The top oil and gas exploration company operating in Weld County continues, like all others, to see record numbers from drilling programs in northern Colorado, with apparently no end in sight.
Noble Energy officials, in a conference call with analysts on Thursday, reported that its overall drilling of five core areas across the globe saw a 20 percent production increase over 2012, led in large part to the U.S. on-shore drilling in Pennsylvania and Colorado.
Overall for the year, the company saw $978 million in net income.
“(In) The DJ Basin, we had 100,000 barrels of oil equivalent per day increase, an increase over the third quarter despite the impacts of the devastating flood and asset exchange,” said Noble CEO Chuck Davidson in an earnings call with analysts.
Noble and Anadarko Petroleum last fall completed a 100,000-acre asset exchange, which consolidates their operations on either side of Weld County and resulted in a small loss in production for Noble. The move was to pool their assets and reduce expenses.
Overall, in the DJ Basin, which is the field that encompasses subsurface Weld, Noble’s production grew 16 percent from the prior year. In the quarter, the company completed a record 87 wells and commenced production from 90 new wells.
In the quarter, the company also created its first Integrated Development Plan area on the Wells Ranch, northeast of Greeley, which consolidates operations of several wells into one central processing facility to be shipped out via pipeline to market. So far, company officials said, the resulting efficiencies in centralizing operations around a group of wells has been immense. Five more IDPs are planned throughout northern Colorado.
“We continue to drive efficiencies and cost savings through the IDP approach,” said Dave Stover, president and COO of Noble, in the earnings call. “As we implement IDPs across the DJ, it has potential to deliver over a million dollars of net impact. With an inventory of thousands of locations to be drilled, that’s a huge impact to an already robust program.”
Throughout 2014, Noble officials see activity levels increasing.
The company plans to drill and complete more than 500 wells this year in the U.S., swallowing up 70 percent of the companies’ global capital investment.
In the DJ Basin, the company plans on 320 wells with an increasing focus on extended reach laterals. Typically, in horizontal drilling, when the well juts parallel to the surface, it usually extends about 4,000 or so feet. Noble and Anadarko have been experimenting with lateral lengths of up to 10,000 feet.
Officials at both companies have promised more focus on extended reach laterals.
Stover reported in the earnings call that Noble plans to drill 55- 60 extended-reach laterals, which have been typically around 7,000 feet in length.
The company also plans to continue pushing the envelope on drilling more wells per section. At present, they said, they are drilling a minimum of 16 wells per section.
All of the company’s production this quarter has been helped along by the addition of pipelines and the transloading rail facility near Keenesburg, in which the company ships out its crude to outside markets. In fact, officials reported at least 80 percent of the company’s DJ production is exported.
“The start-up of multiple major facilities occurred during the quarter, including the Wells Ranch Central Processing Facility, a third-party oil trunkline and a rail facility, which contributed to increased oil export capacity,” the company reported in its earnings release.
Noble has been exploring a couple of wells in northeastern Nevada, which so far look promising, company officials stated in its earnings call.
“What I see is a lot of possibility in all areas of business,” Davidson told analysts.