KEYFACT Energy
Over the the next few weeks, KeyFacts Energy will provide a regular snap-shot review of company capital expenditure plans for 2021.
Canadian Natural’s 2021 capital budget is targeted at approximately $3.205 billion, of which $1.345 billion is allocated to conventional and unconventional assets and $1.860 billion is allocated to long life low decline assets.
Production in 2021 is targeted between 1,190,000 BOE/d and 1,260,000 BOE/d, an increase of approximately 5% from 2020 forecasted levels.
ARC announced a 2021 capital budget of $375 million to $425 million. The company expects to deliver production of between 158,000 boe/day and 165,000 boe/day, of which approximately 80 per cent is low-cost natural gas production.
Forza Petroleum announced budgeted capital expenditures for 2021 are $51 million and dedicated exclusively to the Hawler license area. The planned work program involves drilling five new wells into proven, producing reservoirs and reservoirs still being appraised in the Demir Dagh, Zey Gawra and Banan fields, completing a previously drilled well in the Ain al Safra field for further evaluation, and installing a gathering system to eliminate trucking in the western part of the Hawler license area to reduce environmental impact and operating expense.
Completion of the full budgeted program is dependent on available funding from one or a combination of increased revenue from oil sales resulting from higher than forecast Brent crude oil prices or production, settlement of past due receivables by the Ministry of Natural Resources of the Kurdistan Region of Iraq in respect of oil sales made between November 2019 and February 2020, and additional funding from third parties. The Corporation is in discussions with its controlling shareholder regarding financing arrangements to fund budgeted capital expenditure to the extent internal capital is not available.
Hess Corporation announced a 2021 Exploration & Production capital and exploratory budget of $1.9 billion, of which more than 80% will be allocated to Guyana and the Bakken.
The $1.9 billion budget is allocated as follows: $670 million (35%) for production, $780 million (41%) for offshore Guyana developments and $450 million (24%) for exploration and appraisal activities.
Production
- $450 million to fund a two rig program in the Bakken. The company expects to drill approximately 55 gross operated wells and to bring online approximately 45 wells in 2021. Funds are also included for investment in nonoperated wells.
- $165 million for production activities at North Malay Basin (Hess 50% and operator) and the Malaysia/Thailand Joint Development Area (Hess 50%) in the Gulf of Thailand.
Developments
- $25 million associated with the Liza Phase 1 development on the Stabroek Block in Guyana (Hess 30%), where production reached nameplate capacity of 120,000 gross barrels of oil per day in December 2020.
- $450 million for the Liza Phase 2 development with a capacity of up to 220,000 gross barrels of oil per day, with first production expected in early 2022.
- $235 million for the Payara development with a capacity of up to 220,000 gross barrels of oil per day, with first production expected in 2024.
- $70 million primarily for front end engineering and design work for future development phases on the Stabroek Block.
Exploration and Appraisal
- $450 million to drill 12-15 exploration and appraisal wells on the Stabroek Block in Guyana (Hess 30%). Funds are also included for well planning on Block 42 in Suriname (Hess 33.3%), seismic acquisition and processing in Guyana and the Deepwater Gulf of Mexico and for license acquisitions.
In 2021, ExxonMobil will prioritize near-term capital spending on advantaged assets with the highest potential future value, including developments in Guyana and the U.S. Permian Basin, targeted exploration in Brazil and Chemicals projects to grow high-value performance products.
Capital and exploration investments of $16-$19 billion in 2021; $20 billion to $25 billion annually to 2025 are planned.
2021 capex guidance range of US$25.0 - 26.5 million predominantly relates to one exploration and one development well in South Disouq together with workovers and the installation of an inlet compressor. Up to five new wells and workovers are planned in Morocco and up to four new wells and facilities upgrades at West Gharib.
- South Disouq - WI 55%: US$7.0 - 7.5 million
- West Gharib - WI 50%: US$2.5 - 3.0 million
- Morocco - WI 75%: US$15.5 - 16.0 million
Whiting Petroleum announced estimated capital expenditures of $240 million in 2021, with production expected to average 82 - 88 MBOE per day.
Savannah expects to reduce its Nigerian capital expenditures by 15% over the 2020-23 period from approximately US$118m to US$100m. This has resulted in a reduction in the overall indicative Group capital expenditure plans of around 13% from US$137m to US$119m over the same period. The principal work programme changes will see only one gas well drilled in the 2020–23 period (as opposed to four assumed previously) on the Uquo field and the acceleration of the Uquo field compression project previously assumed to commence in 2026/27 to 2021/22.
