Noble Energy ramps up DJ-Basin production despite 1Q loss, layoffs

Low oil prices caused Noble Energy Inc. (NYSE: NBL) to swing to a $22 million loss in the first quarter of the year.  But the company also said Tuesday that reduced drilling times in the Denver-Julesburg Basin are leading to a higher well count to be drilled this year than previously planned, and that the company plans to supplement it’s single full-time completion unit in the area with a second team as needed in the second half of the year.

The Houston-based company, one of the major oil and gas drillers in Northern Colorado, reported its first quarter results for the period ending March 31, with the loss amounting to 6 cents per share. That’s compared to a profit of $200 million, or 55 cents per share for the same period a year ago.

Oil prices, which this week crept back above $60 per barrel for the first time in months, spent much of the first quarter below $50 per barrel. So despite record production of 318,000 barrels of oil equivalent per day, the company’s revenue in the quarter slid from $1.4 billion a year ago to $759 million this year.

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Noble announced last month that it planned to lay off 100 of its 1,050 Colorado employees. Much of the DJ Basin, which is Noble’s biggest land operation, lies in Northern Colorado.

While it maintained its guidance on capital spending for 2015 at $2.9 billion, Noble raised the company’s full-year sales guidance to between 300,000 and 315,000 barrels of oil equivalent per day thanks in large part to the big first quarter.

Company officials said sales volumes in the first quarter were higher primarily due to continued development in the DJ Basin and Marcellus Shale play in the northeastern United States, with combined production there rising 35 percent. But Noble chairman and CEO David Stover also said that the company would be “further reducing our investment in the Marcellus Shale and shifting more capital in the second half of the year toward high-value areas within the DJ Basin.”

Sales volume in the DJ Basin, where the company finished the first quarter with four drilling rigs operating, hit a record 116,000 barrels per day. The company drilled 57 wells in the DJ Basin during the quarter and commenced production on 48.

After opening well above Monday’s closing price of $50.99, Noble’s share price gradually slid to $50.62 by mid afternoon.