The margins possible from its Delaware and DJ Basin assets were responsible for Noble Energy’s exit from the Marcellus shale. In a $1.2 billion deal with an undisclosed buyer, Noble has divested of its upstream assets in northern West Virginia and southern Pennsylvania.

“The Marcellus has been a strong performer for Noble Energy over the last few years,” said David Stover, president and CEO of Noble. “During the same time period, we have also significantly expanded the inventory of investment opportunities in our liquids-rich, higher margin onshore assets, which has led us to now divest our Marcellus position,” adding that the move will help the company focus on those areas.

The deal included 415 million cubic feet of natural gas equivalent per day and 100 percent of the working interest in 385,000 acres, 90,000 of which are considered core Marcellus acreage. Proceeds from the divestiture will be used to develop the Delaware Basin and to pay for the company’s previous purchase of Clayton Williams Energy.

In the Delaware Basin, the company is optimistic about its operations to date. Wells there are performing better than previously expected and are showing longer production plateaus after being brought onto production and they are also showing a flatter decline rate that may not even occur until six months after initial production.

Gary Willingham, executive vice president of operations, said his team is only scratching the surface of enhanced completions involving greater proppant loading and cluster spacing. The company is devoting more resources to advanced analytics to better understand the best completion approach, he also said. In the Delaware, the company has seen that proppant load changes in a 7,500 foot well can yield up to 35 percent production increases on a 1.2 million barrel type curve.

Most wells in the Delaware are completed with 3,000 pounds of proppant per stage. The cost to go from 2,000 pounds to 3,000 pounds is only a 10 percent increase but yields a 35 percent production increase. “That is a very efficient use of capital there,” he said.

In the DJ Basin, Noble is also making major improvements with higher proppant loading and tighter cluster spacing. In some cases, new frack designs are increasing production by 50 percent without having any negative impact on the production decline of the well. During the company’s first quarter call with investors, some analysts asked if Noble was approaching a step-changed in completion approach rather than an incremental change. Although the Noble team responded with optimism to the questions, the company did say it would need more data before it could reinterpret its production expectations higher.

Noble is currently running four drilling rigs in the Permian with another two rigs slated to stand up before the end of the year. In the DJ Basin, Noble has 2 rigs running with another two running in the Eagle Ford. All of its oil, gas and produced water in the Delaware Basin has been committed to the infrastructure now owned by Noble Energy Midstream.

Although laterals in the Permian and Eagle Ford are both averaging under 7,600 feet, Noble plans to drill some 10,000 foot laterals in the second quarter at its Delaware acreage. In the Delaware, Noble is paying roughly $175 per foot. In the DJ Basin it is paying under $100 per foot, and in the Eagle Ford, Noble is paying roughly $100 per foot.