Noble Energy to Invest US$55mn in Ecuador in 2004

Houston-based Noble Energy plans to invest US$55mn in Ecuador this year to drill one sidetrack and up to three development wells on its offshore Amistad gas field, the company said in a statement. The aim is to increase gas production to supply its Machala gas-fired power plant through 2010, company president Chuck Davidson said in a conference call to discuss fourth quarter results.

Noble's existing wells in Amistad will only be able to supply Machala through 2004-2005, Davidson said. Noble did not want to "over drill" the field initially until it had seen how Ecuador's power market and prices were developing, he added.

Noble expects the utilization rate of its Machala plant to remain constant in 2004, with an expected dispatch rate of 80-85%. "We are comfortable the market has remained the same and we continue to see strong electricity prices," which in Ecuador are linked to the international crude price, Davidson said.

Noble's Machala power plant contributed US$2.3mn of the company's operating income during 4Q03, up from US$1.5mn in 4Q02. Machala produced 232,348MW at an average sales price of 7.2 cents/kWh. For the fourth quarter 2003, Noble Energy produced 26.3 million cubic feet a day (mcf/d) of natural gas from the Amistad field at an average price of US$3.49/mcf. Noble reported net income of US$78.0mn for 2003 and a net loss of US$21.1mn for the final quarter of the year.

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