Source: Noble Energy Inc.
Noble Energy, Inc. (NYSE:NBL) announced that the Plan of Development for the Alen condensate/gas-recycling project has been approved by the Ministry of Mines, Industry, and Energy of the Republic of Equatorial Guinea.
Noble Energy's board of directors sanctioned the project in December 2010, followed closely by the approval of all partners.
Formerly known as Belinda, Alen is a liquid-rich gas-condensate field and was Noble Energy's first operated discovery in the Douala Basin. The reservoir lies primarily in Block "O", where the original discovery was made, and extends into the northern part of Block "I" offshore Equatorial Guinea. Noble Energy is Technical Operator of the project with an average working interest of 44.65 percent.
Initial field development will include three production wells and three subsea natural gas injection wells tied to a processing platform. Produced condensate will be separated and piped to the Aseng floating production, storage, and offloading vessel on Block "I", approximately 15 miles to the south, where it will be held until sold. Associated natural gas will be reinjected back into the reservoir to maintain pressure and maximize liquid recoveries. The Alen processing facility will be located in approximately 240 feet of water and is designed to handle 440 million cubic feet per day (Mmcf/d) of natural gas and 40,000 barrels per day (Bbl/d) of condensate.
First production at Alen is estimated to commence by the end of 2013 at 37,500 Bbl/d gross (18,750 barrels per day net). Natural gas reinjection is estimated to be 380 Mmcf/d during gas-recycling. The total cost of development is estimated at $1.6 billion ($735 million net).
Charles D. Davidson, Noble Energy's Chairman and CEO, said, "Progress on our lineup of major projects continues with the sanctioning of Alen. This is our second operated development in West Africa, with significant liquid production and cash flow impacts expected to begin with Aseng next year and Alen in 2013. The project team has done a great job of finalizing the overall design, and our expected production rate at Alen is now 25 percent higher than previously estimated. With full payout expected in less than two years, this is another development that delivers strong value for Noble Energy and our shareholders."
The Company expects to recover gross condensate of approximately 88 million barrels. In addition, there is an estimated 930 billion cubic feet of gross natural gas resources at Alen that will ultimately be produced as part of Equatorial Guinea's integrated gas monetization project. Natural gas handling capacity at Alen is being planned for significant expansion as part of the gas monetization project.
Significant capital expenditures for Alen are anticipated in 2011 and 2012. The front end engineering and design work has been completed, and the Company is currently negotiating and awarding key project contracts, including the platform facility construction and installation, as well as necessary drilling resources.
Noble Energy's partners on Block "O" include Glencore Exploration Ltd (25 percent participating interest) and GEPetrol, the national oil company of the Republic of Equatorial Guinea (20 percent participating interest and 10 percent carried interest). The Company's partners on Block "I" include Atlas Petroleum International Limited (27.55 percent participating interest), Glencore Exploration (EG) Ltd. (23.75 percent participating interest) and Osborne Resources Limited, a company within the PA Resources Group (5.7 percent participating interest). GEPetrol has a five percent carried interest in Block "I".