The changes made by Noble Midstream in its 2020 organic capital guidance are said to reflect the updated producer forecasts in the DJ and Delaware basins
Noble Midstream Partners has announced a 35% reduction in its expected capital for 2020 owing to lower activity expected from oil and gas producers in addition to the partnership’s sustainable capital efficiency gains.
Following a reduction by $75m, the 2020 organic capital guidance of the US-based midstream entity is now in the range of $120-150m. The changes made in Noble Midstream’s 2020 organic capital guidance are said to reflect the updated producer forecasts in the DJ and Delaware basins.
Originally, the master limited partnership announced $190-230m in 2020 net organic capital expenditures aimed at 348- 377 million barrels of oil equivalent per day (BOE/D) Boe/d of oil and gas gathering volumes, and 185-205 million barrels per day of produced water volumes.
Owing to an increasing capital efficiency and a 2020 organic capital program mainly focused on well connections, the partnership expects the additional capital savings to basically offset the cash flow loss from reduced activity.
Noble Midstream general partner CEO Brent Smolik said: “Following recent volatility and announced changes to customer activity plans, Noble Midstream has reduced its expected organic capital spend. We are also nearing full service on several pipeline investments, which are expected to contribute meaningfully to our 2020 EBITDA.
“Noble Midstream will prioritize free cash flow and protect our balance sheet in the current market environment.”
The master limited partnership was created by Noble Energy with an objective to own, operate, develop and acquire domestic midstream infrastructure assets across the US.
Noble Midstream is active in the DJ and Delaware basins
Currently, the partnership is engaged in delivering crude oil, natural gas, and water-related midstream services across the DJ Basin in Colorado and the Delaware Basin in Texas.
Last year, the midstream partnership executed a $149m net capital program.
In November 2019, Noble Midstream agreed to acquire its incentive distribution rights (IDRs) and almost all of Noble Energy’s remaining midstream interests for $1.6bn. The acquired assets include Noble Midstream’s first gas processing complex in the DJ Basin and incremental three-stream gathering in the southern Delaware Basin.