Hess Liza-3 well offshore Guyana confirms a major oil discovery with breakeven below $40 per barrel
Hess Corporation (ticker: HES) released its third-quarter earnings Wednesday, reporting a loss of $1.12 per share, but the company also updated the markets on its offshore Guyana project, saying that the company now believes recoverable resources are on the high-end of the companys previous estimate of 0.8-1.4 billion BOE.
Given the updated resource estimate, the net present value of the Liza-3 exploratory well could be $6.2 billion ($1.9 billion net to HES) based on calculations from BMO Capital Markets. Our base case valuation for Liza was $4.1Bn ($1.2Bn net to HES) using $70Bbl Brent, 10% discount rate, and the mid-point of 0.8-1.4BBoe resource, said BMO. Under our base case assumptions, Liza would break even at an oil price
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