Morningstar | Noble Anticipates Leviathan Startup in Late 2019
Noble Energy has significant production in several markets, including the U.S., the eastern Mediterranean, and West Africa. The firm also has a long track record of exploration success, with further opportunities on deck in Newfoundland, Gabon, and the Eastern Mediterranean (exploration is inherently risky, but a discovery in any of these areas could generate substantial upside).The U.S. onshore segment accounts for about 70% of Noble's total output. The firm has acreage in several unconventional plays, including the Delaware Basin (where it is one of the largest leaseholders, with almost 120,000 net acres in southern Reeves County). The firm's footprint is highly contiguous, enabling it to use longer laterals to further improve returns (we project a WTI breakeven under $40/bbl). Pipeline congestion in the area is eroding realized prices and hampering growth for many operators, but Noble is still delineating its position and will not start factory-mode development in earnest until late 2019 (shortly before the EPIC pipeline enters service and provides it with 100 mbbl/d firm transport to the Gulf Coast).The international portion of the business, which accounts for roughly 25% of Noble’s current output, provides geographic diversification. It includes Brent-linked oil production in Equatorial Guinea, and natural gas production in the eastern Mediterranean (offshore Israel). The latter triggered intense regulatory scrutiny, and Noble spent years haggling with the local government over export rights and price stability. But this is finally resolved, paving the way for the development of the 22-trillion-cubic-foot Leviathan field. First production is scheduled for late 2019, and management anticipates an average contribution from this asset of 800 mmcf/d in 2020.Noble Energy is an independent energy company, engaged in crude oil and natural gas exploration and production. The company's operating areas include: U.S. onshore, primarily the DJ Basin, Delaware Basin and Eagle Ford Shale; U.S. offshore Gulf of Mexico; Eastern Mediterranean; and West Africa. The company's Midstream segment develops, owns, operates and acquires domestic midstream infrastructure assets, or invests in other midstream entities, with existing focus areas being the DJ and Delaware Basins. The company's activities include geophysical and geological evaluation; analysis of commercial, regulatory and political risks; and exploratory and development drilling leading to production, where appropriate.
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