Tony Houlihan explains how Hess Corporation uses leadership principles and operational science to enhance performance and build a collaborative culture in the Bakken region.
In his presentation, Tony Houlihan explored how Hess Corporation integrates operational science with leadership strategies to improve performance in its Bakken operations. He explained the complexity of the Bakken production system, which includes thousands of wells, extensive pipelines, and processing facilities. Houlihan emphasized the need to treat the production system as a unified whole and ensure that all teams work together efficiently to achieve optimal results.
A cornerstone of Hess’s approach is its “one team” philosophy, which encourages collaboration and shared responsibility across different departments. Houlihan highlighted the company’s focus on servant leadership, where leaders prioritize the needs of frontline workers to improve decision-making and operational efficiency. He also outlined the role of lean manufacturing principles and structured problem-solving as key components of Hess’s continuous improvement strategy.
Houlihan described innovative practices such as using extended lateral drilling to maximize resource recovery and building strong partnerships with suppliers to adopt new technologies. He concluded by underscoring the importance of an integrated plan that aligns every stage of the production process—from initial development to long-term operations—to create a sustainable and efficient system.
[00:00:00] H.J. James Choo, PhD: I would like to thank Todd for the great opening remarks in shaping the day, including what an acceptable language is in this symposium. Okay, so if you actually are going to use some colorful language, feel free to do because we’re in the actually engineering and construction environment.
[00:00:21] H.J. James Choo, PhD: Alright, so my name is James Choo and I’m gonna have a brief introduction depending on where you’ve met me, you might know me actually as CTO of Strategic Product Solutions, or CTO of Factory Physics, or technical committee member of PPI, or the adjunct lecturer at, here at Stanford. I play those roles but today I’m here actually to introduce Tony.
[00:00:52] H.J. James Choo, PhD: Tony is currently the Director of Execution in Bakken for Hess Corporation. He has over 20 years of oil and gas experience, including international offshore and U. S. onshore. He has held numerous operation, operational, engineering, strategy, and leadership roles throughout his career. Tony has an undergrad degree in chemical engineering, master’s in petroleum engineering, and an MBA from Columbia University, which is not common in the oil and gas industry.
[00:01:21] H.J. James Choo, PhD: But more importantly, having worked with Tony for several years, I can confidently say that he’s a leader that knows how to drive an organization for performance, at the same time, having the patience to hear and work through those that think differently. Please join me in welcoming Tony.
[00:01:48] Tony Houlihan: Morning, everyone. Got the microphone working, it sounds like. Appreciate the introduction. I don’t have as many titles as James does, but I’m going to talk to you a little bit this morning about HESS and what we’re doing in the Bakken. And just to start here, so you can see on the screen, this is a drilling rig in the great state of North Dakota on a beautiful summer’s day.
[00:02:12] Tony Houlihan: Today does not look like that. There’s a little bit of snow on the ground. It’s colder, but we work 24 7, 365. And what we do is incredible. I think some of what Elon Musk, you saw earlier, is amazing, is inspiring. For me, what I really get energized about is how we do it. And I’m going to talk a little bit this morning about the journey that we continue to be on in Hess, in North Dakota.
[00:02:39] Tony Houlihan: The lawyers have obviously helped me with this slide. There’s way too many words than any of you can reasonably be expected to read here. The summary, and you’ll see three names in here. So Hess. Yes. Hess Midstream and Chevron. Do not trade stock on anything I say. That is the summary of this slide.
[00:02:58] Tony Houlihan: If we’re good, I’m going to move right past. So here’s what we’re going to talk about a little bit this morning. So four kind of key ideas. We in Hess, we’re in the resource business. That means the subsurface environment, the reservoir, we’re in a resource business. We are looking to manage costs and produce in the most efficient way we can.
[00:03:20] Tony Houlihan: Infrastructure is a huge component of what we do. Thank you. We have an advantage position, which I’ll talk a little bit about, and that forms a huge component of the system that we manage. I talked about system, and we work very hard not to sub optimize, which is a daily battle. There are certainly teams, individuals who look to, and I’m sure you’ve experienced this in your own businesses, that think, If I win, I’m good.
