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
Deepwater Roundup 2024: Americas
2024-04-23 - The final part of Hart Energy E&P’s Deepwater Roundup focuses on projects coming online in the Americas from 2023 until the end of the decade.
Deepwater Roundup 2024: Offshore Africa
2024-04-02 - Offshore Africa, new projects are progressing, with a number of high-reserve offshore developments being planned in countries not typically known for deepwater activity, such as Phase 2 of the Baleine project on the Ivory Coast.
Deepwater Roundup 2024: Offshore Europe, Middle East
2024-04-16 - Part three of Hart Energy’s 2024 Deepwater Roundup takes a look at Europe and the Middle East. Aphrodite, Cyprus’ first offshore project looks to come online in 2027 and Phase 2 of TPAO-operated Sakarya Field looks to come onstream the following year.
E&P Highlights: March 15, 2024
2024-03-15 - Here’s a roundup of the latest E&P headlines, including a new discovery and offshore contract awards.
Deepwater Roundup 2024: Offshore Australasia, Surrounding Areas
2024-04-09 - Projects in Australia and Asia are progressing in part two of Hart Energy's 2024 Deepwater Roundup. Deepwater projects in Vietnam and Australia look to yield high reserves, while a project offshore Malaysia looks to will be developed by an solar panel powered FPSO.