Noble Energy to nearly double capital spending in 2017

Noble Energy Inc., Houston, has set its organic capital expenditures for 2017 at $2.3-2.6 billion, compared with $1.3 billion in 2016.

Noble Energy Inc., Houston, has set its organic capital expenditures for 2017 at $2.3-2.6 billion, compared with $1.3 billion in 2016.

About 75% of the firm’s total capital program is allocated to US onshore development, primarily focused on liquids-rich opportunities in the DJ basin, Delaware basin, and Eagle Ford. US onshore organic investments are up 90% from 2016 levels.

Eastern Mediterranean capital expenditures, including development costs associated with the Leviathan project off Israel, represent more than 20% of the firm’s total.

Noble’s total US onshore rig count is expected to average more than eight operated rigs for 2017, exiting the year with nine. A third operated rig for the DJ basin has been accelerated and is now planned to be added in the second quarter.

In the Delaware basin, the firm increased its operated rig count on its existing position to three during fourth-quarter 2016 and anticipates running three during 2017. After closing of its purchase of Clayton Williams Energy Inc., Noble expects to add a second operated rig to this position midyear and a third by yearend (OGJ Online, Jan. 16, 2017). Total rigs running at the end of 2017 in the Delaware is anticipated at six. A one rig program is anticipated in the Eagle Ford.

Noble plans to drill and begin production on 225 onshore wells in 2017. The average drilling length across the US onshore activity for 2017 is 8,200 lateral ft, with two thirds of the wells to be drilled in the DJ basin, nearly 25% in the Delaware, and the remainder in the Eagle Ford.

In the DJ basin, half of the anticipated wells in the 2017 program are in Wells Ranch. The firm also will be drilling wells in the East Pony and Mustang areas. In the Delaware basin, the vast majority of the wells are expected to be in the Wolfcamp A interval, with a few wells in other zones.

The majority of the Eagle Ford program is focused on Lower Eagle Ford wells in Gates Ranch. However, the firm plans to also include multiple Upper Eagle Ford wells in its 2017 activity. Noble says it will continue to utilize enhanced completion designs throughout its US onshore well activity.

Capital expenditures in the Eastern Mediterranean for the initial development of the Leviathan project include drilling one production well, long-lead investment items, and ramp up of construction activities. The firm will also complete an additional production well at Tamar off Israel, which was drilled in fourth-quarter 2016.

Late in 2017, Noble anticipates participating in the drilling of the Araku exploration prospect offshore Suriname. The firm holds 20% nonoperated working interest in the prospect, with total gross unrisked resources of more than 500 million boe.

“We will continue to concentrate on long laterals and pad drilling, enhanced completions with higher proppant loadings and tighter stage and cluster spacing, as well as integrated facility design,” commented David L. Stover, Noble chairman, president, and chief executive officer.

Full-year sales volumes are anticipated to average 415,000-425,000 boe/d for 2017, including volumes from the Clayton Williams Energy properties following closing of the deal. In total, this represents a 5% increase over last year, adjusted for 2016 divestments.

Total US onshore volumes are expected to be up 10% vs. 2016 volumes, after adjusting for the impact of 2016 divestments. US onshore oil volumes are expected to be higher by nearly 30% on a full-year basis and 40% when comparing second-half 2017 to second-half 2016. The majority of US onshore growth in 2017 is driven by development programs in the Delaware and Eagle Ford assets.

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