[00:03:46] Tony Houlihan: I’m going to go home and feel good. What we’re trying to do is make the system win, which sometimes means that individuals need to Lose a little bit or feel pain in their world. That’s okay. If the system wins, if the Balkan wins, that’s a win. So the one team mentality is huge for us. Third point, it’s a journey.
[00:04:07] Tony Houlihan: I really enjoyed what Elon Musk was talking about when he said that the weight of the rocket, I don’t know if you heard that, too heavy. I love that because it means he’s imagining the journey will continue. When they land that rocket, they’re not done. We’re in the same place. In the Bakken, we’re never done.
[00:04:27] Tony Houlihan: It’s a journey to excellence and NASA and the moon, excellence that’s our moon. We talked a little bit about lean already this morning. Lean manufacturing is a huge component of what we do in HESS. We’re really focused on the front line. We’ve got a customer centric culture where leaders are servants, and I’ll come back and talk about that through the presentation.
[00:04:51] Tony Houlihan: So I’m going to level set here a little bit just to give you some context for those maybe that are not familiar with HESS. With an oil and gas operation, or specifically HESS in North Dakota. I’ve got a map of North Dakota, and you can see just to the west is Montana. The, there’s some geographic features, there’s the Lake Sakakawea kind of runs from the west to the southeast, you can see.
[00:05:13] Tony Houlihan: And HESS’s position is colored in green rectangles. North Dakota follows a kind of Jeffersonian model, so what we think about and what we develop are called drilling spacing units. And on the surface, they’re one mile east to west, two miles north to south. So in our production system, what we’re really focusing on as we deliver wells into the operational spaces, how those drilling spacing units are being developed.
[00:05:40] Tony Houlihan: You can see roughly 40 miles east to west, 70 ish miles north to south is the geographic area that we’re working on. This is a top view of the world, of course. We’re developing the subsurface environment. We are developing reservoir that is about 10, 000 feet. Below the ground. Like I say, typically we’re developing two mile long DSU’s.
[00:06:03] Tony Houlihan: The technology is amazing Hess recently just drilled two four mile laterals. So what that means is, we drilled 10, 000 feet down, and then four miles out. So we stacked two drilling spacing units top to bottom, if you will. And from a development efficiency standpoint, we’re very excited about what that potentially can do from a break even standpoint.
[00:06:25] Tony Houlihan: So where are we in the journey? We have approximately 1, 800 wells today on production. We have about the same number of non operated, meaning other companies drilling spacing units that we have interest in. And we have about 1, 800 roughly, depending on oil price, still to go. So you could call us mid life.
[00:06:45] Tony Houlihan: We’re not at the beginning of the journey, as maybe James is going to talk a little bit more now, or in the future rather, the V shape. We’re certainly mid life. And our goal, I think, is How can we be as competitive as possible? I think we understand our system relatively well. There are still surprises.
[00:07:02] Tony Houlihan: How can we make this as effective as possible? Just some numbers. So there’s 500 million standing cubic feet per day of processing that we have. You can see I’ve called out the Tioga gas plant and LM4 Little Missouri four or two gas plants that HESS operates. Infrastructure is a huge component of what we try and do.
[00:07:22] Tony Houlihan: The best well is not the best well from a reservoir or subsurface standpoint. The best It’s the we can drill and bring on today by that we need to have infrastructure to handle products safely and get them to market as fast as possible. I’ll come back and talk a little bit about that through the morning.
[00:07:47] Tony Houlihan: So I’m going to level set here. I’m going to talk a little bit about volatility and specifically here external volatility. So on the left hand side, you can see oil price and I’ve gone back five years here. So you can see I’m going to call it pre covid. So 2019 oil price was relatively stable. This chart doesn’t show it, but prices.
