KEYFACT Energy
KeyFacts Energy provides the following recap on E&P capital expenditure plans for 2021.
Africa Oil
Africa Oil's 2021 corporate budget is estimated to be approximately $18-$20 million and includes pre-FID budget for Kenya, G&A and exploration activities.
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.
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.
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.
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.
Cairn
Cairn announced estimated exploration and appraisal capital expenditure (excluding Egypt and Catcher and Kraken) of US$90m, including exploration wells planned in Mexico and the UK North Sea.
Callon has established an operational capital expenditure budget of $430.0 million for 2021 with approximately 80% of spending directed towards drilling, completion and equipment expenditures. The reduction of approximately $60 million from 2020 levels reflects a decrease in the number of drilled wells as well as a full year of achieved capital synergies. Roughly 70% of this development capital will be spent on Permian activity with the remaining balance allocated to the Eagle Ford. Permian development activity will predominantly feature co-development of the Wolfcamp A and B in the Delaware and the Lower Spraberry and Wolfcamp A in the Midland. The Eagle Ford program remains focused solely on the primary target zone, the Lower Eagle Ford Shale, as technical evaluation continues on Austin Chalk potential for future delineation. In total, the Company expects to drill 55 to 65 gross wells and complete 90 to 100 gross wells.
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).
Chesapeake Energy
Chesapeake's planned capital expenditures for 2021 includes operating an average of six rigs and two stimulation crews with an estimated spend of approximately $700 million.
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.
CNOOC
CNOOC aims to raise its 2021 capital spending to between 90 billion and 100 billion yuan ($15 billion), the highest level since 2014. The capital expenditures for exploration, development and production will account for approximately 17%, 61% and 20% of the total capital expenditure, respectively.
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.
Devon has set an upstream capital budget of $1.6 billion to $1.8 billion. The capital program is designed to have the highest capital spend occurring in the first quarter (approximately 30 percent of the total budget) due to the timing of drilling and completion activity across the company’s asset portfolio. After heightened activity in the first-quarter, capital is expected to normalize to lower investment levels throughout the remainder of 2021.
Due to strong operating results in the Delaware Basin, Devon is raising its full-year 2021 oil production forecast to a range of 280,000 to 300,000 barrels per day. This compares to the company’s preliminary outlook issued last year of greater than 280,000 barrels per day.
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.
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
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.
Imperial Oil
Capital expenditures in 2021 are expected to be approximately $1.2 billion.
Kosmos Energy
Kosmos expects to spend approximately $225 to $275 million in 2021, excluding Mauritania and Senegal, around 80% of which will target maintaining and growing existing production and up to 20% targeting growth activities, mainly through infrastructure-led exploration.
In Mauritania and Senegal, total 2021 capital expenditure for Kosmos' working interest is expected to be around $350 million and is expected to be funded primarily from proceeds of the previously mentioned FPSO sale ($250 million in 2021) and National Oil Company loan financing ($100 million).
Jadestone Energy
The company anticipate spending of US$85-95 million, including drilling the H6 infill well and conducting workovers on the Skua SK10 and SK11 wells at Montara;
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.
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.
Neptune Energy
Following organisational changes in 2020 and reflecting its development schedule, Neptune is targeting a further reduction in expenditure in 2021. Development capex, including investment at Touat, is expected to be around $700 million and will be weighted towards the first half of the year, leading to higher expected free cash flow in the second half of 2021 as production also increases. Development capex at Neptune’s sanctioned projects will decline further in 2022 and 2023 as projects are completed and brought onstream.
Exploration and appraisal spend is expected to remain around $150 million in 2021, with up to 11 wells to be drilled. Neptune’s drilling programme in 2021 includes important appraisal wells on the Dugong and Maha discoveries and an exploration well targeting the Dugong Tail prospect.
PetroTal announced a 2021 capital program of US$100 million. The program will be fully funded from the recently announced US$100 million bond issue, supplemented with funds generated from operations and existing cash resources.
Based on the successful 2019 and 2020 drilling results, PetroTal will spud five new development wells at Block 95 costing approximately $7 million for the deviated well and between $12- $14 million per horizontal well. Four of these oil wells are expected to be producing in 2021, with the fifth well on production in February 2022. A second water disposal well is planned in May at an estimated cost of $9 million, providing an expected 50,000 barrels of water per day of additional disposal capacity and enabling oil production growth beyond 20,000 bopd.
Completion of CPF-2 in Q3 2021 for an estimated $12 million will boost fluid handling capacity to 124,000 barrels per day, sufficient for approximately 24,000 bopd. The additional investment will bring total investment in CPF-2 to $24 million, approximately $4 million less than the original estimate. Extensions to the loading dock to handle larger oil volumes and optimal integration of CPF-1 and CPF-2 will require $3 million. Commissioning CPF-2 for commencement in Q3 2021 is designed to facilitate our Q4 2021 average oil production target of between 16,000 and 17,000 bopd.
Ring Energy's 2021 capital spending program is expected to be between $44 million to $48 million, which includes the estimated cost to drill up to eight new horizontal wells and complete up to ten new horizontal wells primarily in its NWS asset area. It includes well reactivations, workovers, infrastructure upgrades, and continuing the CTR program in the NWS and CBP areas. Anticipated leasing, contractual drilling obligations and non-operated drilling, completion, and capital workover projects are also included.
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.
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
Talos Energy
Talos announced capital expenditures of $340 - $370 million, of which approximately 70% is drilling, completions and asset management. The 2021 program is primarily focused on lower-risk development and exploitation projects with quick turnaround to first oil along with selected exploration exposure. The guidance range represents a ~12% reduction from 2020 levels.
The Company's 2021 capital expenditures program focuses primarily on asset management, development and exploitation project categories which carry lower risk than exploration with quick turnaround to first production. These 2021 projects are focused around Talos-owned and operated infrastructure and carry high working interests. Additionally, Talos is currently drilling the Puma West high-impact exploration well, and may execute an additional high-impact exploration project by year end.
Tullow Oil
Tullow expects 2021 capital expenditures to be c.US$265 million, with an additional c.US$100 million to be spent on decommissioning.
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.
Whiting Petroleum announced estimated capital expenditures of $240 million in 2021, with production expected to average 82 - 88 MBOE per day.
W&T Offshore
W&T Offshore announced 2021 preliminary capital spending of between $30 million and $60 million to achieve stable production and maintain the ability to generate free cash flow to fund the reduction of debt and potential acquisitions.
KeyFacts Energy: CapEx news