Noble Energy Inc. CEO Chuck Davidson said he was "really pleased" with the company's growth in the Denver-Julesburg (DJ) Basin, and said Noble was moving forward with deepwater drilling in the Gulf of Mexico (GOM) after receiving the industry's first permit to resume post-moratorium drilling there (see Daily GPI, March 1).
Speaking during an earnings report call on Thursday, Davidson said Houston-based Noble sold 114 Mboe/d in the U.S. during 1Q2011, with 45% of the total U.S. volumes being liquids. He attributed the growth to new and existing wells in the DJ Basin and the Wattenberg Field. In a separate statement, the company said it drilled 12 additional horizontal Niobrara wells during 1Q2011 in the DJ Basin, nine of which were located in the Wattenberg.
"We've now identified more than 2,000 potential drilling locations on our 400,000-acre Wattenberg position," Davidson said, adding that the DJ Basin contained possibly 600 MMboe. "We're accelerating the program where we continue to see strong well results in the core and on the edges of the field. We feel very good about where this program is headed."
Noble COO Dave Stover echoed that sentiment.
"The horizontal Niobrara play in the DJ Basin continues to be a very exciting story for us," Stover said Thursday. "We remain on target to drill more than 70 horizontal Niobrara wells in 2011, with more than 80% of them in Wattenberg as we continue to increase our activity in this field."
The Wattenberg, a basin-centered field just north of Denver, is considered one of the largest natural gas deposits in the United States. The field has produced more than 4 Tcf of gas.
With its international operations included, the company reported a total sales volume of 215 Mboe/d for the first quarter of this year, a 9% increase over the same quarter one year ago.
Noble reported that net income totaled $14 million -- or 8 cents/share -- with revenues of $899 million for 1Q2011. But excluding items such as unrealized commodity derivative losses and rig standby charges in the GOM, adjusted net income for 1Q2011 was $240 million -- or $1.35/share -- a 74% increase over the adjusted net income reported during 1Q2010.
Davidson said drilling had resumed in the Santiago prospect in the GOM, and work was continuing on securing a permit to drill at the Deep Blue prospect. He said Noble was also preparing to submit a permit for a third GOM prospect, Gunflint.
"We were certainly pleased to get the industry's first drilling permit post-moratorium to return to operations at Santiago," Davidson said. "We've now seen a number of drilling permits issued across the industry, and I believe this is a direct result of the industry making significant enhancements to its ability to respond to an incident and to reduce the likelihood of an incident happening."
Stover said Noble had reentered the Santiago prospect about two weeks ago and should have results from a test well there within 40 days. If successful, the well could be in production in 2012. Meanwhile, Stover said the company hoped to begin drilling in the Deep Blue prospect during 3Q2011, and the Gunflint prospect during 4Q2011. He called Noble's receiving the first permit to return to deepwater drilling in the GOM "a great recognition for our company."
"We hope to operate our one rig continuously through the remainder of the year, dependent on receiving the permits at Deep Blue and Gunflint," Stover said Thursday.
Davidson said the company expects its total sales volume to be between 208 and 218 Mboe/d during 2Q2011.
"Versus the first quarter of this year, our U.S. volumes should be relatively flat with growth from the DJ Basin programs offsetting the natural decline in the offshore and other onshore areas," Davidson said.
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