects, where we diverge that capital will be a function of return obviously. But clearly the Bakken is one of the best projects we have in our portfolio because it will be very high in the queue for a future call on capital. -------------------------------------------------------------------------------- Doug Leggate, BofA Merrill Lynch - Analyst [14] -------------------------------------------------------------------------------- Thanks. I last quick one, Greg, if I may there's been some talk of Exxon moving to an early production system in Liza. Can you offer any comments on scale and timing? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [15] -------------------------------------------------------------------------------- Can't really, Doug. The one thing I will say is that we're in preliminary studies to evaluate what might be development options for Liza B and there's a variety of possibilities there. -------------------------------------------------------------------------------- Doug Leggate, BofA Merrill Lynch - Analyst [16] -------------------------------------------------------------------------------- Great, thanks a lot everybody. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- Guy Baber, Simmons. -------------------------------------------------------------------------------- Guy Baber, Simmons & Company International - Analyst [18] -------------------------------------------------------------------------------- Good morning everybody and thanks for providing the initial 2016 guidance for us. We appreciate it. First one, just I apologize if I missed this but what commodity price framework are you assuming in the $3 billion preliminary capital guidance? Would that be something close to the strip? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [19] -------------------------------------------------------------------------------- Yes, yes, we're looking at current prices. Right. -------------------------------------------------------------------------------- Guy Baber, Simmons & Company International - Analyst [20] -------------------------------------------------------------------------------- Okay great. And then you mentioned curtailing the offshore spend, deferring further development drilling in the Gulf of Mexico, North Sea, e.g. Can you just discuss that thought process? We typically would think of infill wells as some of the higher return opportunities for you at a Tubular Bells for example where you've already invested some of the infrastructure. So just want to understatement how you're thinking about that, how you came to that decision. -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [21] -------------------------------------------------------------------------------- Yes, I think again you have to go back to the opening remarks of both John and I' and John Rielly. Given the continued low oil prices next year, we have said we're going to prioritize preserving the strength of our balance sheet above all else. So what that means is we're going to flex our investment down in those areas where we can. And we have a lot of flexibility offshore, we have a lot of flexibility onshore, so we're actually bringing the whole portfolio down in order to keep our balance sheet strong. -------------------------------------------------------------------------------- Guy Baber, Simmons & Company International - Analyst [22] -------------------------------------------------------------------------------- Okay great. Then I had a follow-up just on the thought process when it comes to exploration and the strategic importance in a commodity environment like this. But obviously you all have had and participated in some significant discoveries. But just wanted to talk through strategically how you see exploration at this point in time, what type of flexibility you might have in the budget? And also how you think about the potential of between seeing discoveries such as with Exxon in Guyana and Sicily in the Gulf of Mexico through to ultimate production versus the alternate possibility of attempting to perhaps monetize that resource early in the lifecycle to accelerate some cash flow and value recognition? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [23] -------------------------------------------------------------------------------- Yes well I think I will take your last question first. The first order of business is understand what we have there. So particularly in Guyana we've got a lot of work to do to understand the full potential of the block. So way too early to talk about monetization options or anything like that. But how do we think about exploration right now? Well first of all we believe conventional exploration is still the best way to add long-term value to grow the business with attractive returns, provided you can do it successfully obviously. I think importantly right now it can be executed in a much lower cost in the current price environment. So indeed Guyana is a case in point where we were able to access that block at a relatively low entry cost and are now executing this work program at historically low cost on the cost curve. So it's a good time to be doing this kind of work. And obviously as John and I both said in our opening remarks we're really encouraged by the Liza discovery. It's not only a great well in itself but it's also proven a working petroleum system on a very large block with lots of prospectivity. -------------------------------------------------------------------------------- Guy Baber, Simmons & Company International - Analyst [24] -------------------------------------------------------------------------------- Okay great. Thanks for the comments and again for all the disclosure. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- Ryan Todd, Deutsche Bank. -------------------------------------------------------------------------------- Ryan Todd, Deutsche Bank - Analyst [26] -------------------------------------------------------------------------------- Great, thanks and good morning. Maybe if I could try a couple more, maybe a follow-up on an earlier question, can you talk about maybe put a few more numbers around the type of swing in cash flow that you'd see in 2017 from the startup of North Malay in terms of how much capital rolls off versus what would the potential cash flow generation be at the current strip? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [27] -------------------------------------------------------------------------------- Sure. So I mean this is just general guidance there. We're spending in North Malay Basin like this year between $500 million and $600 million. We haven't been specific but let's just say it's carrying that type of level into 2016. Then what happens in 2017 instead of spending $500 million to $600 million and having that negative cash flow, it will actually turn cash flow positive in there. So you're at a minimum getting a $500 million and $600 million, now you're generating free cash flow. So you're potentially at $700 million, $800 million swing in cash flow as it relates just to that North Malay Basin asset. Then Stampede does continue your spending in 2016 and 2017 on the development. And then we were spending approximately $300 million this year but as you move it will be somewhere $300 million to $400 million as we go forward, you have that negative cash flow turning into positive cash flow in 2018. So on top of North Malay Basin at that point in time you're swinging $400 million-ish at a minimum to $500 million to $600 million of cash flow at that point in time. -------------------------------------------------------------------------------- Ryan Todd, Deutsche Bank - Analyst [28] -------------------------------------------------------------------------------- Great. Thanks. That's helpful. Then maybe one more in terms of portfolio construction. Should we -- it's been a seller's market I think we could probably say recently out there in the market, and when you look at your portfolio right now how do you think about the potential for how do you think about M&A in terms of potentially monetizing non-core assets, should Utica be considered core or non-core at this point and maybe on the flipside in terms of acquisitions from like what are your current thoughts? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [29] -------------------------------------------------------------------------------- Sure. We're always looking to upgrade or optimize our portfolio. Obviously we never comment on M&A but I think the important thing here is our first, second and third priority is to keep a strong balance sheet we have, strong during this period of low prices. -------------------------------------------------------------------------------- Ryan Todd, Deutsche Bank - Analyst [30] -------------------------------------------------------------------------------- Okay, great. Thank you. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Paul Cheng, Barclays. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [32] -------------------------------------------------------------------------------- Thank you. Hey guys, good morning. John there's I think some Bloomberg News talking about you guys maybe looking at to sell Utica. Don't know whether you can confirm it, and if you do have that possibility or thinking what's the rationale behind? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [33] -------------------------------------------------------------------------------- Yes, Paul, obviously we're always looking to optimize our portfolio but we do not comment on M&A. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [34] -------------------------------------------------------------------------------- Okay. And maybe for John Rielly then, do you have a 2016 I know it's early preliminary cost guidance for cash and DD&A? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [35] -------------------------------------------------------------------------------- No -- -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [36] -------------------------------------------------------------------------------- You gave a 2015 over at least the directionally that we're going to see any meaningful drop further from the 2015 level or that's really going to be somewhat similar or modest? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [37] -------------------------------------------------------------------------------- I understand to try to get as much guidance out. And that's why we put this preliminary guidance in this low price environment so everybody can get a feel of what we're doing with capital and also where we think production is going to. However, we're still fairly early in the budget process even working with our partners so at this point, Paul, I can't give specific cost guidance and I'll do that in January on our call as usual. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [38] -------------------------------------------------------------------------------- Okay. And John actually just curious, or then for Greg, at today's defense or I presume it's not really economic to well any oil out from Bakken, is it correct? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [39] -------------------------------------------------------------------------------- Right now it's more economic Paul with the differentials to clear book having narrowed to where they're only about $1 off of WTI to prioritize moving as much oil as you can through pipeline and we're doing that. But we still flex some of our production to rail. So where in the past may be the mix was 50-50 like three months ago rail versus pipeline, right now pipeline is about 60% of what we move and rail is about 40%. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [40] -------------------------------------------------------------------------------- John, can you remind what is the minimum commitment that you have to the JV that you have to rail through? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [41] -------------------------------------------------------------------------------- So our minimum just call it our minimum volume commitment that we had with the Midstream so first of all we don't see any issue meeting our minimum volume commitments because there's a couple of things that allow us to meet that. One is additional volumes coming from our buildout of what we call our Hawkeye project which is south of the river, it allows us to get volumes that we couldn't get into our infrastructure from south of the river to the infrastructure north of the river. And also just up in North Dakota continued flaring and tracking reductions, and then as well we have the third-party volumes, additional third-party volumes that will come our way. So again from our minimum volume commitments from the third-quarter numbers that you actually see in the press release, our minimum volume commitments for 2016 are already essentially below all those numbers that are there. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [42] -------------------------------------------------------------------------------- But you won't be able to tell me what's that number? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [43] -------------------------------------------------------------------------------- Sure. I'm sorry. So if you want the actual numbers, so it's actually in the S-1 but the crude oil loading is 38,000. And so in the third quarter you saw it was 47,000, and the crude oil transportation going through there is 43,000 versus 45,000 that we had in the third quarter. