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Noble takes $1.2bn charge related to Eagle Ford assets
US
Noble attributed the write-down primarily to a decline in gas and NGLs prices.
US independent Noble Energy announced this week that it had taken a $1.16bn charge related to its assets in the Eagle Ford shale play in South Texas. The impairment was reported as part of the company’s results for the fourth quarter of 2019.
Noble attributed the write-down primar- ily to a decline in gas and natural gas liquids (NGLs) prices. It joins the ranks of producers that have recently written down some of their shale assets. Notably, super-major Chevron announced a $10-11bn charge primarily related to its Appalachia assets late last year. More recently, EQT warned in mid-January that it anticipated impairment charges of $1.4-1.8bn in its fourth-quarter results. And CNX Resources wrote down $446mn in assets in Pennsylvania in late January.
Noble’s impairment charge led it to post a larger loss for the fourth quarter of 2019, at $1.2bn or $2.52 per diluted share, compared
with a loss of $824mn or $1.72 per share in the same quarter of 2018. However, the company’s adjusted net loss of $0.05 per share came in above analyst expectations of a loss of $0.08 per share.
The producer reported fourth-quarter sales volumes of 373,000 barrels of oil equivalent per day (boepd) on average, marking an increase of more than 6% on the same quarter of 2018. The company expects sales volumes to reach 385,000-405,000 boepd in 2020. The midpoint of this range is about 10% higher than what it achieved 2019, with volumes due to be boosted by the start-up of the Leviathan project in Israel, in which Noble owns a 39.66% stake, at the end of last year.
Noble has also scaled back its spending plans for 2020 by $400mn to $1.6-1.8bn. It joins a number of other producers that are continuing to curb their spending amid ongoing pressure from investors to focus on returns in a persis- tently low oil price environment.
POLICY
Eastern European countries to prepare grids for US LNG
EUROPE-US
LAST week, 11 Eastern European countries have signed a memorandum of understanding (MoU) on developing their gas networks, as part of a Washington-backed project to facilitate sup- plies of US LNG to the region.
The document was signed by Albania’s Alb- gaz, Bosnia’s BH-Gas, Bulgaria’s Bulgartrans- gaz, Croatia’s Plinacro, Greece’s Desfa, Kosovo’s economic development ministry, North Mac- edonia’s GA-MA AD - Skopje, Montenegro’s Montenegro Bonus, Poland’s Gaz-System, Romania’s Transgaz and Slovakia’s Eustream, as well as the United States Energy Association (USEA).
They are all members of the Partnership for Development of Natural Gas Networks in East- ern Europe (EE-NGP), set up by USEA and the United States Agency for International Develop- ment (USAID) in 2017, with the goal of “facili- tating the creation of a regional gas market with potential for US deliveries.”
Transgaz said on February 4 it had signed the MoU in order to work with other grid oper- ators to plan networks and establish alternative sources of gas supply.
Many countries in Southeast Europe rely heavily on Russian gas, and in some cases, it is their only option. The situation is starting to change, however.
On the one hand, new import projects are underway, including LNG regasification plants in Greece and Croatia, and the Trans-Adriatic Pipeline (TAP) that will run through Albania and Greece and terminate in Italy and which is due to supply gas from Azerbaijan starting this year. On the other, new pipelines are being laid across borders to distribute these new supplies across the region.
EE-NGP is not the only initiative aimed at expanding the market for US LNG in Eastern Europe. In August, the US, Poland and Ukraine signed an MoU to enhance the region’s energy security by increasing US gas supply. The three countries want to develop a supply chain to transport US gas from Polish LNG terminals to Ukraine, and possibly other neighbouring countries such as Romania. Achieving this will require an expansion in Poland’s LNG import capacity, however, as well as the cross-border capacity between Poland and Ukraine.
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