Noble Energy, Inc. (NYSE:NBL) (“Noble Energy” or “the Company”)
today announced results for the third quarter of 2016, including a
reported net loss attributable to Noble Energy of $144 million, or
$0.33 per diluted share. The adjusted net
loss
(1) attributable to Noble Energy for the
quarter was $30 million, or $0.07 per diluted share, which excludes
the impact of certain items typically not considered by analysts in
formulating estimates. Adjusted EBITDAX
(1)
was $645 million.
David L. Stover, Noble Energy’s Chairman, President and CEO,
commented, “Once again, the strength of our high-quality asset base
and operational execution was on display in the third
quarter. This was demonstrated by our continued outstanding
production performance and cost control. Other recent strategically
significant highlights include the successful IPO of the Noble
Midstream business, the separation of our Marcellus Joint Venture,
and the signing of the first sizable export contract to support
Leviathan development. Year to date, we have operated our
business within organic cash flows while also monetizing nearly
$1.5 billion in assets. Improving our balance sheet has
positioned our business for activity acceleration and allowed us to
pay down debt. We have already added an additional two rigs
to our Texas assets in the fourth quarter and I would expect that
we will further increase activity in the near future.
Tremendous performance has ensured a bright future for Noble
Energy.”
The Company sold quarterly volumes of 425 thousand barrels of
oil equivalent per day (MBoe/d) during the third quarter of 2016.
Total sales volumes were higher by 12 percent compared
to the third quarter of 2015, or 8 percent pro-forma for the
Rosetta Resources Inc. merger (completed in late July 2015).
Production volumes for the third quarter were 427 MBoe/d, which
differed from sales volumes due largely to the timing of liftings
in West Africa.
Liquids comprised 43 percent of third quarter 2016 volumes, with
29 percent being crude oil and condensate and 14 percent natural
gas liquids (NGLs). Natural gas accounted for the remaining
57 percent. Total oil volumes of 123 thousand barrels per day
were meaningfully above expectation and were primarily driven by
outperformance in the DJ Basin, Gulf of Mexico, and West Africa
business units. U.S. onshore sales volumes for the quarter
were 270 MBoe/d, up 5 percent compared to the third quarter of 2015
pro-forma. Global offshore sales volumes, including the Gulf of
Mexico and West Africa, totaled 103 MBoe/d, an increase of 21
percent compared to the third quarter of 2015. This increase
was primarily driven in the Gulf of Mexico by major project
contributions from Big Bend, Dantzler and Gunflint, all of which
came online in the last 12 months. Sales volumes in
Israel were 313 MMcfe/d, establishing a new quarterly record for
the Company.
Nearly all cost items for the quarter were below the Company’s
expectations. Lease operating expenses (LOE) were
significantly lower at $3.37 per barrel of oil equivalent (BOE), a
reduction of 14 percent compared to the third quarter of 2015
pro-forma. LOE per BOE benefited from strong third quarter
sales volumes and lower than normal workover activity.
Transportation and gathering expenses totaled $2.88 per BOE
while depreciation, depletion and amortization expenses for the
quarter were $15.87 per BOE. General and Administrative costs
for the quarter were $95 million, down $15 million from the third
quarter of last year pro-forma.
Exploration expense for the quarter was $125 million and
included $81 million of leasehold impairment due to the write-off
of certain leases in the Gulf of Mexico and the Falkland
Islands. These items were adjustments to the Company’s net
loss for the third quarter of 2016. Additional adjustments to
net loss included unrealized commodity derivative losses, primarily
related to existing crude oil hedging positions, and the tax effect
of the gain to be recorded on the sell-down of Tamar
working-interest.
The Company’s overall reported income tax rate for the quarter
was 49 percent. Following removal of the adjustment
items to the Company’s net loss, the adjusted effective tax rate
was 72 percent, reflecting current tax expense of $37 million and a
deferred benefit of $113 million.
Third quarter capital expenditures were $297 million,
substantially below expectation and reflecting continued
operational efficiencies across the business. Nearly 85
percent of the Company’s capital program was allocated to U.S.
onshore development activities. Included in Noble Energy’s
capital was $8 million related to capital expenditures for Noble
Midstream Partners LP (NBLX). Following the successful IPO of NBLX,
Noble Energy holds approximately 55 percent of NBLX’s limited
partnership units. Financial results for NBLX are fully
consolidated into Noble Energy’s financial statements, with
adjustments for the non-controlling interest (reflecting public
ownership of approximately 45%) made on the income statement and
balance sheet.
OPERATIONS UPDATEDJ BASINSales
volumes averaged 113 MBoe/d in the third quarter of 2016.
Liquids represented 68 percent of DJ Basin volumes (49 percent
crude oil and condensate and 19 percent NGLs) and 32 percent was
natural gas. Horizontal production represented 97 MBoe/d, up
6 percent from the third quarter of 2015. Combined volumes
for Wells Ranch and East Pony averaged 59 MBoe/d during the
quarter, up 11 percent from the third quarter of last
year.
Highlights include:
- Drilled 23 wells at an average lateral length of over 9,000
feet, with all of the wells drilled in the third quarter located in
Wells Ranch and East Pony. Set a new long lateral drilling
record (9,853 lateral feet) with a spud to rig release of 4.75
days.
