Hess Corp. (NYSE:HES) is planning to proceed with the $2.3 billion development of a deepwater oil and gas project in the U.S. Gulf of Mexico, using a configuration of equipment that will be a first of its kind constructed entirely in the U.S.
The project is planned for the Tubular Bells discovery made in 2003 about 135 miles southeast of New Orleans. The field lies in water depths of 4,300 feet to 4,600 feet.
The announcement comes as a number of energy companies have been winning exploration permits for deepwater projects in the wake of the Deepwater Horizon spill.
Drilling is expected to begin next year with initial production expected in 2014, assuming all necessary government permits are received.
Following regulatory approval of assignment of BP PLC’s (BP) interest in the project to Hess, the oil and gas explorer’s stake will rise to 57.1% and Chevron Corp. (CVX) will hold the rest.
The plan initially calls for three subsea production wells and two water injection wells from two subsea drill centers tied back to a third-party owned spar production facility.
Hess shares were down 2% at $59.80 in recent trading. Chevron was off at 98 cents at $105.29.
–By Tess Stynes, Dow Jones Newswires