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Noble Energy hit by drop in US gas and liquids prices

US independent posts record US onshore production but sinks to loss

US independent Noble Energy posted a $10 million loss in the second quarter on lower revenues, even though oil and gas production exceeded forecasts.

The fall in turnover was caused by natural gas pricing and natural gas liquids realisations in the US onshore being lower than expected.

While Noble's second-quarter loss was an improvement on the same period of 2018 when it was in the red to the tune of $23 million, the unexpected revenue fall took some of the shine off the company’s quarterly results.

Revenue fell from $1.23 billion in the second quarter of 2018 to $1.09 billion despite production edging higher by 3000 barrels of oil equivalent per day to 346,000 boepd, aided by a record average output of 263,000 boepd from its US shale assets.

In the US onshore, the average NGL price for the quarter was $14.54 per barrel, down from $24.39 a year earlier, while gas prices dropped from $2.29 per thousand cubic feet to $1.61 per Mcf.

Oil prices were also lower in Equatorial Guinea, while the gas price in Israel rose slightly to $5.53 per Mcf.

Despite these issues, chief executive Dave Stover said: “Noble continues to execute well on its strategy to deliver free cash flow through capital discipline and moderate growth. In the second quarter, capital and operating costs were again below plan and production was above expectations.”

In the US onshore, Noble said well cost reductions are exceeding the 2019 guidance targets of up to $1 million per well in the Denver-Jules (DJ) basin and $1.5 million per well in the Delaware basin.

“Completion stages performed per day are on average 50% higher than in late 2018, contributing to reduced well costs and accelerated first production for new wells.”

DJ basin output averaged 145,000 boepd, up 20% from the same quarter of 2018, while production from the Delaware and Eagle Ford basins averaged 64,000 boepd - up more than 35% on 2018 - and 54,000 boepd, respectively.

Noble said its Leviathan gas project off Israel remains on budget and on schedule for first production by the end of 2019.

The platform’s topsides left the US Gulf of Mexico last month and are due to arrive in Israel late this month.

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