[00:08:07] Tony Houlihan: Of West Texas Intermediate, which is a reasonable benchmark in the industry. It went negative. So traders were actually paying other traders to take physical oil off their hands. That’s never happened before. We recovered from COVID. You can see a gradual kind of increase in oil price to somewhere above 120.
[00:08:25] Tony Houlihan: And today, depending on the day, roughly around 70. So external volatility, we don’t control this. This is something we need to set up our system to be able to manage. On the right hand side, I’m showing you over the last five years, Horizontal rig count. Why horizontal? I talked about the fact that we’re drilling spacing units in a one mile, two mile drilling spacing unit.
[00:08:50] Tony Houlihan: We’re drilling two mile long laterals. We use horizontal drilling rigs to do that. There are a lot of kinds of drilling rigs, but these are the ones that the shale and the tight oil world really focuses on. There’s a couple interesting trends here. I would say 2019 and the trend is true prior to this.
[00:09:07] Tony Houlihan: The number of horizontal drilling rigs in the US, this is lower 48 these are. Is generally decreasing, and that’s an efficiency story. Operators, drilling companies are becoming more efficient. COVID hits, huge drop in activity, down to approximately 100 horizontal drilling rigs across the lower 48, and then a gradual rise back up to 2022, and a moderate decline following that.
[00:09:36] Tony Houlihan: The recovery, if you will, the increasing activity from that COVID dip, I think is driven by two specific reasons. One is through choice. I think operators were diligent, more thoughtful about the investment profile. And the second reason was, and Todd talked about this, the supply chain crunch really showed itself.
[00:09:58] Tony Houlihan: We were struggling to find individuals to go pipe, to go work in the field. We had no expectation pre COVID that this was a problem. It was a massive problem. And it’s still a problem today. It’s something we’re still working through. To make sure we’ve got qualified, interested individuals to come work.
[00:10:17] Tony Houlihan: So we talk about turnover a lot. The final point I’ll make here is the trend I think, if you squint, I think there’s a continual decrease still. Efficiency is still being found. Drilling rigs in this example, and I think it’s true across the industry, many industries, we’re looking to do things better, faster, safer.
[00:10:39] Tony Houlihan: External volatility. So how then do we set ourselves up internally in HES to manage what we can control? So internal volatility, if you will, or internal uncertainty. How do we deploy our human capital? So we think in terms of value streams. So you can see on the left hand side, so I’m calling out a number of leaders in the Balkan leadership team, if you will, and their organizations.
[00:11:08] Tony Houlihan: So land, the individuals that manage and make sure that we have the ability permits working regulators to drill. where we want to, the subsurface folks who are helping us understand the characterization of the subsurface environment, the folks that are thinking about development, planning, predicting the future, drilling and completion, the execution team that I’m running.
[00:11:30] Tony Houlihan: If you think of those first four elements left to that team is what we call the well factory. And that team is producing approximately 10 wells per month. So of the 1800 wells roughly that we have on production today, We’re adding 10 per month to that number. The recipient of those wells are the upstream organization, upstream operations, who manage those wells for 20, 30 years, whatever the life of that well happens to be.
[00:12:01] Tony Houlihan: There’s infrastructure, midstream operations, and of course we need a marketing team to help us then sell the product and recognize revenue. The production system is the thing that knits this together. I’ve shown you, in some sense, it’s a classic kind of organizational structure. www. larryweaver. com The production system is actually what makes it come to life.
[00:12:22] Tony Houlihan: For example, there are individuals who work in infrastructure, in midstream operations, who have tasks, specific tasks, way upstream in the well factory, such that we are generating a product, a well, or a facility on surface, that they are comfortable with, they are accepting of, and they’ll be able to operate for many years to come.
[00:12:46] Tony Houlihan: It’s the production system that really makes this organizational structure come to life. To the lower part of the slide I’m showing, there’s a number of support functions, of course, we don’t do what we do without support from supply chain technology, finance, folks who work in cultural leadership and others.
[00:13:07] Tony Houlihan: So the how, so a little bit of what I just showed you was an org structure. I’m going to talk to you a little bit about oil and how, sorry, and how shale and type, which is unconventionals in the old language, but shale and type requires a different way of operating. shale Distinct, I would argue, from mega projects in the offshore space, for example.
