Company focused on delivering sustainable organic free cash flow in 2020 and beyond
Stover added, “By the end of 2019, our high-return U.S. onshore business
is anticipated to be self-funding, and it will underpin the Company’s
production growth of five to ten percent per year, before the additional
impact of major projects. We will be completing spend for Leviathan,
Highlights from the Company’s 2019 plan include:
- Organic capital expenditures funded by
Noble Energyare planned at a range of $2.4 to $2.6 billion, 17 percent lower at the midpoint compared to 2018.
- Total company volumes are anticipated in the range of 345-365 MBoe/d, an increase of 5 percent(3) at the midpoint as compared to 2018.
- The Company’s U.S. onshore business is anticipated to deliver asset-level free cash flow(2) by the end of 2019, while delivering total volume growth of approximately 10 percent(3) and oil production growth of 13 percent(3) from 2018 levels.
- First gas sales from Leviathan are expected by the end of 2019, delivering substantial production and cash flow growth in 2020.
Organic capital expenditures by area (in $MM) are estimated to be:
|United States Onshore||1,600 – 1,700|
|NBL-funded Midstream||100 – 125|
|Eastern Mediterranean||550 – 600|
|West Africa||100 – 125|
2,400 – 2,600
Sixty percent of the Company’s total organic capital for 2019 is
expected to be spent in the first half of the year due to the timing of
Leviathan spend and U.S. onshore activity. Excluded from the amounts
above is an estimated
Approximately 90 percent of Noble Energy’s U.S. onshore capital will be
focused in the DJ and Delaware Basins. Activity in the
The Company anticipates full-year 2019 average U.S. onshore sales volumes of between 262 and 278 thousand barrels of oil equivalent per day (MBoe/d). Combined, production from the DJ and Delaware Basins is expected to increase throughout 2019, up 15 to 20 percent(3) on a full year basis. Sales volumes in the Eagle Ford are anticipated to be lower on a full year basis, with volumes growing from the first half to the second half of the year.
Compared to the second half of 2018,
Offshore, the Company is focused on maintaining its strong base
production and cash flow in
In E.G., sales volumes are expected to be lower than 2018 due to natural field declines through the year and anticipated downtime for the third-party LNG facility turnaround in the first quarter. The Company’s 2019 capital expenditure guidance includes initial costs for the Alen gas monetization project as well an additional development well at the Aseng oil field to help mitigate field decline. First production from the Aseng development well is anticipated in the third quarter of 2019.
The Company’s new guidance for 2019 replaces its prior 2019 and multi-year outlook.
First Quarter 2019 Guidance
The Company anticipates sales volumes in the first quarter in the range of 321 to 336 MBoe/d. In E.G., sales volumes are anticipated to be lower than the fourth quarter 2018 by approximately 15 MBoe/d as a result of the timing of oil liftings (production is anticipated to be greater than sales) and the turnaround maintenance at the third-party LNG facility. The variance from the fourth quarter 2018 is estimated to be 40 percent from oil volumes and 60 percent from natural gas volumes, which will also result in equity method investment income being lower than prior quarters.
U.S. onshore sales volumes in the first quarter 2019 are also anticipated to be slightly lower than the fourth quarter 2018 as a result of the timing of well activities in late 2018 and early 2019. The first quarter is planned to be the low quarter for wells commencing production in 2019. Natural decline in the Eagle Ford will also impact the first quarter 2019. Second half U.S. onshore production is anticipated to be approximately 15 percent higher than the first half of the year.
The Company’s planned first quarter organic capital expenditures of
Additional full-year and first quarter 2019 guidance details are available in the latest presentation deck provided on the ‘Investors’ page of the Company’s website, www.nblenergy.com.
(1)Free cash flow defined as GAAP cash flow from operations less consolidated capital investments.
(2)Asset-level free cash flow defined as before tax operating cash flow, less capital investments.
(3)Pro forma for asset divestments.
This news release contains certain "forward-looking statements"
within the meaning of federal securities laws. Words such as
"anticipates", “plans”, “estimates”, "believes", "expects", "intends",
"will", "should", "may", and similar expressions may be used to identify
forward-looking statements. Forward-looking statements are not
statements of historical fact and reflect
This news release also contains certain forward-looking non-GAAP financial measures, including free cash flow, and asset-level free cash flow. Due to the forward-looking nature of the aforementioned non-GAAP financial measures, management cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from these non-GAAP measures in future periods could be significant. Management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating Noble Energy’s overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry.