Advertisement

Noble Energy sells off Colorado shale holdings

Buyer Synergy Resources said the new acreage could help boost its production for the year.

By Daniel J. Graeber
Noble Energy sells off some of its holding in Colorado shale for more than $500 million to rival Synergy Resources, which described the acquisition as a win. File Photo by Gary C. Caskey/UPI
Noble Energy sells off some of its holding in Colorado shale for more than $500 million to rival Synergy Resources, which described the acquisition as a win. File Photo by Gary C. Caskey/UPI | License Photo

HOUSTON, May 4 (UPI) -- Selling off parts of its shale holdings in Colorado means a better chance to strengthen the balance sheet for the year, Noble Energy said.

Noble sold off more than 33,000 undeveloped acres in the Denver-Julesburg basin in Colorado to Synergy Resources for $505 million. Noble said, combined with other sales this year, this brings the total proceeds to more than $775 million.

Advertisement

David Stover, the top executive at Noble, said in a statement the company can now focus on its "deep inventory" in the Denver-Julesburg basin, which "further enhances our flexibility to strengthen our investment-grade balance sheet and accelerate activity levels once justified by higher commodity prices."

The assets sold to Synergy yielded about 2,400 barrels of oil equivalent per day and, in terms of acreage, represented about 10 percent of the Colorado shale holdings for Noble. After the transaction, Noble controls about 360,000 net shale acres in the shale basin.

Noble in February set a 2016 spending target of about $1.5 billion, which is 50 percent lower than outlined for last year. The company said about 60 percent of its capital program would target shale assets in the Lower 48 U.S. states.

Advertisement

For Synergy, the company said first quarter revenues were slightly lower than one year ago, but noted its higher production volumes "were more than offset by lower commodity prices." Synergy said it expects a strong performance from the new acreage in Colorado, which it described as "transformational."

The deal follows a ruling from the Colorado Supreme Court that state laws trump local laws that would restrict hydraulic fracturing in oil and gas basins in the state.

Latest Headlines