[00:13:29] Tony Houlihan: Operating discipline. So how do we make this stuff come to life? Dashboards, operating rhythm structured problem solving. How do we make this interlocking operating rhythm work on a daily, weekly, monthly, quarterly, annual basis such that the asset can perform, the production system can work?
[00:13:50] Tony Houlihan: Leadership and culture. We talked a lot about this. We have this kind of servant leader. Ideal whereby leaders are thoughtful about what’s happening in the front line. How can I be acting in a way which supports what is happening in the field where the value is really being created to Todd’s point earlier.
[00:14:13] Tony Houlihan: It requires high trust and this will not work in every organization. And this takes many years, I would argue for it to become real. And this is something that we’re working on a daily basis. Innovation, I talked about the impression, the efficiency improvements that we’re finding in drilling.
[00:14:31] Tony Houlihan: That would be in the red part of the triangle. The way we think about innovation and technology is that the lower piece of the triangle is generated in some senses within the teams. As you move into the blue wedge of the triangle and the green wedge, the more transformational types of innovation are typically coming from outside of the team and that requires an organization outside of the asset to be able to take their eyes up to the horizon and think about what might be possible.
[00:15:00] Tony Houlihan: And then partnerships we talked a little bit already about how do we work hand in glove with key suppliers. So parts of the industry, and Hess in particular in the Bakken, what we’re trying to do is work with particular suppliers who are comfortable and willing to work in a relationship based model, which which is not for everybody because that takes a high degree of trust.
[00:15:24] Tony Houlihan: It takes financial commitments from both sides. We’re looking for win. How do we grow the pie? Not just slice the pie, that old transactional model of two bids and a buy, we’re trying to move beyond that to get to a win idea. I’m going to deep dive a little bit in terms of operating discipline.
[00:15:47] Tony Houlihan: Maybe, there we go. And just, again, I’m trying to paint a picture and make the how of this thing become a bit more apparent. Like I said, we have daily, weekly, monthly, and quarterly conversations, whereby. As the work is coming closer to us, it’s being managed in more detail. So we have a view of what the asset’s going to look like every single well location for the next umpteen years.
[00:16:15] Tony Houlihan: As those wells come closer to us in time, we need to have the detail more and more refined such that we know what we’re going to do. And the way by which we make that happen is through, for example, a a quarterly look ahead. We’ve got to work those plans in a collaborative nature because as we work the details, we find surprises.
[00:16:34] Tony Houlihan: Oh, it doesn’t quite look like we thought. Oh, that’s a bit different. So how then do we work through those issues and find, like I said before, a win for the asset, which might mean a particular team needs to do something they would otherwise perhaps not be comfortable doing.
[00:16:53] Tony Houlihan: The cycle of continuous improvement, the dashboards that we use, I was joking last night with with an individual talking about what does visibility mean, and I was recounting a story about how one individual thought visibility meant. I take an email. Of what I expect to do for the next five years.
[00:17:10] Tony Houlihan: And I send it to my bosses. That was their definition of visibility. Yeah, that doesn’t cut it for me at least. So how do we have these kind of daily, weekly, monthly conversations where we’re talking about the right things? We’re really talking about the issues, resolving these constraints and being able to move forward.
[00:17:28] Tony Houlihan: And we need to look at schedule optimization. So one of the things that we do use SPS for is to look at alternatives. Hey, what does it look like if we have a different number of drilling rigs? Or if we have a different thought process in terms of how we’re going to hydraulically fracture wells. If we have a continuous program of hydraulically fracturing, which is not what we do today, what does that look like?
[00:17:51] Tony Houlihan: And we can model it and evaluate it.
[00:18:00] Tony Houlihan: So this is another example of me trying to visualize or help you visualize what this looks like. So our company plans when the Hess Balkan Asset puts forward proposals, we actually use, SPS as our template for what we think we can achieve in the next year and the year after and so on. We develop, like I say, an annual plan based on some key commitments and milestones, which feeds then into, or it’s driven by, I should say, by standard processes.
