Repsol plans to release its Marcellus Shale rig in June but will maintain another rig in the Eagle Ford Shale, CEO Josu Jon Imaz said during a quarterly webcast.
Repsol will drop the rig due to the current U.S. gas price environment, Imaz said during a first-quarter 2024 earnings webcast with analysts. As a result, Repsol will also reduce capex in the Marcellus play.
“And as a consequence of this reduction, the free cash flow breakeven for the Marcellus this year is going to be at $2 million Btu [MMBtu]. So, I mean, it’s not a big figure taking into account current prices, but let me say that it’s okay,” Imaz said.
“Saying that, what we are doing is also because we have a more positive view for gas prices for coming years. And what we are doing is guaranteeing that the production is going to be there. This year, we are producing more or less [about] 135,000 barrels a day in equivalent terms. I mean we are talking about gas,” Imaz said.
RELATED
Repsol Eyes Increasing Core US Upstream Business
Imaz said the Madrid-based energy company is trying to mitigate its exposure to Henry Hub through hedging.
“Approximately 20% of our North American gas production in 2024, 50% in 2025 and 60% in 2026,” has been hedged, Imaz said. “On average, around 40% of our North American production in 2024-2026 has been hedged through derivatives … with a minimum floor in all cases above $3/MMBtu. So, we are quite comfortable [in] this position.”
Recommended Reading
Comstock Continues Wildcatting, Drops Two Legacy Haynesville Rigs
2024-02-15 - The operator is dropping two of five rigs in its legacy East Texas and northwestern Louisiana play and continuing two north of Houston.
To Dawson: EOG, SM Energy, More Aim to Push Midland Heat Map North
2024-02-22 - SM Energy joined Birch Operations, EOG Resources and Callon Petroleum in applying the newest D&C intel to areas north of Midland and Martin counties.
Ohio Utica’s Ascent Resources Credit Rep Rises on Production, Cash Flow
2024-04-23 - Ascent Resources received a positive outlook from Fitch Ratings as the company has grown into Ohio’s No. 1 gas and No. 2 Utica oil producer, according to state data.
EOG: Utica Oil Can ‘Compete with the Best Plays in America’
2024-05-06 - Oil per lateral foot in the Utica is as good as top Permian wells, EOG Resources told analysts May 3 as the company is taking the play to three-mile laterals and longer.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.