Some excerpts regarding the Bakken:
Lastly, we are continuing to make excellent progress toward delivering our production growth forecast of 5% to 8% per year compounded annually. To that end, net production from the Bakken Shale oil play in North Dakota, our principal engine of growth, averaged 65,000 barrels of oil equivalent per day in the first quarter, an increase of 55% over the year ago quarter. We continue to forecast Bakken production this year to average between 64,000 and 70,000 barrels of oil equivalent per day.
Our average well cost from drilling the Bakken in the first quarter was $8.6 million, a decline of 36% from the first quarter last year and a continuation of a steady downward trend since the beginning of 2012. We believe our operating performance in the Bakken ranks among the best.
We continue to make excellent progress towards our mid-decade goal of achieving net production of 120,000 barrels of oil equivalent per day from the Bakken. First quarter net production was 65,000 barrels of oil equivalent per day, up 55% from the first quarter of 2012 and in line with our previous guidance for 2013.
As a result of our transition to pad drilling, as previously discussed, production will be relatively flat through May as we continue to build the inventory of drilled but not completed wells. Production will increase substantially in the second half of 2013 as we ramp up our completion activity. We remain confident in our 2013 Bakken production forecast of between 64,000 and 70,000 barrels of oil equivalent per day.
In terms of individual Bakken well performance, we are focused on driving high returns, which, as you know, is a function of both well cost and well productivity. Well cost for the first quarter averaged $8.6 million per well, down 36% from $13.4 million per well in the first quarter of 2012 and down from $9 million per well in the fourth quarter of 2013.
The continued quarter-and-quarter in cost has been driven by our application of Lean manufacturing techniques. Our productivity continues to be the highest in industry, as 10 of the top 25 wells in the North Dakota Bakken play in 2012 were Hess wells. Therefore, considering well cost and productivity coupled with higher margins from our infrastructure, we believe we're one of the most competitive Bakken operators, and there is much more optimization to come.Zacks: the Bakken is the reason for Hess' success!
In the reported quarter, Exploration and Production (E&P) business posted profits of $1,286 million which more than doubled from the year-earlier profit of $635 million.
Quarterly hydrocarbon production was 389 thousand barrels of oil equivalent per day (MBOE/d), down 2.0% year over year. Lower production was due to the impact of asset sales and lower production from the Valhall Field in Norway. This was partially offset by higher Bakken production year over year.
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