Hess Corp. (NYSE: HES) plans to test the limits of mechanical designs for some of its wells in the Bakken Shale play as it aims to further optimize value.

The New York-based company is also likely to launch an IPO for its midstream assets, which analysts said are worth about $2.4 billion.

In North Dakota, Hess will conduct two new completion design pilots in the Bakken this year, COO Greg Hill said during an earnings call Jan. 25. The first, which will be tested on 10 wells, will involve increasing the stage count to 60 stages from its standard 50-stage design. The second pilot involves higher proppant loading.

“The 60-stage sliding sleeve may be approaching the technical limit of mechanical design; therefore, we now have to test the technical limit on proppant loading in a sliding sleeve well,” Hill said, noting this pilot will include 15 of the 50-stage wells. “For both of these trials, reservoir stimulation indicates a potential IP 180 uplift of 10 to 15%. If successful, our future development plans and production outlook for the Bakken will be modified accordingly in 2018.”

Previous 50-stage completions have already improved well performance, giving Hess enough confidence to nearly double its expected uplift in EUR per well by13% from its previous estimate of 7%. Net production averaged near the top of guidance for 2016 at 105 Mboe/d.

The Bakken is one of four key growth areas for Hess, which—like many of its peers—is determined to exercise financial discipline as the industry continues to recover from an oversupply-driven downturn.

Hess reported a net loss of $4.89 billion for fourth-quarter 2016, up from a $1.82 billion loss in 2015. E&P capex fell by 54% to $1.9 billion for 2016. For the fourth quarter, oil and gas production dropped to 311 Mboe/d, compared with 368 M boe/d in 2015. But Hess had year-end proved reserves of 1.1 Bboe, a reserve replacement ratio of 119%. About half of the additions came from the Bakken, Hill said.

CEO John Hess said the company will run a six-rig program in 2017, up from two rigs during 2016.Production this year is forecast to average between 95 Mboe/d and 105 Mboe/d. He also highlighted the company’s future drilling locations in the Bakken’s core, its favorable infrastructure position and application of lean manufacturing techniques.

“Our Bakken team has achieved among the lowest drilling and completion costs and most productive wells in the basin, offering very attractive financial returns,” Hess said, noting Hess Infrastructure Partners is preparing for an initial public offering of LP common units given improvement in the MLP market. Hess owns a 50% stake of the asset.

“We are increasing activity in the Bakken which will bring growth to our onshore portfolio.”

In its earnings release, Hess said it operated an average of two rigs in the Bakken and brought onto production 21 gross operated wells in fourth-quarter 2016, increasing the year-to-date total to 100 wells. Plans for 2017 include drilling about 80 wells and bringing about 75 wells online through the year, Hill said.

“Of the 75 wells we plan to bring online this year, approximately 50 wells will be our new standard 50-stage design and we expect D&C [drilling and completion] costs for these wells to be in line with the $4.8 billion that we averaged in 2016,” he added.

Costs for pilot-test wells will range from $5 million to $5.5 million for the higher stage-count pilot and from $5.5 million to $6 million for the proppant-loading pilot.

Velda Addison can be reached at vaddison@hartenergy.com.