UPDATE 1-Hess cuts budget by 16 percent, keeps most spending in Bakken
(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. Continuación...