Hess Conference Call, First Quarter, 2010

Hess Conference Call, First Quarter, 2010

Financials
Net income: $538 million gain vs $59 million one year ago
Higher commodity prices offset weaker refining results

Operations
Bakken: 13,000 boepd
Currently: 5 rigs in the Bakken
Exit 2010: 10 rigs in the Bakken
Completed four dual laterals: cost -- $10 - $11 million apiece
Five dual laterals in stage of being completed
EUR of dual laterals: one million barrels per well
30-day average for dual laterals: 1,000 boepd (500 per lateral)

Greg Hill (Hess) on dual laterals:

So, where are we on the drilling? Our current base plan is to utilize the dual laterals across most of our phase one acreage, and that's because the Middle Bakken and Three Forks are largely present across that phase one acreage. Now, the cost advantage of this approach is clear.

You get one less vertical wellbore, you have fewer downhole equipment, you have fewer surface facilities. So, we really believe that there is dual lateral approach combined with the application of lean manufacturing techniques and pad drilling is going to result in superior returns for us on the Bakken, which is why we're going with that approach. Now, we'll say it's in its early days. As we learn, as we need to, we'll change and modify as appropriate. But right now, we're happy with dual lateral performance.

Source: Seeking Alpha

These are the five wells currently being drilled by Hess and the counties they are located in (based on conference call, all except one should be dual laterals):

• 18201, HA-State-152-95-1621H-1, McKenzie, 16-152-95
• 18602, RS-Nelson Farms A-156-90-2829H-1, Mountrail, 27-156-90
• 18838, EN-Abrahamson-155-93-3019H-1, Mountrail, 30-155-93
• 17196, BL-Dilland-156-96-2536H-1, Williams, 25-156-96
• 18680, Blou 13, Williams, 12-155-96W, a vertical well? Surrounded by vertical wells

Comment: reviewing the IPs for Hess wells for the past year, they have all been below 500 bopd (with maybe one or two exceptions, and yet in the conference call, Hess said their dual laterals were all averaging 500/1000 bopd on a daily basis with their on-going production from dual laterals. If we are all on the same page of music, it would suggest that the production from Hess wells improved after the initial production.