- Commenced production on 43 wells, with an average lateral
length of nearly 6,000 feet. Thirteen of the wells were located in
East Pony, 22 wells in Wells Ranch, and 8 wells in the Mustang IDP
area. Each utilized slickwater completion fluid with an
average proppant concentration of over 1,600 pounds per lateral
foot.
- A major contributor to the Company’s oil volume growth for the
quarter were the East Pony wells which commenced production.
For those wells that reached cumulative production of at least 30
days, the East Pony wells averaged 147 Boe/d per 1,000 lateral
foot, with over 70 percent of the volumes being crude
oil.
- Closed on the acreage exchange transaction with PDC Energy in
September. The Company received approximately 11,700 net
acres in Wells Ranch (a 20 percent increase) in exchange for
approximately 13,500 net acres primarily in the Bronco area,
located southwest of Wells Ranch.
- The Company exited the quarter with 28 wells drilled but
uncompleted and two rigs operating.
TEXAS (EAGLE FORD AND PERMIAN)Sales volumes of
61 MBoe/d were achieved in the third quarter of 2016, an increase
of 11 percent from the third quarter of 2015 on a pro-forma
basis. Liquids represented 64 percent of the total (26
percent crude oil and condensate and 38 percent NGLs), while
natural gas accounted for the remaining 36 percent. Eagle
Ford production made up 84 percent of the volumes with the Permian
delivering the remaining 16 percent. During the third
quarter, 33 Eagle Ford wells were shut-in for up to one month to
perform offset fracs.
In the fourth quarter 2016, Noble Energy added two rigs to its
Texas development programs. One rig was added to each of the
Delaware and Eagle Ford areas, increasing the total Texas rig count
to 4 (2 in the Delaware and 2 in the Eagle Ford).
Highlights include:
- Drilled and commenced production on 6 wells (5 in the Eagle
Ford and 1 in the Delaware). The Permian well drilled
in the quarter was the Company’s first long lateral in the Delaware
Basin, which was 7,750 feet in lateral length.
- The Johnny Ringo 9 3H well, a Wolfcamp A well in the Delaware
Basin, with a lateral length of 4,691 feet, was completed using
slickwater and 2,500 pounds of proppant per lateral foot. The well
has achieved an IP-30 rate of 1,560 Boe/d (or 333 Boe/d per
thousand lateral feet) with 70 percent oil. On a normalized
basis, the well is outperforming the historical type
curve.
- Commenced production on 5 Lower Eagle Ford wells in the Gates
Ranch area. The wells had a lateral spacing of approximately
500 feet, an average lateral length of 5,860 feet, and an average
IP-30 of 3,128 Boe/d (or 534 Boe/d per thousand lateral
feet). The wells had proppant concentrations of approximately
2,000 pounds per lateral foot and cluster spacing of 40 feet.
On a normalized basis, these wells are also outperforming the
historical type curve.
- Closed on the sale of approximately 11,000 non-core acres in
the Eagle Ford for $68 million at the end of the quarter. The
acreage sold included small positions in La Salle, Atascosa, Live
Oak and Dimmit counties where we had not engaged in drilling
activity since the merger with Rosetta Resources Inc.
- There were 39 wells drilled but uncompleted (25 in the Eagle
Ford and 14 in the Delaware) at the end of the quarter.
MARCELLUS SHALESales volumes in the Marcellus
Shale averaged 557 million cubic feet of natural gas equivalent per
day (MMcfe/d) in the third quarter of 2016, an increase of 13
percent over the same quarter of last year. Natural gas
represented 89 percent of the volumes sold, with the majority of
the remainder composed of NGLs.
Highlights include:
- No wells were drilled or commenced production in the third
quarter.
- Completed 6 wells during the quarter and exited the quarter
with 73 wells drilled but uncompleted in the Joint Venture (Noble
Energy with 50 percent working interest). After separation of
the Joint Venture as announced on October 31, 2016, Noble Energy
held a 100 percent working interest in 20 drilled but uncompleted
wells.
- CONE Midstream Partners gathered gross volumes averaging
approximately 1.2 billion cubic feet per day during the quarter, an
increase of approximately 19 percent from the same quarter in the
previous year.
EASTERN MEDITERRANEANIsrael sales volumes
averaged 313 MMcfe/d, a record for the Company and an increase of 3
percent versus the third quarter of last year. The higher
volumes were primarily driven by greater displacement of coal for
natural gas in Israel’s power generation sector and growth from
industrial customers, as well as strong seasonal weather
demand.
Highlights include:
- Continued strong operations and reservoir performance at Tamar,
as the asset reached a cumulative 1 Tcf of gas sold since first
production in 2013.
- Executed agreement to sell 3 percent working interest in Tamar
in early July for $369 million pre-tax (implied $12.3 billion gross
valuation). Closing of the transaction is expected in the
middle part of the fourth quarter.
- Continued progress in marketing gas from the Leviathan
field. Executed gas sales contract to supply gross volumes of
up to 350 MMcf/d of natural gas (a total volume of 1.6 Tcf) from
Leviathan to NEPCO of Jordan for consumption in power production
facilities over a 15-year term. The gross contract revenues
are estimated to be approximately $10 billion.
- Continued front-end engineering and design for the Leviathan
production platform.