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [44] -------------------------------------------------------------------------------- The final one John and Greg when you're looking at your Gulf of Mexico Deepwater overall your Deepwater portfolio from a supply cost standpoint are they in the middle of the pack of your overall portfolio or at the high-end of your portfolio? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [45] -------------------------------------------------------------------------------- So from a cost standpoint on the Gulf of Mexico it is at -- -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [46] -------------------------------------------------------------------------------- Overall return, the rate that you put it, trying to understand I mean one of your largest competitors that they take a pretty radical approach and totally get out and the argument they make is that in the Deepwater portfolio is at the high-end of the portfolio in supply cost, so they believe that they will be better off without even though they actually have some decent success. So just curious that in your portfolio does it have a similar pattern or you view it differently? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [47] -------------------------------------------------------------------------------- Okay, we would view it differently. But let me just because I don't know what the other competitor was exactly referring to. So let's just talk our Gulf of Mexico assets that are producing. They are when you bring the Gulf of Mexico assets in general together they are at the low cost end of our portfolio average, quite low actually. Opportunities there to drill further exploitation opportunities and bring it into that infrastructure are some of the best returns that we have in the portfolio. So then it just becomes I don't know if they are thinking about further development, future developments, I don't know. But again as Greg said as we look at the offshore right now and where the costs are going in the industry we see that it's a good opportunity like Greg had mentioned with Guyana to be investing in offshore projects right now. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [48] -------------------------------------------------------------------------------- All right. Thank you. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- Paul Sankey, Wolfe Research. -------------------------------------------------------------------------------- Paul Sankey, Wolfe Research - Analyst [50] -------------------------------------------------------------------------------- Hi everybody. Thanks for all the disclosure. Just a brief one from me. You've been very clear about your strategy in terms of cutting CapEx and maintaining a strong balance sheet. I just wondered if that leads you any room for buybacks or any other or whether you're going to sit at this level of financial leverage? Thanks. -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [51] -------------------------------------------------------------------------------- Our priority here is to keep our strong balance sheet strong and that comes first before anything else. So at the end of the day we're cutting our CapEx if we don't think it makes sense to accelerate reproduction in this environment. And obviously share buybacks are taking a backseat as well. -------------------------------------------------------------------------------- Paul Sankey, Wolfe Research - Analyst [52] -------------------------------------------------------------------------------- Great. So we will just sort of model forward around this level of leverage through 2016, assuming whatever oil price we are? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [53] -------------------------------------------------------------------------------- Obviously it depends on your oil price. -------------------------------------------------------------------------------- Paul Sankey, Wolfe Research - Analyst [54] -------------------------------------------------------------------------------- Would you be looking to spend more in a higher oil price environment or restart buyback? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [55] -------------------------------------------------------------------------------- I wouldn't want to speculate on that. We want to keep our options open. -------------------------------------------------------------------------------- Paul Sankey, Wolfe Research - Analyst [56] -------------------------------------------------------------------------------- Understood, okay, thanks John. -------------------------------------------------------------------------------- Operator [57] -------------------------------------------------------------------------------- Brian Singer, Goldman Sachs. -------------------------------------------------------------------------------- Brian Singer, Goldman Sachs - Analyst [58] -------------------------------------------------------------------------------- Thank you. Good morning. The Bakken has been a critical source of growth and outperformance versus your own expectations. Can you just update us on downspacing in the Three Forks program as well as any new completion or drilling techniques that may or may not be having an impact here? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [59] -------------------------------------------------------------------------------- Yes, you bet. First of all the Three Forks reservoir is great. We're really drilling in the sweet spot of the sweet spot of the Three Forks right now. So it's actually outperforming the Middle Bakken marginally. So it's very good resources there in the Three Forks. Regarding downspacing we've got 51 wells that are on a nine and eight spacing pilot. We plan to do 82 this year. 51 are currently online in the nine and eight configuration. Now only 20 of these wells have been online for greater than 90 days. So the initial results are encouraging and we expect to provide pilot results early next year after we get a few more wells with longer production history under our belt. Regarding different completion techniques, we're running 50 stage pilots, so these are 50 stage sliding sleeve wells. We've got 18 out of the 36 wells that we planned this year online, again only 13 of those wells have been online for more than 30 days. So it's a little early but initial production uplifts are in line with expectations and similar to the nine and eight we plan to be in a position to provide the results early next year. Now on the 50 stage and the nine and eight frankly the final decision is going to be an economic one. So does the 50 stage well generate a higher return given the higher cost and if it does then we would expect to move our standard to the 50 stage design from the current 35 stage design. Again it will be an economic return question, not a higher production question. -------------------------------------------------------------------------------- Brian Singer, Goldman Sachs - Analyst [60] -------------------------------------------------------------------------------- Got it. Thanks a lot. As a follow-up to that alone can we keep drilling in the sweet spot of the sweet spot as you said of the Three Forks before you have to move to just the sweet spot or somewhere less sweet? