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OIL: Chevron Needs Hess’s Guyana Oil Assets to Boost Reserves: oilprice.com

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Chevron Needs Hess’s Guyana Oil Assets to Boost Reserves: oilprice.com

  • Charles Kennedy writes that Chevron is betting on the multi-billion acquisition of Hess Corp to boost its assets with high-quality Guyana acreage where billions of barrels of oil equivalent have been discovered.
  • “Chevron’s reserves replacement ratio has dropped in recent years and its oil and gas reserves have now declined to the lowest level in at least a decade, according to a Reuters analysis.”
  • The falling reserves and the reserves replacement ratio (RRR) below 100% make the proposed acquisition of Hess key to boosting Chevron’s asset base and RRR in the short term.
  • Excluding impacts from asset sales and acquisitions, organic reserves replacement ratio was 45%, Chevron said, reminding investors that reserves associated with shale development are limited to a five-year planning and execution period per SEC regulations.
  • During the past 10-year period, Chevron’s reserves replacement ratio was 88%, it said.
  • The ratio below 100% means that Chevron is depleting reserves faster than it can replace them.
  • Thus, the $53-billion acquisition of Hess would help increase the reserves and the RRR thanks to Hess’s 30% stake in the Stabroek block offshore Guyana where Exxon has found more than 11b bbl of oil equivalent resources.
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Chevron Needs Hess’s Guyana Oil Assets to Boost Reserves: oilprice.com

  • Charles Kennedy writes that Chevron is betting on the multi-billion acquisition of Hess Corp to boost its assets with high-quality Guyana acreage where billions of barrels of oil equivalent have been discovered.
  • “Chevron’s reserves replacement ratio has dropped in recent years and its oil and gas reserves have now declined to the lowest level in at least a decade, according to a Reuters analysis.”
  • The falling reserves and the reserves replacement ratio (RRR) below 100% make the proposed acquisition of Hess key to boosting Chevron’s asset base and RRR in the short term.
  • Excluding impacts from asset sales and acquisitions, organic reserves replacement ratio was 45%, Chevron said, reminding investors that reserves associated with shale development are limited to a five-year planning and execution period per SEC regulations.
  • During the past 10-year period, Chevron’s reserves replacement ratio was 88%, it said.
  • The ratio below 100% means that Chevron is depleting reserves faster than it can replace them.
  • Thus, the $53-billion acquisition of Hess would help increase the reserves and the RRR thanks to Hess’s 30% stake in the Stabroek block offshore Guyana where Exxon has found more than 11b bbl of oil equivalent resources.