Hess (NYSE:HES) Announces Capex Budget of $5.6 Billion for 2011

Hess (NYSE:HES) announced today it is budgeting $5.6 billion in capex for 2011, with the majority of that for set aside for production.

Canaccord said, "The U.S. oil producer and refiner announced a 2011 capital and exploratory budget of $5.6 billion, nearly all of which is targeted for exploration, development and production: $3.1 billion for production, $1.6 billion for developments and $900 million for exploration. 'More than 35% of our capital and exploratory expenditures in 2011 are devoted to unconventional oil projects. We have a balanced program that will underpin our long term target of growing reserves and production by at least 3% per year,' said Greg Hill, President of Worldwide Exploration and Production. Much of the 2011 field development will occur in the Bakken oil shale in North Dakota and two deepwater fields in the Gulf of Mexico. Production expenditures of approximately $3.1 billion include: 1) Bakken oil shale in North Dakota, where Hess plans to operate 15 rigs and expand production facilities; and 2) drilling production and water injection wells at Valhall (Hess 64% working interest) in Norway and Shenzi (Hess 28%) in the deepwater Gulf of Mexico. Field expansion expenditures includes: expansion of the Tioga Gas Plant and construction of a crude oil rail loading and storage facility to support the development of the Bakken oil shale in North Dakota. Exploration expenditures budgeted at $900 million, include: 1) conventional deepwater drilling in Egypt, Ghana, Indonesia and Brunei; and 2) unconventional onshore drilling in the Eagle Ford Basin in Texas and the Paris Basin in France."

Hess Corporation was trading at $77.71, down 1.46, or 1.84 percent, as of 2:03 PM EST.