Noble Energy is implementing an aggressive plan to decrease its capital program by 50% in 2016, as the company moves forward with several development projects planned for the year that include Israel and the Gulf of Mexico.
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Image from Noble. |
The company’s reduced capital program of US$1.5 billion will allot one-third, roughly $500 million, of funds to go towards offshore development and exploration.
“In 2016, we are focused on drilling two to three offshore wells, while obtaining and interpreting seismic to open up future value opportunities,” Noble Energy chairman, president, and CEO David Stover said. “We expect to deliver volumes of approximately 390,000 barrels of oil equivalent per day.”
At Leviathan, Noble is progressing another design, along with its floating production and storage offloading (FPSO) vessel, that utilizes a fixed platform to ensure timely first production.
“The initial development under this fixed platform concept would be anchored by Israeli domestic demand, Jordan power needs, and Egyptian industrial demand,” Noble executive VP, operations Gary Willingham said. “While continuing to refine the technical requirements, initial capacity could start at over 1 Bcf -- 1 billion cubic feet of gas per day, and is quickly expandable to more than 2 Bcf/d. This option provides the most flexibility to match contracted volumes with accelerated development, while retaining the capability to meet existing and growing demand.”
For Q4 2015, Noble reported natural gas sales volume in Israel at some 250 MMcf/d, marking a 9% increase from Q4 2014 that the company said was mainly due to robust power generation demand.
For this year, Noble has included about $100 million for pre-FID capital expenditures on its Eastern Mediterranean projects, with a focus on finalizing gas sale deals within Israel, along with multiple regional customers.
In the Gulf of Mexico, Noble finished strong with both Big Bend and Dantzler starting production in Q4. Its strategy for GoM is to pursue high-quality reservoirs near existing infrastructure to generate substantial value. The company’s budget for the Gulf of Mexico stands at $250 million for 2016.
“A full year of Big Bend and Dantzler, along with the Gunflint startup, will contribute significant year-on-year oil volume growth during the coming year,” Willingham said.
“The lineup includes the Silvergate prospect, which is currently drilling, and an appraisal well for our 2014 Katmai oil discovery. Silvergate is a Miocene target with a resource range between 30 million and 100 million barrels of oil equivalent gross, with nearby subsea tie-back potential, and results are expected by the end of the first quarter.”
Noble anticipates improvements in 2017, compared to 2016 due to the return of Isabella, which has a planned work-over in Q1 2016. In addition, for 2017, the company will benefit from a full year of Gunflint that will be onstream as well.
In Q4 2015, Noble’s adjusted net income was $191 million. The company suffered a net loss of $2 billion for the period, which was negatively impacted by
The period’s volumes increased to 422,000 boe/d, an 8% increase when compared to Q3 2015.
Stover said the increase in volume was driven by accelerated project startups in the Gulf of Mexico, strong asset performance in Equatorial Guinea and Israel, and continued improvement in completion design and infrastructure capacity in the onshore DJ Basin.
Noble ended 2015 with 1.4 billion boe of total proven reserves, a slight increase from year-end 2014.
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