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Noble Energy Approves Alen Gas Project in Equatorial Guinea

Zacks Equity Research

Noble Energy Inc. NBL announced that it has approved the development of the Alen natural gas project situated offshore Equatorial Guinea (“EG”). Gross capital expenditure for the development of this project is estimated to be $330 million, of which the company’s share is nearly $165 million.

Natural gas from the Alen field will be processed through the existing Alba Plant LLC liquefied petroleum gas processing plant (Alba Plant) and EG LNG’s liquefied natural gas production facility (EG LNG) located at Punta Europa, Bioko Island.

Joint Ownership of Alba Field

The Alen field is located on Block O (95%) and Block I (5%), offshore EG. Noble Energy operates the Alen field and holds nearly 45% working interest in the project (45% in Block O and 38% in Block I). Other Block O interest owners include Glencore, with 25% stake, and GEPetrol, with the remaining 30%. Other Block I interest owners include Glencore, Atlas, GEPetrol and Gunvor, with respective interests of 23.75%, 27.55%, 5% and 5.7%.

First production from this offshore Alen field is anticipated in the first half of 2021, with natural gas sales anticipated within 200-300 million cubic feet per day (MMcfe/d). Noble Energy’s share in the said production is expected in the range of 75-115 MMcfe/d.

Total estimated gross recoverable resources from the Alen field are nearly 600 billion cubic feet of natural gas equivalent.

Offshore Expertise of Noble Energy Helpful

At present, Noble Energy operates offshore assets in Eastern Mediterranean. The company’s existing expertise and knowledge to operate offshore oil and gas assets will definitely help it to operate the Alen field.

Recently, the company acquired a 40% interest in Royal Dutch Shell’s RDS.A two offshore blocks in Colombia. Noble Energy was entrusted with the authority to operate the oil-rich offshore blocks due to its knowledge in offshore operations.

Rising Usage of Natural Gas

Per International Energy Agency, natural gas supplies 22% of the energy used on a worldwide basis, and makes up nearly a quarter of electricity generation. The usage of cleaner natural gas is expected to increase in Africa over the next few years, as projected by International Energy Agency.

Noble Energy is not the only company that is exploring offshore assets in Africa. Companies like TOTAL S.A. TOT and BP plc BP, among others, are also producing oil and natural gas from offshore African assets.

Price Movement & Zacks Rank

Noble Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have outperformed its  industry in the past three months.


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