(Adds details of budget, stock)
By Ernest Scheyder
WILLISTON, N.D., Jan 26 (Reuters) - Oil and natural gas producer Hess Corp cut its capital budget by 16 percent on Monday, saying it has balanced concerns about slipping crude prices with growth projects in places like North Dakota crucial to the company’s future.
The oil industry is grappling with a more-than 60 percent drop in crude oil prices since last June amidst global oversupply concerns, with many producers opting to sharply reduce spending and hope for a price rebound.
In that context, the decision by Hess to only cut 16 percent of its budget was a far-less dramatic step than peers. Continental Resources Inc, for instance, slashed its 2015 budget by nearly 50 percent.
Hess, which operates in the U.S. Gulf of Mexico, Denmark and Norway, among other places, plans to spend $4.7 billion this year.
The single-largest expenditure for the company’s capital budget this year will again be in North Dakota’s Bakken shale formation, considered one of the largest oil reserves in the world.
Hess, already the state’s third-largest oil producer, will spend $1.8 billion there this year, down from last year’s $2.2 billion. Executives plans to open 210 North Dakota wells this year compared with last year’s 238.
Hess holds most of its North Dakota acreage by production, an industry designation that means it’s not required to drill new wells to hold leases with landowners. Given that, the company can afford to wait out low oil prices.
“Hess has some of the best acreage in the Bakken, and we will continue to drill in the core of the play which offers the most attractive returns,” Hess President Greg Hill said in a statement.
New York-based Hess also plans to drill new wells in Ohio’s Utica shale formation, as well as offshore wells in the U.S. Gulf of Mexico, Norway, Guyana, Malaysia and Thailand.
Hess said it plans to finish drilling in the oil-rich Kurdistan region of Iraq as well.
Shares of Hess have lost 28 percent of their value in the past six months, closing Monday at $71.65 per share. (Reporting by Ernest Scheyder; Editing by Grant McCool)