[00:18:33] Tony Houlihan: For any given well, for example, we know the specific tasks from land, from the drilling department, from completions. We know what a standard well will look like in terms of cycle time throughput, for example. You could then extract for any well, if you were in the drilling department, you could extract all of the wells you were expected to drill in the coming year in a production schedule sense, and you will then know, here’s my work for the next year.
[00:19:05] Tony Houlihan: And as individuals see this work coming forward on a daily basis, we’re using production planning to accept that work, say, yes, I’m good to sign up, and I will complete the work per plan, or no, I won’t, and here’s the reason why. Thank you. Such that the system is live at any given moment. We know how the system is behaving.
[00:19:22] Tony Houlihan: We can identify where there are issues and go address them. And execute and control work, probably most importantly, what gets done in the field needs to be done safely. There’s a snowy day in North Dakota on the far right. Doesn’t matter if it’s snowing, if it’s sunny. We need to get the work done per the plan.
[00:19:41] Tony Houlihan: So we actually have different cycle times for different phases of the year because we know the work is done differently.
[00:19:56] Tony Houlihan: Here’s an example of optimization. As I described the asset earlier, we’re mid life, I would argue, but we still are finding some reasonable optimization. The left hand side of the page, you can see, there’s an iterative process. The top part that’s a zoomed in top structure map of some drilling spacing units, where we laterals, which I described previously as being incredibly attractive things we think to go and do.
[00:20:25] Tony Houlihan: We picked a part of the field, From a subsurface standpoint, we look to say, where can we deploy these four mile laterals? And the subsurface folks and the rolling folks are like, great, got it. We can absolutely go do this. If we stop there, that would be a fail because the four mile laterals behave differently to other types of wells.
[00:20:46] Tony Houlihan: So there are different volumes are going to be produced. And in the lower part, you can see from a compression standpoint, gas compression standpoint, we need to understand the implications of this optimization. So this is where the team needs to, in using the quarterly look ahead process I referenced earlier, needs to think about, four times a year approximately, what does it mean if we have a large change in program, what are the implications of this?
[00:21:11] Tony Houlihan: How are we going to work through this in a collaborative sense to get the win for the asset that we’re looking for? It’s a fully integrated plan. Great. What does that mean? For me, one of the ways I think about that is we have got a clear understanding from the first moment we’re investing to the first moment we’re recognizing revenue.
[00:21:35] Tony Houlihan: That cycle time is not typical, I don’t think, in the shale and tight world to really focus on. It’s something we are laser focused on. And I’ll show you a chart in a couple of slides here. I think we’re doing very well at it. Value stream optimization. Talk a little bit about visibility. We have a complex system.
[00:21:57] Tony Houlihan: Most systems are typically complex. So creating this visibility in terms of how it behaves for the entire team, which, like I said before, requires trust, is really important. And we’re focused on quality, right? There’s, I would argue you could have more damage by handing off poor products, but getting it done on time, than handing off quality products, perhaps taking longer than you would want.
[00:22:21] Tony Houlihan: So having high quality handoffs to make sure the customer, meaning someone downstream in the production system understands and is comfortable with what they’re getting, super important. The culture is at the heart of this. I talked about one team, this win together, lose together mentality.
[00:22:37] Tony Houlihan: That’s huge for us. And it’s something that, like I say is a journey that we will always be on.
[00:22:50] Tony Houlihan: Here’s a, here’s an example where we got it wrong. So this is the 2021 on the left hand side. This is we all remember 2021. And I talked about supply chain. There were actually two reasons. That we failed in 2021, so you can see there maybe you can’t see, but there’s two different colors of dots.
[00:23:09] Tony Houlihan: So this was our plan for 2021, was in yellow and the green dots, and this is time along the x axis and cumulative wells delivered on the y axis. We were late. We were taking longer than we thought we were going to. And for two reasons, like I say the supply chain piece of it was one that’s an external factor, maybe we couldn’t have predicted that.
