Low production forecast for Valhall
One of the partners in Norway’s Valhall field has warned that production from the asset is likely to be at the lower end of previous guidance for this year.
Hess says average daily production at the Valhall field in the third quarter this year was up at 37,000 barrels of oil equivalent – much higher than the average of 7,000 boe/d in the third quarter last year.
The US-based corporation which has been undergoing a major portfolio realignment with assets sales in the North Sea – says the change in Valhall output is due to the ramp up of production from new facilities as a result of the Valhall redevelopment.
But Hess warns in its third quarter report: “Full year 2013 net production for Valhall is expected to be at the lower end of the guidance range of 24,000 boepd to 28,000 boepd.”
As part of its portfolio adjustment programme in the North Sea, Hess sold its stakes in the UK Bittern and Schiehallion fields in the second half of last year and its shares in the Beryl fields were sold earlier in the first quarter this year.
Hess reported that it sold its 22% equity in the UK Beryl field and the related Scottish Area Evacuation (SAGE) pipeline system in the first quarter this year for a total of US $442 million, which resulted in a pre-tax gain of $323 m after income tax.
Also in September last year Hess completed the sale of its 16% stake in the BP-operated Schiehallion field in the UK West of Shetlands region, including the Schiehallion FPSO and pipeline systems, for $524 m, resulting in a further pre-tax gain of $376 m.
Earlier in January 2012, Hess had sold off its 3% stake in Norway’s Snohvit field for $132 m, resulting in a further after-tax gain of $36 m.
All of the sales are part of the new company strategy to become a pure exploration and production company.