Full text of the article from The Autralian Financial Review

Angela Macdonald-Smith

26 June 2013

US oil player Hess Corporation has cut its workforce at its Perth office just as it nears a decision on the future of its shale exploration venture in the Northern Territory and as progress stalls at its $US6 billion ($6.5 billion) Equus offshore gas project in Western Australia.

A spokeswoman rejected information from one source that 20 people had been made redundant from Hess's Australian operations, but she declined to specify how many of the 100-plus jobs in the Perth office had gone.She said the redundancies stemmed from Hess's transition from a fully integrated energy company to a pure-play exploration and production company and said Hess was still committed to both Equus and its shale ventures in the Northern Territory and WA.

However the New York-based company has reached a critical point in its onshore and offshore operations in Australia.

It must decide this week whether to commit to fund what would be a $100 million-plus five-well drilling campaign at its shale venture in the Beetaloo Basin in the Northern Territory, or walk away with nothing.

Funding the wells, one of which must be a costly horizontal well, would earn it a 62.5 per cent stake in four large permits, where it is partnered by Ireland-based junior Falcon Oil & Gas.

It has already spent $US55 million on seismic work in the permits and has been evaluating the results ahead of this week's "drill or drop" decision.

John Carroll, Falcon's manager in Australia, said Hess's decision would be critical."It will be a big indicator of their view of shale gas in the Territory in the future," Mr. Carroll said.

Meanwhile, work at the Equus project in the Carnarvon Basin appears to be grinding to a halt as Hess continues to hunt for a way to commercialise the 2 trillion to 3 trillion cubic feet of gas in its wholly owned WA-390-P permit.Talks with Woodside Petroleum on feeding the gas into an expansion of the $15 billion Pluto LNG project ended months ago without any deal. Other options involve supplying an expansion of Chevron's Wheatstone project, replacement gas for the North West Shelf venture, or a floating LNG plant.

The delay has left Hess is in the unusual situation of nearing completion of initial engineering and design work for the offshore development without having a plan to bring the gas to market.

It has spent hundreds of millions of dollars on drilling about 20 exploration and appraisal wells in its permit, and on the design work.

The ProjectConnect website, which links project opportunities with suppliers, describes the status of the Equus project as "currently on hold."

The Hess spokeswoman in Perth said the company was "still trying to commercialise" Equus gas, but declined to give details. She confirmed that initial design work for the offshore development, which contractor WorleyParsons-Intecsea started in November 2011, is close to completion.

Hess also has a shale exploration venture in WA's Canning Basin through its acquisition last year of Clive Palmer's Kingsway Oil.

Hess has committed to about $US3.4 billion of asset sales this year, mostly in its downstream business, as it focuses on exploration and production. The streamlining was driven by a shareholder campaign earlier this year led by Elliott Management.

Although its Australian assets are not thought to be on the block, Hess is thought to have canvassed potential partners for Equus, including LNG buyers.

I agree with all of you, just wanted to pass along the report to anyone who was interested. I laughed when I got my news alert today regarding the SA fracking speculation...I am holding out with my mess of shares dreaming of yachts in the caribbean, maybe I will steam to northern australia and visit my money pit some day

I have a copy of the report, if you would like it just send me a PM with your email address

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I haven't been able to find ANY news or recent developments to indicate a move higher like this so I am wondering what is going on this week? Market makers playing games? Institutional holders accumulating shares at a bargain basement price? Slow market reaction to new leadership?