[00:23:34] Tony Houlihan: But there were two reasons internally that we certainly could have done better on. We had a larger than I think we could digest technology program in 20. We were doing a lot of non standard work and that really hurt us. The other thing that we encountered, which was troublesome, was we had some subsurface surprises.
[00:23:52] Tony Houlihan: So we have when we’re drilling a well in North Dakota now, there’s a lot of offset operators who are injecting saltwater disposal well in shallow zones. So when we’re drilling wells, we now have to go through those. And sometimes we find Pressures that are different than we anticipated, and this was 2021 was really the first time that we saw this in a meaningful way, and we did not handle it well, and we had I would argue a failure of a year 2024 year.
[00:24:22] Tony Houlihan: Obviously, we’re in right now. This lateral is online, so we actually have four drilling rigs today. The system is behaving slightly more predictably. We’re actually ahead of target. You could argue that’s also a failure. That would be an interesting conversation to have. We will beat the number of wells that we targeted to deliver in 2024.
[00:24:44] Tony Houlihan: We already have, in fact, at this point, and we’re adding to it as we go through. How did we do it? I think, as I talked about earlier, we refocused on the basics. We reduced the amount of technology that we were working with. We developed different strategies, drilling strategies, to handle some of that water pressure that I was describing from offset wells.
[00:25:04] Tony Houlihan: And we refocused, I think, on some of the leadership and As James and Dave McKay came up to help us in North Dakota, we focused on getting back to the basics and really doing what needs to be done in terms of managing the system in a healthy way.
[00:25:28] Tony Houlihan: I was asked at at lunch a few months ago, I think, you asked me, how do you know you’re winning? I don’t think I gave you a great answer. I’m going to try and answer it now. On the left hand side, you can see two charts. So the top left is the number of scuffs of compression we have from 2014 to today, 2024.
[00:25:51] Tony Houlihan: It’s roughly quadrupled. That’s not an answer for why we, we think we’re winning. In the lower chart, you can see the drilling performance, so the number of feet drilled by rig per day, right? So that’s a decent measure of efficiency, like how, if I’m paying a drilling rig a certain number of dollars per day, how many feet am I drilling?
[00:26:12] Tony Houlihan: Usually a good measure of efficiency. That by itself is not winning. The chart on the right hand side, I would argue, is a much, much more effective way of understanding are we winning or not. And it is spud to sales. So spud is the first moment where we’re materially investing dollars into a well. Sales is the moment where we are literally selling.
[00:26:36] Tony Houlihan: We’re starting to recognize revenue. So I’m talking about the first moment we’re investing capital to the first moment that we’re recognizing revenue. And the shorter you can make that, and of course that makes sense in terms of WIP, in terms of cycle time throughput, the shorter you can make that, the quicker you’re getting your money back for your investment, the better you’re doing.
[00:26:58] Tony Houlihan: And so these are Balkan operators on the right hand side, spud to sales, number of days, and we’re leading the pack. This is our measure of winning. I’m not saying, Okay. Everyone uses the same measure. Other people do not. Other people have different ways of thinking about this. But the way that we’re setting up the asset within HEST to run, this is a hugely important metric for us.
[00:27:21] Tony Houlihan: Gary, hopefully that answers a little bit that question that we had over some tacos back a few months ago.
[00:27:30] Tony Houlihan: I’m going to wrap up here. We’re not at the end of the journey. I talked a little bit about from a cultural standpoint, how do we keep moving forward? The future development is incredibly exciting. I talked about these extended laterals, which are good from an environmental safety governance standpoint.
[00:27:46] Tony Houlihan: Fewer fewer need to use the surface to set drilling sites, etc. Refracturing is a huge thing. Going back to old wells, thinking about how we can re stimulate those to recover more of the oil. Roughly, of the oil in place in the Barkan, we’re recovering about 10 percent of what’s there. Thank you very much.
