Noble Energy Inc expects to stay under-budget of $1.5 billion for the year but would consider spending more if oil prices moved and stayed above $50 per barrel. The company reported a slight loss for the first quarter, raising 2016 projected sales volume that will help its shares as much as 6 percent.
Oil companies are gearing up for upcoming drilling projects inspired by 50 percent increases in oil prices since February. Pioneer Natural Resources reported adding rigs only if oil teetered with $50 per barrel. U.S. crude was up 1 percent at $44.10 at 1500 GMT.
David Stover, Chief Executive for Noble stated, “As commodity prices move and sustain above $50 per barrel we will begin to consider additional capital allocation to the U.S. unconventional business, with initial focus on our low-cost and liquid-rich assets in the DJ Basin in Texas.” The company reports preparing sells to Synergy Resources Corp of around 33,100 undeveloped acres in the DJ Basin in Colorado for $505 million.
Noble, who has generated over $775 million in sales thus far in 2016, plans to sell 11 percent of its stake in Israel’s Tamar natural gas field, indicating monetizing its midstream business. In November, they deferred a limited partnership holding midstream assets. It now projects 2016 sales volumes of 405,000 barrels of oil equivalent per day (boe/d), up from 390,000 boe/d.
First quarter expectations were exceeded by a 31 percent rise in sales volumes, as well as reduced costs. Lease operating expenses were also reduced by 34 percent to average $3.63 per barrel of oil equivalent, excluding workover costs in the Gulf.
Noble’s net loss significantly increased to $287 million from $22 million. According to Thomson Reuters I/B/E/S, its loss was 53 cents per share. Before a near give up, their shares rose 6.3 percent to $37.34 in early trading.
Article written by HEI contributor Marcela Abarca.