Noble Energy is expecting the final investment decision (FID) for its giant Leviathan development offshore Israel by year-end or early next year, the Houston-based explorer said in its Q3 2016 earnings call.
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The Noble Sam Croft, from Noble Energy. |
“The majority of the investment will occur over three years, with probably the larger portion of it in the second year and third year, while the first portion is probably less than a third of the total capital,” David Stover, Noble Energy chairman, president and CEO said. “The other nice part about that is essentially, really prefunded that first year with the sell-down of the interest we've sold down this year in the Eastern Mediterranean. So, we're in good shape there from the standpoint of being able to fund Leviathan and not take away from any of our other developments.”
Noble confirmed that the Leviathan front-end engineering and design (FEED)work continues, and substantial progress is being made on all of the bids and awards.
“Over the next couple of months, we expect to finalize remaining key milestones for sanction,” Stover said. “This includes additional domestic sales contracts and financing plans, as well as completion of the engineering work, project cost estimates and required construction permits.”
Noble is also considering selling down interest in the area, to ensure funding.
“I would think high likelihood, almost an expectation of before Leviathan comes on production, we'll have sold down the other 7% or 8% of Tamar,” Stover said. “There’s a chance we could sell down some interest in Leviathan also. We've always said that we'd be open to that for the right price, especially post sanction.”
Up until now in Israel, Noble has contracted up to 450 MMcf/d for 15 years equating to estimated gross revenues of more than US$12 billion.
In Q3 2016, Noble posted a $144 million net loss, compared to a $283 million loss in Q3 2015.
During the period, in the Gulf of Mexico, Noble brought Gunflint online in July, marking the company’s third Middle Miocene tieback to start production in the last 12 months. The other two projects include Big Bend and Dantzler.
The three projects more than doubled Noble’s Gulf of Mexico volumes over the last year. The net amount from Gunflint to Noble Energy during the quarter was 6000 boe/d, higher than expected due to additional open capacity at the host facility.
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