GULF OF MEXICOSales volumes in the Gulf of
Mexico averaged 29 MBoe/d, an increase of 143 percent compared to
the same quarter of last year. Crude oil and condensate
represented 84 percent of third quarter 2016 volumes, with 5
percent NGLs and 11 percent natural gas.
Highlights include:
- The Gunflint oil development commenced production in
mid-July. The field contributed 6 MBoe/d, net to Noble Energy
in the quarter, higher than expected as a result of strong field
ramp-up and additional open capacity on the Gulfstar One host
facility.
- The Company was named the operator of the Thunder Hawk
production facility in September. Thunder Hawk hosts
production from Big Bend and Dantzler.
WEST AFRICASales volumes in West Africa
averaged 74 MBoe/d, containing 32 percent crude oil and condensate,
9 percent NGLs, and 59 percent natural gas. Production
volumes for the third quarter were 76 MBoe/d, higher than sales
volumes due largely to the timing of liftings.
Highlights include:
- Commenced production in July from the non-operated B3
compression platform at the Alba field. A peak gross gas
production rate of 950 MMcf/d was the highest daily rate achieved
in the last 4 years.
GUIDANCEDriven primarily by accelerated onshore
drilling programs, Noble Energy has raised fourth quarter capital
expenditures to be $425 to $475 million. More than 70 percent
of the fourth quarter spend will be allocated to the U.S. onshore
assets, where the Company is now running 6 rigs, including 2 each
in the Delaware, DJ Basin, and Eagle Ford. The remaining
capital is primarily related to development drilling for a new well
at Tamar in Israel, which will provide additional production
reliability.
Noble Energy has maintained its prior fourth quarter guidance of
between 400 and 410 MBoe/d, with an increase in the oil
percentage. This reflects underlying enhanced production from
the DJ and Gulf of Mexico assets versus prior expectation, as well
as the impact of certain asset divestitures not previously
anticipated. Fourth quarter guidance reflects lower volumes
of approximately 7 MBoe/d as the result of the following:
- The Marcellus JV separation (7 MBoe/d lower, assuming a
November 2016 closing)
- A non-core asset sale in the Eagle Ford (2 MBoe/d lower)
- Timing of the Tamar transaction (2 MBoe/d higher).
The Company lowered LOE and G&A guidance for the fourth
quarter, as reflected in the supplemental slides for the quarterly
webcast which are available on the Company’s website.
(1) A Non-GAAP measure, see attached Reconciliation
Schedules
WEBCAST INFORMATION
Noble Energy, Inc. will host a live audio
webcast at 8:00 a.m. Central time tomorrow, November 2, 2016.
The webcast link is accessible on the ‘Investors’ page at
www.nobleenergyinc.com. A replay will be available on the
website.
Noble Energy (NYSE:NBL) is an independent oil
and natural gas exploration and production company with a
diversified high-quality portfolio of both U.S. unconventional and
global offshore conventional assets spanning three
continents. Founded more than 80 years ago, the company is
committed to safely and responsibly delivering our purpose:
Energizing the World, Bettering People’s Lives®. For more
information, visit www.nobleenergyinc.com.
This news release contains certain “forward-looking statements”
within the meaning of federal securities law. Words such as
“anticipates”, “believes”, “expects”, “intends”, “will”, “should”,
“may”, “estimates”, and similar expressions may be used to identify
forward-looking statements. Forward-looking statements are
not statements of historical fact and reflect Noble Energy’s
current views about future events. They may include estimates
of oil and natural gas reserves, estimates of future production,
assumptions regarding future oil and natural gas pricing, planned
drilling activity, future results of operations, projected cash
flow and liquidity, business strategy and other plans and
objectives for future operations. No assurances can be given
that the forward-looking statements contained in this news release
will occur as projected and actual results may differ materially
from those projected. Forward-looking statements are based on
current expectations, estimates and assumptions that involve a
number of risks and uncertainties that could cause actual results
to differ materially from those projected. These risks
include, without limitation, the volatility in commodity prices for
crude oil and natural gas, the presence or recoverability of
estimated reserves, the ability to replace reserves, environmental
risks, drilling and operating risks, exploration and development
risks, competition, government regulation or other actions, the
ability of management to execute its plans to meet its goals and
other risks inherent in Noble Energy’s business that are discussed
in its most recent annual report on Form 10-K and in other reports
on file with the Securities and Exchange Commission (“SEC”). These
reports are also available from Noble Energy’s offices or website,
http://www.nobleenergyinc.com. Forward-looking statements are
based on the estimates and opinions of management at the time the
statements are made. Noble Energy does not assume any
obligation to update forward-looking statements should
circumstances, management’s estimates, or opinions change.
This news release also contains certain non-GAAP measures of
financial performance that management believes are good tools for
internal use and the investment community in evaluating Noble
Energy’s overall financial performance. These non-GAAP
measures are broadly used to value and compare companies in the
crude oil and natural gas industry. Please see the attached
schedules for reconciliations of the differences between any
historical non-GAAP measures used in this news release and the most
directly comparable GAAP financial measures.
