Capital Markets | Capital Expenditure | Curtailment/Shut-In

Noble Moving Curtailments Back Online by End of July; Cuts G&A Costs 40% YOY

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   |    Thursday,July 09,2020

Noble Energy Inc. reported a Q2 preliminary update, including sales volumes and cost performance.

U.S. Onshore Production / Curtailment Update

During Q2, Noble's curtailments averaged approximately 11,000 Bbl/d, which totaled 32 MBoe/d on a net basis.

With significant improvements to operating costs and netback pricing, the majority of curtailed volumes are expected to be brought back on production by the end of July 2020.

U.S. onshore oil production capacity averaged 124 MBbl/d in the second quarter (113 MBbl/d sold and 11 MBbl/d curtailed).

Q2 Highlights:

• Q2 CAPEX - investments funded by Noble Energy totaled approximately $100 million, reflecting continued improvement in capital efficiencies in the U.S. onshore business and reduced project spend internationally

• OPERATING COST - achieved record-low unit production costs (lease operating, gathering and transportation, production taxes, and other) of $6.61 per BOE

• GENERAL & ADMINISTRATIVE - reduced G&A expenditures to $63 million, down nearly 40% from 2Q19, from workforce initiatives and reduced consultant and travel costs

• SALES VOLUMES- delivered 350 MBoe/d, including 248 MBoe/d from U.S. onshore, 50 MBoe/d from Equatorial Guinea and 311 MMcfe/d from Israel
  • Oil volumes totaled 130 MBbl/d, including 113 MBbl/d from U.S. onshore

David L. Stover, Noble Energy's Chairman and CEO, said: "Although the global economies have seen significant impact from the COVID-19 pandemic, Noble Energy has fundamentally improved our business for long-term success. This is evidenced in our second quarter execution. We've materially reduced the cost structure of our business, while demonstrating robust production capacity in both our onshore and offshore businesses. These accomplishments provide a strong foundation for Noble Energy as the global economy recovers and commodity prices improve."

International Ops Update

Noble Energy and its partners are finalizing the commissioning of newly-installed compression onshore at the Ashkelon metering station in Israel, to enable increasing sales volumes into Egypt via the EMG Pipeline. Initial system performance is fully meeting expectations and final commissioning is expected to be completed by mid-July. Sales volumes to Dolphinus in Egypt from both Tamar and Leviathan are expected to ramp up throughout the month of July. Following startup on December 31, 2019, the Leviathan field has performed in the top-tier of all offshore major projects. Field and facility uptime has averaged 97% since startup and over 99% during the month of June.

Despite impacts from the COVID-19 pandemic, the Alen Gas Monetization project continues to progress towards an early 2021 start-up. Offshore pipeline installation remains on schedule for the third quarter with final hookup and commissioning in late 2020. During the second quarter, the Company initiated hedge positions to secure global LNG revenues for a portion of expected 2021 and 2022 gas revenues.

During June 2020, Noble Energy was awarded concessions on two exploration blocks offshore the Western Desert area of Egypt. Blocks 6 and 7 each encompass over 800,000 square acres, gross, with final award of the blocks expected later this summer. Noble Energy will hold a 27% non-operated working interest in the position, with Shell Egypt (through its wholly owned subsidiary BG Delta Limited) holding 63% equity as operator, in addition to Egyptian oil company Tharwa with 10%. A number of majors were awarded blocks in and around the Block 6/7 position in the recent licensing round. Noble Energy and partners have a three-year initial phase of exploration during which a seismic program will be conducted targeting deepwater prospects with both oil and natural gas potential.