Noble Energy adds takeway capacity to Delaware Basin production

By Patrick C. Miller | July 10, 2018

Houston-based Noble Energy is supplementing its crude takeaway position in the Delaware Basin through an additional firm sales agreement which enables its oil production to reach Corpus Christi on the Texas Gulf Coast.

The five-year agreement provides for gross sales of at least 10,000 barrels per day (bpd) beginning this month, expanding to 20,000 bpd in October for the remainder of the agreement.

Crude sold under the agreement will initially use the buyer's existing firm transport capacity to Corpus Christi. Shortly after the EPIC Crude Pipeline goes into service, Noble Energy anticipates that oil sales under the agreement will be transported using the company’s firm transportation capacity.  

The 730-mile EPIC Crude Pipeline runs across Texas from Orla in the Permian Basin to the Port of Corpus Christi with capacity up to 590,000 barrels per day. The project includes terminals in Orla, Saragosa, Crane, Wink, Midland, Helena, and Gardendale, with Port of Corpus Christi connectivity and export access.

Noble Energy has secured 100,000 bpd of firm transportation capacity on the EPIC pipeline for a 10-year period following project startup—expected in the second half of 2019. Before the recent transaction, the executed firm sales agreements to the Gulf Coast or Cushing markets for Noble’s Delaware crude covered gross oil volumes of 10,000 bpd for the second half of 2018 and 5,000 bpd for 2019. 

Noble Energy also provided an update of its hedge position for the remainder of 2018 and 2019. For the second half of 2018, the company has secured 20,000 bpd of Midland-Cushing basis swaps at a price differential of $2.30 per barrel.  For 2019, it has hedged 27,000 bpd of Midland-Cushing basis at a price differential of $3.23 per barrel.