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [61] -------------------------------------------------------------------------------- Multi-years, multi-years, not a concern right now. -------------------------------------------------------------------------------- Brian Singer, Goldman Sachs - Analyst [62] -------------------------------------------------------------------------------- Great. And lastly you talk to maintaining and prioritizing your balance sheet strength. Is there, can you define that, is it based on a certain net debt to EBITDA target? Are you looking to just retain flat debt levels overall? What is the flexibility you have in that balance sheet when we think about the potential for M&A without it getting too high for your own interest? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [63] -------------------------------------------------------------------------------- So as we look at it right now again in this low price environment, as you can imagine the flexibility we have is that we do have $3 billion of cash on our balance sheet. And so that is allowing us to invest through this cycle bringing these longer-term products projects on in 2017 and 2018 as well as invest in exploration such as Guyana. So what we are looking at and I'm going to say more short term now because we are very focused on where the commodity price environment is maintaining that balance sheet and not increasing our debt levels. So that's where we have the ability to be able to use that balance sheet to fund that capital program. Longer term we will see what happens as projects come on. -------------------------------------------------------------------------------- Brian Singer, Goldman Sachs - Analyst [64] -------------------------------------------------------------------------------- Great. So absolute debt flat. Thank you. -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [65] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Operator [66] -------------------------------------------------------------------------------- (Operator Instructions) David Heikkinen, Heikkinen Energy Advisors. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [67] -------------------------------------------------------------------------------- Good morning. Thanks for the time. As you look at Hess Infrastructure Partners you had a $425 million expansion of planned to go on service in 2017. Is that still in the plans for capital in 2016 net to your 50% interest obviously? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [68] -------------------------------------------------------------------------------- So what is and we will give more guidance in January on that. The big component of the capital for the midstream is going to be the completion of what I refer to as the Hawkeye project. Again it's infrastructure, it's pipelines, it's compression to be able to bring volumes south of the river in North Dakota to our infrastructure north of the river, such as our gas plant and our rail facilities. So there will still be significant spend there on that project but in January we will give more specifics on the levels. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [69] -------------------------------------------------------------------------------- And that project was the Hawkeye project so that makes sense. -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [70] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [71] -------------------------------------------------------------------------------- On the other details how much does a Guyana well cost to drill, either appraisal or exploration? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [72] -------------------------------------------------------------------------------- We still don't know the answer to that because we're just getting bids in now, the operator not us, but the operator is still getting bids in on many of those. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [73] -------------------------------------------------------------------------------- So is the Liza well? The first discovery well, what did it cost? -------------------------------------------------------------------------------- Greg Hill, Hess Corporation - COO and President of Exploration & Production [74] -------------------------------------------------------------------------------- I don't want to give you a number because I just can't remember off the top of my head right now. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [75] -------------------------------------------------------------------------------- Okay. And then just thinking through the path forward and really I guess you're getting into that, but fourth quarter you talked about gas plants coming online and NGLs growing, also less downtime. Can you just give some numbers of what a Simops downtime like amount of volumes that you had shut in maybe in the first quarter that won't be with four rigs running or and also what is your incremental NGLs and gas as you bring on the additional plant capacity? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [76] -------------------------------------------------------------------------------- Let me answer the kind of the operational question first. And then I will turn it over to John for the spread. The way to think about this is this year our availability has averaged about 87%. And that's a combination of Simops and maintenance and things you have to do. What we're projecting next year is that will go up 2% fewer Simops. So that will give you kind of a round number that you can model. -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [77] -------------------------------------------------------------------------------- And again I can't be exactly specific for you, David, as we move into 2016 but so right now our production byproduct in the Bakken was about 73% oil, 18% NGLs and 9% gas. You will see per Greg's comments as we get up to the full capacity of the gas plant that we will be increasing on a percentage basis our NGLs and gas. Just can't be specific to you right now until we get further