Noble Energy (NBL) Provides Outlook Through 2020, Updates on U.S. Onshore Operations
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Noble Energy, Inc. (NYSE: NBL) is hosting an investor event today to provide an outlook through 2020 and an update on its U.S. onshore operations. Today’s presentation includes a forward base plan utilizing $50 per barrel WTI and Brent and $3 per thousand cubic feet Henry Hub natural gas for 2017, with modest oil price acceleration through 2020. An upside plan is also provided which adds $10 per barrel in commodity price to all periods.
David L. Stover, Noble Energy’s Chairman, President and CEO, commented, “We have made tremendous strides and significantly enhanced our business during the past two years. Today, we are excited to share our strong outlook for the next four years. The high-margin growth we are outlining, led by our DJ Basin, Delaware and Eastern Mediterranean assets, is driving cash flows to increase at a rate of three to four times our volume growth. Our plan is fully funded and provides for additional opportunities or further acceleration, while also improving the balance sheet. Delivery of our plan is building on the momentum of significant outperformance in 2016, which is resulting in a preliminary 2017 outlook that is dramatically improved from original plans. The quality of our portfolio, the quality of our teams, and our ability to execute will deliver substantial value-added growth and enhanced company returns.”
Highlights from today’s presentation include:
- Oil volumes from the Company’s U.S. onshore assets are expected to increase at a compound annual growth rate (CAGR) of 23 percent in the base plan and 29 percent in the upside plan.
- U.S. onshore production grows at a 13 to 16 percent CAGR, adjusted for divestitures.
- Total company production is expected to reach between 540 and 625 thousand barrels of oil equivalent per day (MBoe/d) in 2020, an 8 to 12 percent CAGR, adjusted for divestitures. 2020 sales volumes assume a January startup from the Leviathan field, offshore Israel.
- Approximately 75 percent of total Company capital is allocated to the DJ Basin, Delaware and Eastern Mediterranean assets over the plan period.
- Return on average capital employed(1) is anticipated to reach between 8 and 14 percent in 2020.
U.S. Onshore Update
- The Company has identified over 7,000 gross future drilling locations with an average lateral length of over 8,000 feet. Total U.S. onshore net unrisked resources have increased to 7 billion barrels of oil equivalent.
- Combined Delaware and Eagle Ford production is anticipated to range between 165 and 195 MBoe/d by 2020, up 160 to 200 percent from 2016 volumes. In the Delaware Basin, the Company’s Wolfcamp A estimated ultimate recovery (EUR) per well has been raised to 1.2 million barrels of oil equivalent for a 7,500 foot lateral.
- In the DJ Basin, total sales volumes are expected to grow at an 11 to 16 percent CAGR over the plan period. Per well EURs have been raised by an average of approximately 20 percent in the Wells Ranch, East Pony and Mustang areas.
Preliminary 2017 Outlook
- U.S. onshore oil production is anticipated to be 15 percent higher than 2016 on a full year basis, and 25 percent higher when comparing the second half of 2017 versus the same period in 2016. Total company volumes in 2017 are expected to average between 400 and 410 MBoe/d, up from 2016 after adjusting for 2016 divestment impacts which total nearly 20 MBoe/d.
- Seventy percent of the Company’s 2017 preliminary upstream capital expenditures are targeted for U.S. onshore activities, primarily in the DJ Basin, Delaware, and Eagle Ford. Twenty-five percent are planned in the Eastern Mediterranean, including costs associated with the Tamar development well currently being drilled and Leviathan post-sanction.
- A formal budget and capital program is expected to be finalized early in 2017.
(1) A non-GAAP measure, see appendix of related presentation material for definition of this non-GAAP measure.
Investor Update Webcast
Event: Noble Energy Longer-Term Outlook Date: Wednesday, November 16, 2016 Time: 9:00 am - 10:30 a.m. CT. Webcast and Replay: www.nobleenergyinc.com
The live audio webcast link and related presentation material are accessible on the ‘Investors’ page of the Company’s website. A replay of the event will be available at the same web location.
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