Colorado’s Denver-Julesburg (DJ) Basin is expected to take the bulk of midstream activity in 2021 by a new affiliate created between Noble Midstream Partners LP and Chevron Corp.
Houston-based Noble Midstream said Tuesday it had successfully integrated into a new Chevron affiliate. The integration followed Chevron’s completed merger in October with Noble Energy Inc.
“Noble Midstream achieved significant accomplishments this year, reducing its cash operating costs by more than 20%, placing multiple major equity-method investment pipelines into full service, and beginning to fund our investments and distribution from cash flow from operations,” CEO Robin Fielder said.
“Along with these wins and a 2021 organic capital program focused mainly on well connections, we expect Noble Midstream to generate sizable cash flow in excess of capital expenditures in 2021 and enable the partnership to reduce debt and protect the balance sheet.”
In Chevron’s planned capital and exploratory budget for 2021, most of the midstream activity in the Lower 48 is to be within Noble Midstream’s dedicated acreage in the DJ. The partnership also has dedicated acreage in the Permian Basin.
“On Noble Midstream’s dedicated acreage, the partnership anticipates Chevron activity to be primarily in the DJ Basin, where there is significant backbone infrastructure in place,” management noted.
“As a result, Noble Midstream expects to allocate the majority of its 2021 organic capital program to well connections with minimal larger-scale facility spending.”
Detailed guidance is expected in early 2021.
Among its equity method investments, Noble Midstream does not expect “any material capital outlays next year. The partnership anticipates growing full-year run rate cash flow contribution in 2021 from the intermediate and long-haul assets brought online or acquired this year.”
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