Noble Energy, Inc. (NYSE:NBL) (“Noble Energy” or “the Company”)
announced today results for the fourth quarter of 2016, including a
reported net loss attributable to Noble Energy of $252 million, or
$0.59 per diluted share. The adjusted
income
(1) attributable to Noble Energy for the
quarter was $113 million, or $0.26 per diluted share, which
excludes the impact of certain items typically not considered by
analysts in formulating estimates. Adjusted
EBITDAX
(1) was $706 million.
Total Company sales volumes for the fourth quarter
of 2016 were 410 thousand barrels of oil equivalent per day
(MBoe/d). Liquids comprised 46 percent (32 percent crude oil
and condensate and 14 percent natural gas liquids) of fourth
quarter 2016 volumes, with natural gas the remaining 54
percent. Total Company oil volumes were above expectations at
131 thousand barrels of oil per day (MBbl/d), with the
outperformance driven by the DJ Basin and Gulf of Mexico.
U.S. sales volumes for the quarter totaled 287 MBoe/d, while
International sales volumes were 123 MBoe/d. Total sales
volumes were higher than produced volumes by 4 MBbl/d due to the
timing of liquids liftings in Equatorial Guinea.
David L. Stover, Noble Energy’s Chairman, President
and CEO, commented, “2016 was an impactful year for Noble Energy,
highlighted by strong operational and financial performance and
importantly, strategic portfolio accomplishments that generate
substantial long-term value. The fourth quarter was no
exception, with the dissolution of our Marcellus joint venture and
the announcement of a bolt-on acreage addition in the Delaware
Basin. Fourth quarter volumes were at the high end of
expectations while production expenses were below. In total,
we outperformed our original 2016 plans by 10 million barrels of
oil equivalent, with significantly less capital. We are
positioned for a tremendous year in 2017 as we accelerate U.S.
onshore activity and move forward with the development of
Leviathan.”
Full Year 2016 Highlights:
- Achieved record full year sales volumes of 420 MBoe/d, up 18
percent from 2015 reported volumes. U.S. onshore volumes were
up 22 percent and offshore was higher by 12 percent.
- Organic capital expenditures of $1.3 billion were below
guidance.
- Received more than $1.5 billion in proceeds from asset
divestitures, including proceeds from Noble Midstream Partners LP’s
initial public offering.
- Reported a net loss attributable to Noble Energy of $998
million, or $2.32 per diluted share. The adjusted
loss(1) attributable to Noble Energy was
$248 million, or $0.58 per diluted share. Adjusted
EBITDAX(1) was $2.5 billion.
Fourth quarter lease operating expenses (LOE) were
significantly lower than expectation at $3.44 per barrel of oil
equivalent (BOE), a reduction of 9 percent compared to the fourth
quarter of 2015. This was led by lower unit LOE costs within
the Gulf of Mexico and DJ Basin. Transportation and gathering
expenses totaled $3.41 per BOE, reflecting higher oil volumes
transported through pipelines in the DJ Basin, which also
contributed to a lower oil differential in the quarter.
Depreciation, depletion and amortization expenses for the quarter
were $15.78 per BOE, down as a result of significant reserve
additions in U.S. onshore areas. General and Administrative
costs for the quarter were $106 million. Production taxes in
the fourth quarter of 2016 were below expectations due to an
adjustment to accruals for ad valorem and severance taxes.
The tax provision for the fourth quarter includes a
large deferred tax benefit as a result of certain non-cash
impairments and lower future corporate tax rate in Israel, and a
true-up for full year tax rate.
Fourth quarter adjustments to net loss attributable
to Noble Energy included an accounting gain from the divestiture of
a 3.5 percent working interest in the producing Tamar asset in
Israel. The Company also recorded non-cash impairments of
$484 million, which were primarily related to certain West Africa
exploration costs recorded to dry hole expenses. In addition,
approximately $92 million was impaired primarily for alternative
development concept costs for Leviathan which are no longer part of
the Company’s plan. The Company also had unrealized commodity
derivative losses of $201 million, resulting from the value change
of existing crude oil and natural gas hedge positions.