Noble Energy,
Inc.Summary Statement of
Operations(in millions, except per share amounts,
unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Crude Oil and Condensate |
$ |
461 |
|
|
$ |
438 |
|
|
$ |
1,291 |
|
|
$ |
1,352 |
|
Natural Gas |
347 |
|
|
293 |
|
|
916 |
|
|
785 |
|
Natural Gas Liquids (1) |
74 |
|
|
52 |
|
|
204 |
|
|
127 |
|
Income from Equity Method
Investees |
28 |
|
|
36 |
|
|
70 |
|
|
60 |
|
Total Revenues |
910 |
|
|
819 |
|
|
2,481 |
|
|
2,324 |
|
Operating
Expenses |
|
|
|
|
|
|
|
Lease Operating Expense |
131 |
|
|
133 |
|
|
412 |
|
|
419 |
|
Production and Ad Valorem
Taxes |
30 |
|
|
28 |
|
|
73 |
|
|
89 |
|
Transportation and Gathering
Expense (1) |
113 |
|
|
86 |
|
|
335 |
|
|
207 |
|
Marketing and Processing Expense,
Net |
20 |
|
|
10 |
|
|
58 |
|
|
25 |
|
Exploration Expense |
125 |
|
|
203 |
|
|
376 |
|
|
308 |
|
Depreciation, Depletion and
Amortization |
621 |
|
|
539 |
|
|
1,859 |
|
|
1,444 |
|
General and Administrative |
95 |
|
|
109 |
|
|
293 |
|
|
308 |
|
Other Operating Expense, Net |
25 |
|
|
178 |
|
|
8 |
|
|
285 |
|
Total Operating Expenses |
1,160 |
|
|
1,286 |
|
|
3,414 |
|
|
3,085 |
|
Operating
Loss |
(250 |
) |
|
(467 |
) |
|
(933 |
) |
|
(761 |
) |
Other Expense
(Income) |
|
|
|
|
|
|
|
(Gain) Loss on Commodity Derivative
Instruments |
(55 |
) |
|
(267 |
) |
|
53 |
|
|
(331 |
) |
Interest, Net of Amount
Capitalized |
86 |
|
|
71 |
|
|
242 |
|
|
183 |
|
Other Non-Operating (Income)
Expense, Net |
(1 |
) |
|
(12 |
) |
|
3 |
|
|
(20 |
) |
Total Other Expense (Income) |
30 |
|
|
(208 |
) |
|
298 |
|
|
(168 |
) |
Loss Before Income
Taxes |
(280 |
) |
|
(259 |
) |
|
(1,231 |
) |
|
(593 |
) |
Income Tax (Benefit)
Provision |
(137 |
) |
|
24 |
|
|
(486 |
) |
|
(180 |
) |
Net Loss Including
Noncontrolling Interests |
$ |
(143 |
) |
|
$ |
(283 |
) |
|
$ |
(745 |
) |
|
$ |
(413 |
) |
Less: Net Income
Attributable to Noncontrolling Interests (2) |
1 |
|
|
— |
|
|
1 |
|
|
— |
|
Net Loss
Attributable to Noble Energy |
$ |
(144 |
) |
|
$ |
(283 |
) |
|
$ |
(746 |
) |
|
$ |
(413 |
) |
|
|
|
|
|
|
|
|
Net Loss
Attributable to Noble Energy Per Share of Common
Stock |
|
|
|
|
|
|
|
Loss Per Share,
Basic |
$ |
(0.33 |
) |
|
$ |
(0.67 |
) |
|
$ |
(1.73 |
) |
|
$ |
(1.05 |
) |
Loss Per Share,
Diluted |
$ |
(0.33 |
) |
|
$ |
(0.67 |
) |
|
$ |
(1.73 |
) |
|
$ |
(1.05 |
) |
|
|
|
|
|
|
|
|
Weighted Average Number of
Shares Outstanding |
|
|
|
|
|
|
|
Basic |
430 |
|
|
420 |
|
|
430 |
|
|
392 |
|
Diluted |
430 |
|
|
420 |
|
|
430 |
|
|
392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Certain of our
revenue received from purchasers was historically presented with
deductions for transportation, gathering, fractionation
orprocessing costs. Beginning in 2016, we have changed our
presentation to no longer include these expenses as deductions from
revenue.These costs are now included within transportation and
gathering expense and prior year amounts have been reclassified to
conform to thecurrent presentation. |
|
(2) The Company
consolidates Noble Midstream Partners LP (NBLX), a publicly traded
subsidiary of Noble Energy, as a variable interestentity for
financial reporting purposes. The public's ownership interest in
NBLX is reflected as a noncontrolling interest in the
financialstatements. |
|
These financial
statements should be read in conjunction with the financial
statements and the accompanying notes and other informationincluded
in Noble Energy's Quarterly Report on Form 10-Q to be filed with
the Securities and Exchange Commission on November 2, 2016. |
|
On July 20, 2015, we
completed the merger with Rosetta Resources Inc. (Rosetta or
Rosetta Merger) and the results of operations attributableto
Rosetta are included in our consolidated statement of operations
beginning on July 21, 2015. The results of these operations
attributable toRosetta will affect the comparability of our
financial results to prior periods. |
Schedule 2Noble Energy,
Inc.Condensed Balance Sheets(in
millions, unaudited)
|
September 30,2016 |
|
December 31,2015 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and Cash Equivalents |
$ |
1,819 |
|
|
$ |
1,028 |
|
Accounts Receivable, Net |
486 |
|
|
450 |
|
Commodity Derivative Assets |
120 |
|
|
582 |
|
Other Current Assets |
352 |
|
|
216 |
|
Total Current Assets |
2,777 |
|
|
2,276 |
|
Net Property, Plant and
Equipment |
19,105 |
|
|
21,300 |
|
Other Noncurrent Assets |
587 |
|
|
620 |
|
Total Assets |
$ |
22,469 |
|
|
$ |
24,196 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Current Liabilities |
|
|
|
Accounts Payable - Trade |
$ |
786 |
|
|
$ |
1,128 |
|
Other Current Liabilities |
742 |
|
|
677 |
|
Total Current Liabilities |
1,528 |
|
|
1,805 |
|
Long-Term Debt |
7,854 |
|
|
7,976 |
|
Deferred Income Taxes |
2,103 |
|
|
2,826 |
|
Other Noncurrent Liabilities |
1,139 |
|
|
1,219 |
|
Total Liabilities |
12,624 |
|
|
13,826 |
|
Total Shareholders' Equity |
9,545 |
|
|
10,370 |
|
Noncontrolling Interests (1) |
300 |
|
|
— |
|
Total Equity |
9,845 |
|
|
10,370 |
|
Total Liabilities and Equity |
$ |
22,469 |
|
|
$ |
24,196 |
|
|
(1) The Company
consolidates Noble Midstream Partners LP (NBLX), a publicly traded
subsidiary of Noble Energy, as a variable interestentity for
financial reporting purposes. The public's ownership interest in
NBLX is reflected as a noncontrolling interest in the
financialstatements. |
|
These financial statements
should be read in conjunction with the financial statements and the
accompanying notes and other informationincluded in Noble Energy's
Quarterly Report on Form 10-Q to be filed with the Securities and
Exchange Commission on November 2, 2016. |
Schedule 3Noble Energy,
Inc.Condensed Statement of Cash
Flows(in millions, unaudited)
|
Three MonthsEnded September 30, |
|
Nine MonthsEnded September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Cash Flows From
Operating Activities |
|
|
|
|
|
|
|
Net Loss(1) |
$ |
(143 |
) |
|
$ |
(283 |
) |
|
$ |
(745 |
) |
|
$ |
(413 |
) |
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operating Activities |
|
|
|
|
|
|
|
Depreciation, Depletion and
Amortization |
621 |
|
|
539 |
|
|
1,859 |
|
|
1,444 |
|
Asset Impairments |
— |
|
|
— |
|
|
— |
|
|
43 |
|
Dry Hole Cost |
(9 |
) |
|
135 |
|
|
105 |
|
|
154 |
|
Undeveloped Leasehold
Impairment |
81 |
|
|
— |
|
|
81 |
|
|
— |
|
Gain on Extinguishment of Debt |
— |
|
|
— |
|
|
(80 |
) |
|
— |
|
Loss on Asset Due to Terminated
Contract |
(3 |
) |
|
— |
|
|
44 |
|
|
— |
|
Deferred Income Tax (Benefit)
Provision |
(285 |
) |
|
68 |
|
|
(699 |
) |
|
(244 |
) |
Loss (Gain) on Commodity Derivative
Instruments |
(55 |
) |
|
(267 |
) |
|
53 |
|
|
(331 |
) |
Net Cash Received in Settlement of
Commodity Derivative Instruments |
132 |
|
|
284 |
|
|
454 |
|
|
683 |
|
Stock Based Compensation |
21 |
|
|
31 |
|
|
61 |
|
|
69 |
|
Non-cash Pension Termination
Expense |
— |
|
|
60 |
|
|
— |
|
|
81 |
|
Other Adjustments for Noncash Items
Included in Income |
44 |
|
|
63 |
|
|
92 |
|
|
74 |
|
Net Changes in Working Capital |
210 |
|
|
(110 |
) |
|
(171 |
) |
|
(74 |
) |
Net Cash
Provided by Operating Activities |
614 |
|
|
520 |
|
|
1,054 |
|
|
1,486 |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
|
|
Additions to Property, Plant and
Equipment |
(352 |
) |
|
(621 |
) |
|
(1,164 |
) |
|
(2,519 |
) |
Cash Acquired in Rosetta
Merger |
— |
|
|
61 |
|
|
— |
|
|
61 |
|
Additions to Equity Method
Investments |
(2 |
) |
|
(21 |
) |
|
(8 |
) |
|
(86 |
) |
Proceeds from Divestitures and
Other |
19 |
|
|
— |
|
|
786 |
|
|
151 |
|
Net Cash Used
in Investing Activities |
(335 |
) |
|
(581 |
) |
|
(386 |
) |
|
(2,393 |
) |
Cash Flows From
Financing Activities |
|
|
|
|
|
|
|
Dividends Paid, Common Stock |
(43 |
) |
|
(80 |
) |
|
(129 |
) |
|
(214 |
) |
Proceeds from Issuance of Noble
Energy Common Stock, Net of Offering Costs |
— |
|
|
— |
|
|
— |
|
|
1,112 |
|
Proceeds from Issuance of Noble
Midstream Common Units, Net of Offering Costs |
299 |
|
|
— |
|
|
299 |
|
|
— |
|
Repayment of Credit Facility |
— |
|
|
(74 |
) |
|
— |
|
|
(74 |
) |
(Repayment) Proceeds from Long Term
Debt, Net |
— |
|
|
(12 |
) |
|
17 |
|
|
(12 |
) |
Repayment of Capital Lease
Obligation |
(12 |
) |
|
(20 |
) |
|
(39 |
) |
|
(49 |
) |
Other |
(4 |
) |
|
(3 |
) |
|
(25 |
) |
|
(11 |
) |
Net Cash
Provided by (Used In) Financing Activities |
240 |
|
|
(189 |
) |
|
123 |
|
|
752 |
|
Increase
(Decrease) in Cash and Cash Equivalents |
519 |
|
|
(250 |
) |
|
791 |
|
|
(155 |
) |
Cash and Cash
Equivalents at Beginning of Period |
1,300 |
|
|
1,278 |
|
|
1,028 |
|
|
1,183 |
|
Cash and Cash
Equivalents at End of Period |
$ |
1,819 |
|
|
$ |
1,028 |
|
|
$ |
1,819 |
|
|
$ |
1,028 |
|
|
(1)
The Company consolidates Noble Midstream Partners LP (NBLX),
a publicly traded subsidiary of Noble Energy, as a variable
interestentity for financial reporting purposes. For the three and
nine months ended September 30, 2016, Net Loss includes Net Income
Attributableto Noncontrolling Interests in NBLX. |
|
These
financial statements should be read in conjunction with the
financial statements and the accompanying notes and other
informationincluded in Noble Energy's Quarterly Report on Form 10-Q
to be filed with the Securities and Exchange Commission on November
2, 2016. |
|
On July
20, 2015, we completed the merger with Rosetta and the associated
cash flows are included in our operations beginning on July
21,2015. The results of these cash flows attributable to
Rosetta will affect the comparability of our results to prior
periods. |
Schedule 4Noble Energy,
Inc.Volume and Price
Statistics(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Sales
Volumes |
2016 |
|
2015 |
|
2016 |
|
2015 |
Crude Oil and
Condensate (MBbl/d) |
|
|
|
|
|
|
|
United States |
99 |
|
|
83 |
|
|
99 |
|
|
73 |
|
Equatorial Guinea |
22 |
|
|
27 |
|
|
25 |
|
|
29 |
|
Other International |
— |
|
|
— |
|
|
— |
|
|
1 |
|
Total consolidated operations |
121 |
|
|
110 |
|
|
124 |
|
|
103 |
|
Equity method investee - Equatorial
Guinea |
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
Total |
123 |
|
|
112 |
|
|
126 |
|
|
105 |
|
Natural Gas
Liquids (MBbl/d) |
|
|
|
|
|
|
|
United States |
55 |
|
|
49 |
|
|
56 |
|
|
34 |
|
Equity method investee - Equatorial
Guinea |
7 |
|
|
6 |
|
|
5 |
|
|
5 |
|
Total |
62 |
|
|
55 |
|
|
61 |
|
|
39 |
|
Natural Gas
(MMcf/d) |
|
|
|
|
|
|
|
United States |
874 |
|
|
741 |
|
|
902 |
|
|
658 |
|
Israel |
310 |
|
|
303 |
|
|
284 |
|
|
254 |
|
Equatorial Guinea |
261 |
|
|
231 |
|
|
230 |
|
|
221 |
|
Total |
1,445 |
|
|
1,275 |
|
|
1,416 |
|
|
1,133 |
|
Total Sales
Volumes (MBoe/d) |
|
|
|
|
|
|
|
United States |
299 |
|
|
255 |
|
|
304 |
|
|
217 |
|
Israel |
52 |
|
|
51 |
|
|
48 |
|
|
43 |
|
Equatorial Guinea |
65 |
|
|
65 |
|
|
64 |
|
|
66 |
|
Other International |
— |
|
|
— |
|
|
— |
|
|
1 |
|
Total consolidated operations |
416 |
|
|
371 |
|
|
416 |
|
|
327 |
|
Equity method investee - Equatorial
Guinea |
9 |
|
|
8 |
|
|
7 |
|
|
6 |
|
Total sales volumes (MBoe/d) |
425 |
|
|
379 |
|
|
423 |
|
|
333 |
|
|
|
|
|
|
|
|
|
Total sales volumes (MBoe) |
39,095 |
|
|
34,907 |
|
|
115,816 |
|
|
90,804 |
|
|
|
|
|
|
|
|
|
Price Statistics -
Realized Prices |
|
|
|
|
|
|
|
Crude Oil and
Condensate ($/Bbl)(1) |
|
|
|
|
|
|
|
United States |
$ |
41.23 |
|
|
$ |
42.42 |
|
|
$ |
37.23 |
|
|
$ |
46.02 |
|
Equatorial Guinea |
43.73 |
|
|
45.99 |
|
|
40.74 |
|
|
52.15 |
|
Other International |
— |
|
|
— |
|
|
— |
|
|
55.52 |
|
Total |
$ |
41.67 |
|
|
$ |
43.30 |
|
|
$ |
37.94 |
|
|
$ |
47.79 |
|
Natural Gas
Liquids ($/Bbl)(1) |
|
|
|
|
|
|
|
United States |
$ |
14.70 |
|
|
$ |
11.37 |
|
|
$ |
13.38 |
|
|
$ |
13.77 |
|
Natural Gas
($/Mcf)(1) |
|
|
|
|
|
|
|
United States |
$ |
2.38 |
|
|
$ |
2.01 |
|
|
$ |
2.00 |
|
|
$ |
2.20 |
|
Israel |
5.22 |
|
|
5.39 |
|
|
5.19 |
|
|
5.39 |
|
Equatorial Guinea |
0.27 |
|
|
0.27 |
|
|
0.27 |
|
|
0.27 |
|
Total |
$ |
2.61 |
|
|
$ |
2.50 |
|
|
$ |
2.36 |
|
|
$ |
2.54 |
|
|
(1) Average realized
prices do not include gains or losses on commodity derivative
instruments. |
|
On July 20, 2015, we
completed the merger with Rosetta and the associated volumes and
price statistics are included in our operationsbeginning on July
21, 2015. The results of these volumes and prices attributable
to Rosetta will affect the comparability of our results to
priorperiods. |
Schedule 5Noble
Energy, Inc.Reconciliation of Net Loss
Attributable to Noble Energy (GAAP) toAdjusted
(Loss) Income Attributable to Noble Energy
(Non-GAAP)(in millions, except per share amounts,
unaudited)
Adjusted (loss) income attributable to Noble Energy (Non-GAAP)
should not be considered an alternative to, or more meaningful
than, net loss attributable to Noble Energy (GAAP) or any other
measure as reported in accordance with GAAP. Our management
believes, and certain investors may find, that adjusted (loss)
income attributable to Noble Energy is beneficial in evaluating our
operating and financial performance because it eliminates the
impact of certain noncash and/or nonrecurring items that management
does not consider to be indicative of our performance from period
to period. We believe this Non-GAAP measure is used by analysts and
investors to evaluate and compare our operating and financial
performance across periods. As a performance measure, adjusted
(loss) income attributable to Noble Energy may be useful for
comparison of earnings to forecasts prepared by analysts and other
third parties. However, our presentation of adjusted (loss) income
attributable to Noble Energy may not be comparable to similar
measures of other companies in our industry.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Loss
Attributable to Noble Energy (GAAP) |
$ |
(144 |
) |
|
$ |
(283 |
) |
|
$ |
(746 |
) |
|
$ |
(413 |
) |
Adjustments to Net Loss |
|
|
|
|
|
|
|
Loss on Commodity Derivative
Instruments, Net of Cash Settlements |
77 |
|
|
17 |
|
|
507 |
|
|
352 |
|
Loss on Asset Due to Terminated
Contract |
(3 |
) |
|
— |
|
|
44 |
|
|
— |
|
Purchase Price Allocation
Adjustment [1] |
— |
|
|
— |
|
|
(25 |
) |
|
— |
|
Gain on Debt Extinguishment
[2] |
— |
|
|
— |
|
|
(80 |
) |
|
— |
|
Well Cost Related to Expiration of
Exploration License [3] |
— |
|
|
— |
|
|
26 |
|
|
— |
|
Loss on Divestitures |
— |
|
|
— |
|
|
23 |
|
|
— |
|
Undeveloped Leasehold Impairment
[4] |
81 |
|
|
— |
|
|
81 |
|
|
— |
|
Other Adjustments
[5] |
20 |
|
|
160 |
|
|
43 |
|
|
251 |
|
Total Adjustments Before Tax |
175 |
|
|
177 |
|
|
619 |
|
|
603 |
|
Current Income Tax Effect of
Adjustments [6] |
111 |
|
|
(11 |
) |
|
111 |
|
|
(20 |
) |
Deferred Income Tax Effect of
Adjustments [6] |
(172 |
) |
|
27 |
|
|
(345 |
) |
|
(149 |
) |
Adjustments to Net Loss, After
Tax |
$ |
114 |
|
|
$ |
193 |
|
|
$ |
385 |
|
|
$ |
434 |
|
Adjusted (Loss) Income Attributable to
Noble Energy (Non-GAAP) |
$ |
(30 |
) |
|
$ |
(90 |
) |
|
$ |
(361 |
) |
|
$ |
21 |
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Noble Energy Per Share,
Diluted (GAAP) |
$ |
(0.33 |
) |
|
$ |
(0.67 |
) |
|
$ |
(1.73 |
) |
|
$ |
(1.05 |
) |
Adjusted (Loss) Income Attributable to Noble
Energy Per Share, Diluted (Non-GAAP) |
$ |
(0.07 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.84 |
) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding,
Diluted |
430 |
|
|
420 |
|
|
430 |
|
|
395 |
|
|
NOTE: On July 20,
2015, we completed the merger with Rosetta and the results of
operations attributable to Rosetta are included in our consolidated
statement of operations beginning on July 21, 2015. The results of
these operations attributable to Rosetta will affect the
comparability of our financial results to prior periods. |
|
[1] Amount relates
to a tax adjustment recorded to the purchase price allocation
related to the Rosetta Merger. |
|
[2] Amount
relates to the early tendering of senior notes assumed in the
Rosetta Merger. |
|
[3] Amount
relates to the license from our 2011 Dolphin discovery in Eastern
Mediterranean. |
|
[4] Amount
relates to the write-off of several leases in deepwater Gulf of
Mexico and offshore Falkland Islands of $56 million and $25
million, respectively. |
|
[5] Amount for
2016 primarily relates to loss on sale of other assets, stacked
drilling rig charges, and deferred compensation plan. Amount for
the three months ended September 30, 2015 primarily relates to
Rosetta merger expenses of $71 million, pension plan expense of $67
million, corporate restructuring of $21 million, stacked drilling
rig of $13 million, by offset by deferred compensation plan of $12
million. Amount for the nine months ended September 30, 2015
primarily relates to pension plan expense of $88 million, Rosetta
merger expenses of $73 million, asset impairments of $43 million,
corporate restructuring of $39 million, stacked drilling rig of $20
million, offset by deferred compensation plan of $12 million. |
|
[6] Amount
represents the income tax effect of adjustments, determined for
each major tax jurisdiction for each adjusting item, including the
impact of timing and magnitude of divestiture activities (such as
the recognition of a gain on our 3% Tamar divestiture in Eastern
Mediterranean) and the change in the indefinite reinvestment
assertion related to accumulated undistributed earnings of foreign
subsidiaries. |
Schedule 6Noble Energy,
Inc.Reconciliation of Net Loss Attributable to
Noble Energy (GAAP) to Adjusted (Loss) Income Attributable to Noble
Energy (Non-GAAP) and Adjusted EBITDAX
(Non-GAAP)(in millions, unaudited)
Adjusted Earnings Before Interest Expense, Income Taxes,
Depreciation, Depletion and Amortization, and Exploration Expenses
(Adjusted EBITDAX) (Non-GAAP) should not be considered an
alternative to, or more meaningful than, net loss attributable to
Noble Energy (GAAP) or any other measure as reported in accordance
with GAAP. Our management believes, and certain investors may find,
that Adjusted EBITDAX is beneficial in evaluating our operating and
financial performance because it eliminates the impact of certain
noncash and/or nonrecurring items that management does not consider
to be indicative of our performance from period to period. We
believe these Non-GAAP measures are used by analysts and investors
to evaluate and compare our operating and financial performance
across periods. As a performance measure. Adjusted EBITDAX may be
useful for comparison of earnings to forecasts prepared by analysts
and other third parties. However, our presentation of Adjusted
EBITDAX may not be comparable to similar measures of other
companies in our industry.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Loss Attributable to Noble Energy
(GAAP) |
$ |
(144 |
) |
|
$ |
(283 |
) |
|
$ |
(746 |
) |
|
$ |
(413 |
) |
Adjustments to Net Loss,
After Tax [1] |
114 |
|
|
193 |
|
|
385 |
|
|
434 |
|
Adjusted (Loss) Income Attributable to
Noble Energy (Non-GAAP) |
(30 |
) |
|
(90 |
) |
|
(361 |
) |
|
21 |
|
|
|
|
|
|
|
|
|
Adjustments to Adjusted Net Loss (Income)
Attributable to Noble Energy |
|
|
|
|
|
|
|
Depreciation, Depletion, and
Amortization |
621 |
|
|
539 |
|
|
1,859 |
|
|
1,444 |
|
Exploration Expense
[2] |
44 |
|
|
203 |
|
|
269 |
|
|
308 |
|
Interest, Net of Amount
Capitalized |
86 |
|
|
71 |
|
|
242 |
|
|
183 |
|
Current Income Tax Expense
[3] |
37 |
|
|
(34 |
) |
|
102 |
|
|
84 |
|
Deferred Income Tax Benefit
[3] |
(113 |
) |
|
42 |
|
|
(354 |
) |
|
(95 |
) |
Adjusted EBITDAX
(Non-GAAP) |
$ |
645 |
|
|
$ |
731 |
|
|
$ |
1,757 |
|
|
$ |
1,945 |
|
|
NOTE: On July 20, 2015, we completed the
merger with Rosetta and the results of operations attributable to
Rosetta are included in our consolidated income statement of
operations beginning on July 21, 2015. The results of these
operations attributable to Rosetta will affect the comparability of
our financial results to prior periods. |
|
[1] See Schedule 5: Reconciliation of Net
Loss Attributable to Noble Energy (GAAP) to Adjusted (Loss) Income
Attributable to Noble Energy (Non-GAAP) for calculation. |
|
[2] Represents remaining Exploration Expense
after reversal of Adjustments to Net Loss, After Tax, above. |
|
[3] Represents remaining Income Taxes after
reversal of Adjustments to Net Loss, After Tax, above. |
Capital Expenditures(in
millions, unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Capital Expenditures (Accrual Based) |
$ |
297 |
|
|
|
$ |
664 |
|
|
|
$ |
935 |
|
|
|
$ |
2,325 |
|
Increase in Capital Lease Obligations
[4] |
5 |
|
|
29 |
|
|
5 |
|
|
60 |
|
Total Capital Expenditures (Accrual
Based) [5] |
$ |
302 |
|
|
$ |
693 |
|
|
$ |
940 |
|
|
$ |
2,385 |
|
[4] |
Represents estimated
construction in progress to date on US operating assets and
corporate buildings. |
[5] |
Includes capital
expenditures from our publicly traded subsidiary, Noble Midstream
Partners LP, of $8 million for the three months ended September 30,
2016. |
Investor Contacts
Brad Whitmarsh
(281) 943-1670
Brad.Whitmarsh@nblenergy.com
Megan Repine
(832) 639-7380
Megan.Repine@nblenergy.com
Media Contacts:
Reba Reid
(713) 412-8441
media@nblenergy.com
Paula Beasley
(281) 876-6133
media@nblenergy.com
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