Houston-based exploration and production firm Hess will lay off 300 workers as part of its companywide cost reduction program announced in October last year.
The reductions apply across Hess’ operating footprint as well as in central support functions, reflecting efficiency gains and the company’s announced portfolio exchanges, Hess spokesperson Lorrie Hecker told OE. The company also will reduce its contractor base this year.
“Hess leadership has been communicating openly with employees about our strategy, portfolio moves and cost saving efforts, and we are doing all we can to ease the transition for employees who are impacted including severance, outplacement assistance and other benefits and support,” Hecker said in an email statement.
The cost reduction program is expected to deliver annual cost savings of more than US$150 million starting in 2019. “The combination of this cost reduction program and our high graded portfolio is expected to drive down cash unit production costs by approximately 30% – to less than $10/boe – by 2020,” Hecker said.
To reduce costs, Hess also has been selling off mature assets. During 2017, the company completed the sale of assets in Norway and Equatorial Guinea. Hess also expects to complete in 2018 the sale of its 61.5% interest in the South Arne field offshore Denmark.
“This strategy is enabling us to prefund our world-class opportunity in Guyana, return capital to shareholders and reduce debt, while at the same time significantly lowering our cash unit costs and bolstering our company’s balance sheet,” CEO John Hess said in a 22 December statement.
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