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Mike Turner - Senior Vice President, Global Production

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License to Operate: Socio-economic Impacts and the Public-Industry Partnership. Mike Turner - Senior Vice President, Global Production. Hess: Who We Are….

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License to Operate:Socio-economic Impacts andthe Public-Industry Partnership

Mike Turner - Senior Vice President,

Global Production


Hess: Who We Are…

  • Hess Corporation is a leading global independent energy company, engaged in the exploration and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas, and electricity:
  • Ranked No. 74 on the Fortune 100
  • More than $34 billion in revenue
  • 14,000 employees globally
  • Operations in 22 countries
  • Member of the North Dakota community since 1950’s
hess global operations
Hess: Global Operations…


hess growing unconventional portfolio
Hess: Growing Unconventional Portfolio…
  • Bakken Shale
  • >800,000 net acres
  • 16 rig program in 2012
  • Utica Shale
  • ~200,000 net acres
  • ~22 wells in 2012
  • Paris Basin
  • ~340,000 net acres
  • Plan 3 conv. wells beginning 4Q12
  • China
  • JSA’s with Sinopec & PetroChina
  • ~2 MM gross acres
  • Eagle Ford Shale
  • >100,000 net acres
  • ~20 wells in 2012
  • Canning Basin
  • >2 MM net acres
  • Aeromagnetic survey in 2012
  • Beetaloo Basin
  • >6.2 MM gross acres
  • Seismic underway
hess bakken operations
Hess: Bakken Operations…
  • Hess ~67 percent working interest - operator
  • ~900,000 net acres
  • 5frac crews
  • 16 rig program
  • Expanding advantaged infrastructure
the future looks bright
The Future Looks Bright

North Dakota is in an enviable position:

  • At 3 percent the unemployment rate is the lowest in the country compared to a national average of 8 percent.
  • Of the 15 counties in America with the lowest unemployment rates, 11 are in North Dakota.
  • Hess paid royalties of more than $144 million to State and local residents in 2011 - a 300 percent increase on the $36 million paid in 2006.
  • State GDP grew 7.1 percent in 2010 - almost three times the nationwide average.

2011 Actual Expenditures $7.4 billion

Bakken $2.4 billion


North Dakota: Growth Brings Challenges…

Bakken activity rapidly accelerating

Industry must manage above-ground risk to

minimize impact to host communities:

  • Ensuring workforce safety
  • Protecting water quality
  • Protecting air quality
  • Minimizing impact on local infrastructure
  • Living and working in local communities
ensuring workforce safety
Ensuring Workforce Safety
  • Industry Challenges:
  • New/transient workforce
  • Consistency

High activity levels and less experienced workforce are leading to poor safety performance and an increased risk of serious injury or death

  • Hess workforce has invested heavily in training and leadership development
  • Industry must join together in setting common standards and expectations around safety
protecting water quality
Protecting Water Quality…
  • Industry Challenges:
  • Fresh water use
  • Water disposal

State blessed with abundant natural water supply; Industry needs to play its part to preserve it

  • Our commitment: Protect water quality through precise drilling, appropriate sourcing, storage and disposal of water used in drilling
  • Continually seeking innovative ways to reduce water required for fracturing
  • Successfully piloted Reverse Osmosis Plant to utilize brackish water for fracturing if necessary

Well pad at EN-Rehaka, Bakken

protecting air quality
Protecting Air Quality…
  • Industry Challenges:
  • Flaring
  • Emissions

Industry must work together to develop and apply mitigating technologies

  • Our current flaring levels are below the State average and will decrease even further as new capacity at the Tioga Gas Plant comes online in 2013.
  • Installation of four compressor stations to reduce flaring across our operations
  • 50 vapor recovery units installed across operations to capture gas that would otherwise release into environment
  • Industry/government must drive continuous reductions in flaring

Tioga Gas Plant

minimizing impact on local infrastructure
Minimizing Impact on Local Infrastructure…
  • Industry Challenge:
  • Roads / truck traffic
  • Facility construction

Shale energy operations are truck intensive -- particularly in early development, meaning more pressure on local roads

  • At Hess we invest in mid-stream technology to remove 200 trucks loads per day from North Dakota roads
  • Lean approach creates efficiency to minimize truck movements
  • Industry must work together to reduce trucking and overall road traffic
living and working in local communities
Living and Working in Local Communities…
  • Industry Challenge:
  • Jobs
  • Growth
  • Quality of life

A cooperative public-industry partnership can enhance industry benefits and mitigate the challenges

  • Hess donated $1 million to aid flood relief efforts
  • Hess donated $25 million to establish Succeed 2020 – a government education program in North Dakota
    • Opportunity for state -- Partner with communities to accelerate infrastructure growth

Hess employees assisting with flood relief efforts

Hess donating $25 million to Succeed 2020

license to operate socio economic impacts and the public industry partnership
License to Operate: Socio-economic Impacts andthe Public-Industry Partnership
  • Ensuring workforce safety
  • Protecting water quality
  • Protecting air quality
  • Minimizing impact on local infrastructure
  • Living and working in local communities