into the budget process. -------------------------------------------------------------------------------- David Heikkinen, Heikkinen Energy Advisors - Analyst [78] -------------------------------------------------------------------------------- That's helpful. Thanks, guys. -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [79] -------------------------------------------------------------------------------- I just want to come back quickly on the Guyana and just remind folks on the call remember these wells are quite shallow. They are only 18,000 feet and they are in 5,700 feet of water. The Liza well cost us about $80 million Hess net. So future wells as you get down the learning curve will be cheaper than that obviously once you get into development mode. -------------------------------------------------------------------------------- Operator [80] -------------------------------------------------------------------------------- John Herrlin, Societe Generale. -------------------------------------------------------------------------------- John Herrlin, Societe Generale - Analyst [81] -------------------------------------------------------------------------------- Yes, close enough. Most things have been asked, I just got a question regarding the potential for impairments. We're seeing a lot of your peers clean house, they're wiping out goodwill, capitalized cost, whatever it may be. What's the likelihood given the reduced CapEx that some costs you're carrying ultimately on to impair? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [82] -------------------------------------------------------------------------------- In the third quarter obviously with a lower cost environment we did not have any impairments in our portfolio. But John all I can tell you right now is as it continues and as we finalize our budget we will assess that and we will report it on fourth quarter but I can't give you any more guidance than that. -------------------------------------------------------------------------------- John Herrlin, Societe Generale - Analyst [83] -------------------------------------------------------------------------------- All right, that's fine. Thanks John. -------------------------------------------------------------------------------- Operator [84] -------------------------------------------------------------------------------- Pavel Molchanov, Raymond James. -------------------------------------------------------------------------------- Pavel Molchanov, Raymond James & Associates, Inc. - Analyst [85] -------------------------------------------------------------------------------- Hey guys, thanks for taking the question. You've given very granular guidance on the Bakken decline for 2016. What other geographies are seeing declines that are factored into your company-wide production target? -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [86] -------------------------------------------------------------------------------- If you go across the portfolio obviously when you have less drilling activity as Greg said we're not drilling NEG, Norway there is a drilling break and things like that. You're just getting the natural decline of the portfolio. So as you can see as you mentioned what the Bakken numbers are we can't be specific at this point until we finalize our budget. But you can kind of faith that the reduction is kind of half due to less drilling activities and half due to natural decline through our portfolio. -------------------------------------------------------------------------------- Pavel Molchanov, Raymond James & Associates, Inc. - Analyst [87] -------------------------------------------------------------------------------- Understood. And I guess on a percentage basis if the Bakken is seeing the steepest decline across your portfolio in 2016 maybe what's the second-biggest contributor to the overall decline? Would it be North Sea or would it be some of you are mature stuff? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [88] -------------------------------------------------------------------------------- What it is and it really has to do with the way the net entitlement works is as Greg had mentioned in JDA we're finishing up the booster compression project there. So one you probably noticed in our numbers we've had some net entitlement changes this year that's dropped in the third quarter for JDA. So on an overall basis the next biggest component beyond Bakken will be JDA. Because there's less cost recovery barrels that we'll have in 2016 as well as with the booster compression there will be some downtime at JDA. -------------------------------------------------------------------------------- Pavel Molchanov, Raymond James & Associates, Inc. - Analyst [89] -------------------------------------------------------------------------------- All right. Very helpful. Appreciate it guys. -------------------------------------------------------------------------------- John Hess, Hess Corporation - CEO [90] -------------------------------------------------------------------------------- I want to give all the callers one more clarifying comment. The $80 million Liza cost was a gross cost, not a net cost. I wanted to clear that up on the call. -------------------------------------------------------------------------------- Operator [91] -------------------------------------------------------------------------------- Paul Cheng, Barclays. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [92] -------------------------------------------------------------------------------- Thank you. John, I know that you don't have a detailed budget but curious since you know you're going to do a forward program in Bakken do you have a number what's the CapEx on Bakken for next year? -------------------------------------------------------------------------------- John Rielly, Hess Corporation - SVP & CFO [93] -------------------------------------------------------------------------------- No, no we don't have that yet again. We'll get that in January again, so we're just fine-tuning how much is near field infrastructure, things like that, so we'll provide that number in January. -------------------------------------------------------------------------------- Paul Cheng, Barclays Capital - Analyst [94] -------------------------------------------------------------------------------- Okay, thank you. -------------------------------------------------------------------------------- Operator [95] -------------------------------------------------------------------------------- Thank you very much. This concludes today's conference. Thank you for your participation. You may now disconnect. Everyone have a great day.
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