Lundin Energy announced a 2021 capital budget of USD 1.2 billion and production guidance of between 170 to 190 thousand barrels of oil equivalent per day (Mboepd).
Development Budget: The 2021 development expenditure is budgeted at MUSD 850 and reflects the actions taken to defer activity from 2020 to 2021, due to the low oil prices in 2020. Approximately 35 percent of the budgeted development expenditure relates to the non-operated Johan Sverdrup field (WI 20%). Development drilling for Phase 1 will continue throughout 2021, while the Phase 2 project will see the installations of the second processing platform jacket, a process module on the existing riser platform and subsea production facilities.
Exploration and Appraisal: The exploration and appraisal budget for 2021 is MUSD 260 and involves the drilling of eight wells, seven of which remain to be drilled, with the programme targeting over 300 MMboe of net unrisked resources.
Abandonment Expenditure: The 2021 abandonment expenditure budget is MUSD 20 to finalise the Brynhild field decommissioning with the removal of the subsea facilities.
Apache
Apache anticipate an upstream capital budget of $1 billion or less, which is based on a WTI oil price of approximately $40 per barrel, and a Henry Hub natural gas price of $2.75. In this price environment, the company's capital allocation priorities will be similar to 2020.
The company has strategically chosen to direct a significant portion of their upstream capital investment to our large-scale opportunity in Suriname.
Cenovus has set capital expenditures of $2.3 billion to $2.7 billion in 2021. The budget includes sustaining capital of approximately $2.1 billion to deliver upstream production of approximately 755,000 barrels of oil equivalent per day (BOE/d) and downstream throughput of approximately 525,000 barrels per day (bbls/d).
Chevron Corporation today announced a 2021 organic capital and exploratory spending program of $14 billion and lowered its longer-term guidance to $14 to $16 billion annually through 2025. This capital outlook will continue to prioritize investments that are expected to grow long-term value and deliver higher returns and lower carbon, including over $300 million in 2021 for investments to advance the energy transition.
Chevron’s capital guidance of $14 to $16 billion annually from 2022 to 2025 is significantly lower than its previous guidance of $19 to $22 billion, which excluded Noble Energy. During this time period, as capital is expected to decrease for a major expansion in Kazakhstan, the company expects to increase investments in a number of Chevron’s advantaged assets, including its world class position in the Permian, other unconventional basins, and the Gulf of Mexico.
Murphy is planning 2021 capital expenditures to be in the range of $675 to $725 million with full year 2021 production to be in the range of 155 to 165 MBOEPD, comprised of approximately 52 percent oil and 59 percent total liquids volumes. Production for first quarter 2021 is estimated to be in the range of 149 to 157 MBOEPD. Both production and CAPEX guidance ranges exclude Gulf of Mexico noncontrolling interest (NCI). Murphy’s 2021 plan reflects management’s continued focus on spending within cash flow, with capital directed toward major projects and short-term free cash flow-generating projects. Such a plan would allow the company to return cash to shareholders through the longstanding dividend, with additional cash utilized in a price recovery to pay down debt.
For 2021, Murphy has allocated approximately $325 million, or 46 percent, of capital to the Gulf of Mexico for both development drilling and field development projects. These projects include activities related to the previously sanctioned Khaleesi / Mormont and Samurai developments, and the St. Malo waterflood project. The non-operated Kodiak #3 well (Mississippi Canyon 727), Lucius #9 well (Keathley Canyon 919), Lucius #3 well (Keathley Canyon 918) are scheduled to be complete and placed online in the first half of 2021.
Canada offshore spending comprises 1 percent of the budget, with approximately $5 million earmarked to support Hibernia.
United Oil & Gas
Capital expenditure in 2021 is forecast to be $5.3m, fully funded from existing operations. The company expects c. $4.7m to be invested in Egypt with two firm wells, five workovers, and facilities upgrades and c. $0.6m to be invested in their Jamaican, Italian and UK assets.
ConocoPhillips has set a 2021 capital budget of $5.5 billion, 17% higher than last year, maintaining its production flat at 1.5 million boe/d. More than half, or 55%, of its $5.5 billion capex this year is allocated for the Lower 48, with the rest spread across our a set of diverse global assets that include Alaska, Canada, Europe, North Africa, Asia-Pacific and the Middle East.
Aker BP has set a total capital budget of USD 2.2-2.3 billion for 2021, with production for the year expected to be 210-220 mboepd net to the company.
KeyFacts Energy: CapEx news