Noble down in 2Q

Noble Energy recorded a net loss of US$109 million for 2Q 2015, however managed to slightly increase its total sales volume.

Image from Noble.

"Although these are challenging times in our industry, Noble Energy has maintained a strong financial position, improved operating efficiencies and continued our strong safety culture and performance. Operational execution again drove volumes above expectations while materially reducing our operating and overhead costs," said David L. Stover, Noble chairman, president and CEO. "Looking forward, our production is ramping through the remainder of the year, while capital continues to trend lower each quarter. Production increases are driven from our onshore assets and major project startups in the Gulf of Mexico. In addition, we have two material offshore exploration wells currently drilling, one in the Falkland Islands and one in Cameroon, which provide substantial new resource potential. Our operational performance and financial strength will continue to deliver differential results for Noble Energy."

Total sales volumes for the quarter averaged 299,000 boe/d, an increase of 3% compared to 2Q 2014, or 7% after adjusting for non-core assets divested during 2014. Liquids comprised 43% (33% crude oil and condensate and 10% natural gas liquids) of 2Q 2015 sales volumes, with natural gas the remaining 57%.

Offshore sales volumes were lower than the 2014 period and were impacted by planned downtime and maintenance in the Gulf of Mexico and Equatorial Guinea. Assets sold in 2014, including production from the Piceance Basin and China, accounted for a 10 MMboe/d decrease from 2Q 2014 to 2015.

Total production costs for 2Q 2015 declined to $7.83/boe, a reduction of 17% versus 2Q 2014 and 13% versus 1Q 2015.

Gulf of Mexico 

In the Gulf of Mexico, sales volumes averaged 12 MMboe/d, which were comprised of 75% crude oil and condensate, 8% NGLs, and 17% natural gas. Planned third-party facility maintenance at the Na Kika platform and well operations at Galapagos reduced net production by approximately 200,000 boe/d during the quarter.

Progress towards first production for the Big Bend and Dantzler fields remains on schedule. Pipeline installation for the Big Bend project is nearing completion. Big Bend (1 well), with total project completion of 85%, is planned to commence production in 4Q 2015. Dantzler (2 wells), which has a total project completion of 70%, is planned to startup around the end of the year. The two fields will tie back to the Thunderhawk production facility.

Noble also successfully drilled a development well at Gunflint, encountering net pay and reservoir quality consistent with pre-drill expectations. Sidetrack drilling operations have commenced on the second development well at Gunflint. First production from the field is projected in mid-2016 as a two-well tieback to the Gulfstar 1 facility.

Eastern Mediterranean

In the Eastern Mediterranean, Israel natural gas sales volumes averaged 217 MMcf/d, equivalent to the 2Q 2014, reflecting mild seasonal weather demand in 2Q 2015.

During the quarter, the company submitted Declaration of Commerciality and Preliminary Development Plan for the Cyprus Aphrodite natural gas field. Noble Energy and partners are beginning regional gas marketing of the Aphrodite resource and performing pre-FEED work for a potential development connecting the Aphrodite field to natural gas customers in Egypt.

Noble also worked with the government of Israel on establishing a regulatory framework to provide certainty necessary for future investment, which the government of Israel is progressing toward final approval.

Offshore the Falkland Islands, drilling at the Humpback prospect is underway. Humpback is operated by Noble with 35% interest and has more than 250 Mbbl barrels of gross unrisked oil resources. it is anticipated to be at total depth by the end of 3Q 2015.

Noble began the decommissioning process of the MacCulloch field in the North Sea. Shut in of the field, which took place as expected, reduced company volumes by approximately 800 boe/d beginning May 2015.