[00:28:08] Tony Houlihan: Even an extra 5 percent is huge. It’s a huge value add. And this is true across the industry, everyone’s thinking about this. In terms of execution, how do we get better? Earlier this year, we actually deployed the first electric fleet, frack fleet, in, in the state of North Dakota. So what does that mean?
[00:28:26] Tony Houlihan: So we actually use compressed natural gas from our plant, from Tioga gas plant, to power a company called VoltaGrid, which generates electricity, roughly 30 gigawatts. To hydraulic refractor wells. It’s fantastic from an emission standpoint. It’s fabulous for efficiency and actually it’s turning out to be a little bit of a cost advantage position for us as well.
[00:28:51] Tony Houlihan: Huge. And there’s more things like this coming. And the future of operations, I think methane monitoring is correctly still becoming a massive focal point. And we’re all over it. Carbon capture, I think, North Dakota’s got an interesting position. I think the lower 48, the whole of the US is absolutely chasing that for very good reasons.
[00:29:10] Tony Houlihan: So the point here I’m trying to leave you with is, we’re midlife, we’ve got a system that we think works, we’re not perfect, we’ll continue to drive it forward.
[00:29:21] Tony Houlihan: Just wrapping up here, James, I’ll take questions. Thank you for listening.
[00:29:34] H.J. James Choo, PhD: So following Todd’s opening remark, you might actually wonder, why do we actually lead with Tony’s presentation? If you actually think about all the energy transition projects that’s going on out there, all the data center infrastructure projects going out there, in a form, it’s a deployment project, right?
[00:29:53] H.J. James Choo, PhD: Bakken Unsure Field Development is a deployment type of project where they actually have wells that go from the smallest one now is right, three well pad? Three well pad, yep. To, I think there’s variations up to about nine well pad? Can be. Yeah. So all different configurations that are deployed in multiple locations dealing with numerous number of landowners at the same time being able to hit the target, targeted dates that they actually put it on the market.
[00:30:24] H.J. James Choo, PhD: Yep. He lost, he said he lost in 2011, but you actually saw the charts. Those wells are a few days late, a week late. That’s, that means lost. Yep. Okay. Being able to actually tie to the project that you’re actually working on, with what they’re able to achieve, including the value stream management that he actually talked about, not just within HES, but all the suppliers that are involved in planning, and, Civil infrastructures, the facilities, the drillings, the completions.
[00:30:56] H.J. James Choo, PhD: So we’ll actually talk a little bit about the actual implementation aspect of this with Dave and others in the later on, but if you want to actually grab these guys to actually talk about that’s actually one thing you might want to get their input on. One so we’re, since we’re actually running a little bit behind time, but I’d like to actually ask you one question.
[00:31:16] H.J. James Choo, PhD: Yeah. If you don’t mind. And this really separates HESS from other organizations. Other organizations that’s involved in onshore field development always actually has something called a DUC. DUCs, which is a Drilled Uncompleted Wells. As far as I know HESS, which over a decade, you never actually had that.
[00:31:37] Tony Houlihan: No.
[00:31:38] H.J. James Choo, PhD: Can you tell us why you actually chose that strategy and why do you think others actually chose that strategy?
[00:31:44] Tony Houlihan: Yeah, I can speculate on others. Why we do not is because it’s working capital. It’s because we prioritize flow. We prioritize, as I talked about, rapidly getting to sales and returning on investment.
[00:31:59] Tony Houlihan: We, there are, for example, reasons that we may choose to have some inventories. So seasonal issues can, as I was describing earlier. Can can be a factor in North Dakota, and sometimes we need to have construction occur in the summer months. Reduce that activity in winter months, but we plan for that.
[00:32:17] Tony Houlihan: That wouldn’t be a duck as you’re describing, that would be infrastructure of a different kind. But the premise is we do not plan for working infantry unless necessary. Where necessary, we can explain why, and we have a control around it. Questions?
[00:32:38] H.J. James Choo, PhD: We’re gonna, you can actually grab Tony. He’s gonna be roaming around for today at least. Please join us in thanking Tony for his presentation. Thank you.
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