Noble Energy Inc. posted a second-quarter 2020 net loss of $408 million. Excluding items impacting comparability, the company generated adjusted net loss for the quarter of $114 million. Revenues for the quarter were impacted by weak commodity pricing as a result of the COVID-19 pandemic and global supply and demand factors.
Adjustments from the company’s net loss included a $264 million loss on commodity derivative instruments, net of cash settlements. In addition, the company recorded a $51 million asset impairment related to the Felicita project in Equatorial Guinea and $30 million in corporate restructuring costs that were included in other operating expense.
On July 20, Noble and Chevron announced plans to combine. The deal is expected to close in this year’s fourth quarter (OGJ Online, July 20, 2020).
Net cash provided by operating activities was ($82) million and was impacted by a working capital change in the quarter of ($303) million, reflecting the slowdown of capital activity from first quarter levels.
Second quarter capital expenditures funded by Noble were $102 million, with $62 million related to US onshore activities and $32 million invested in the offshore business between Israel and West Africa. Noble Midstream Partner’s capital expenditures totaled $8 million for the quarter.
During the second quarter, the company repaid $675 million of the $1 billion revolver draw which occurred in first-quarter 2020. Financial liquidity at the end of the second quarter totaled $4 billion, comprising $324 million of cash on hand and revolver borrowing capacity of $3.7 billion.
US onshore
Sales volumes from the company’s US onshore assets totaled 248,000 boe/d in quarter, with the DJ basin contributing 144,000 boe/d, the Delaware averaging 63,000 boe/d, and Eagle Ford of 41,000 boe/d. During the quarter, the company operated 1.5 rigs (1.0 DJ and 0.5 Delaware) and drilled 19 wells (16 DJ and 3 Delaware) onshore. Early in the quarter, Noble completed 6 wells (4 DJ and 2 Delaware) and commenced production on 22 new wells (16 DJ and 6 Delaware).
The company curtailed on average 11,000 b/d (30,000 boe/d) on a net basis for the quarter. Some 80% of these curtailments were in the DJ basin, with the remainder in the Delaware, and minimal impact to the Eagle Ford. The majority of curtailed volumes were brought back on production by the end of July 2020.
Eastern Mediterranean
Second quarter 2020 sales volumes from Tamar and Leviathan totaled 1.09 bcf of natural gas equivalent per day, gross, combined. As compared to the first quarter of the year, volumes were lower by 23%, driven by the demand impacts from the COVID-19 pandemic as well as the normal seasonal weather-based decline experienced in the second quarter. Net sales volumes to Noble Energy for the quarter were 311 MMcfe/d.
Following startup on Dec. 31, 2019, Leviathan field has performed in the top-tier of all offshore major projects, the company said. During the second quarter, field and facility uptime averaged in excess of 99%. Noble Energy finalized the commissioning of additional compression onshore at the Ashkelon metering station in Israel in July, to increase the capacity throughput for higher sales volumes into Egypt via the EMG pipeline.
West Africa
Sales volumes for Equatorial Guinea averaged 50,000 boe/d, including 16,000 b/d of crude oil. Strong base field performance continues at the company’s operated Aseng and Alen fields, as well as non-operated Alba field and onshore facilities.
The Alen Gas Monetization project continues to progress towards an early 2021 start-up. During July, the shore crossing site preparation for connecting the Alen natural gas pipeline to the onshore facilities continued. Offshore pipeline installation remains on schedule for the third quarter.