OPERATIONS UPDATE
DJ BASINSales volumes averaged 112
MBoe/d in the fourth quarter of 2016. Liquids represented 68
percent of DJ Basin volumes (50 percent crude oil and condensate
and 18 percent NGLs) and 32 percent was natural gas.
Horizontal production totaled 94 MBoe/d. Combined
volumes for Wells Ranch and East Pony averaged 60 MBoe/d during the
quarter.
Highlights include:
- Drilled 33 wells at an average lateral length of over 5,600
feet, with nearly all of the wells drilled in the fourth quarter
located in East Pony.
- Commenced production on 16 wells, with an average lateral
length of over 8,400 feet. Five of the wells were located in
Wells Ranch and 11 were in East Pony. Each well utilized
slickwater completion fluid, and the average proppant concentration
was over 2,000 pounds per lateral foot.
- Nineteen additional wells within Wells Ranch, all of which
commenced production in the third quarter of 2016, reached peak
production. The wells, with an average lateral length of
6,500 feet, utilized an average proppant concentration over 1,800
pounds per foot, and delivered an actual IP-90 of 750 Boe/d (60
percent oil). When normalized to a 9,500’ lateral length, the
wells are performing more than 50 percent above the Wells Ranch one
million barrel of oil equivalent (MMBoe) type curve.
- The Company exited 2016 with two operated rigs and 41 wells
drilled but uncompleted.
DELAWARE BASINSales volumes for
the fourth quarter averaged 10 MBoe/d, an increase of 23 percent
versus the fourth quarter of 2015. Liquids represented 83
percent of the total (crude oil and condensate represented 64
percent and NGLs were 19 percent), while natural gas accounted for
17 percent.
Highlights include:
- Drilled four wells within the quarter, with an average lateral
length of approximately 7,200 feet. Average drilling time was
two days shorter while the average lateral length was over 30
percent longer than wells drilled in the first three quarters of
2016.
- Commenced production on five wells in the fourth quarter.
The wells had an average lateral length of 4,860 feet. Three
wells were completed with 3,000 pounds per lateral foot, one well
with 4,200 pounds per lateral foot and one well with 5,000 pounds
per lateral foot. Four of the wells were landed in the
Wolfcamp A zone, and had an average IP-30 rate of 1,140 Boe/d, or
268 Boe/d per thousand lateral feet. On average and when
normalized to 7,500 lateral feet, the wells are performing in line
with the 1.2 MMBoe type curve and consistent with Company
expectations after early production. The Company’s first
Wolfcamp B well was completed with 3,000 pounds of proppant per
lateral foot and achieved an IP-30 rate of 1,003 Boe/d, or 140
Boe/d per thousand lateral feet. The well is performing consistent
with expectations and the 1.1 MMBoe type curve, when normalized for
lateral length.
- The Company acquired 7,200 acres in and around its existing
Southern Delaware acreage position. The bolt-on acquisitions
included 2,400 Boe/d production, 150 incremental gross well
locations, and also increased the working interest and lateral
lengths for 325 existing well locations. The transaction
closed in early January 2017.
- The Company added two rigs in the quarter, exiting the year
with three operated rigs. There were 12 wells drilled but
uncompleted at the end of 2016.
EAGLE FORDSales volumes averaged
46 MBoe/d during the fourth quarter. Liquids represented 59
percent of the total (crude oil and condensate represented 19
percent and NGLs were 40 percent), while natural gas accounted for
41 percent. Production during the quarter was impacted by an
in-field gathering pipeline mechanical issue leading to
approximately 3 MBoe/d of curtailments on average during the
quarter.
Highlights include:
- Drilled fourteen wells to total depth within the quarter. Eight
of the wells were located in Gates Ranch with an average lateral
length of 6,400 feet, all in the Lower Eagle Ford. The
remaining six wells were located in the L&E area, with an
average lateral length of 6,250 feet. Half of these wells
were landed in the Lower Eagle Ford and half were in the Upper
Eagle Ford.
- Commenced production on six Lower Eagle Ford wells within the
quarter, all located in the Company’s Briscoe Ranch area, with an
average of 2,000 pounds of proppant per lateral foot. Lateral
spacing between the wells was 400 feet, and the average lateral
length was 4,820 feet. On average, the wells achieved an
IP-30 rate of 299 Boe/d per thousand lateral feet, in line with the
Company’s expectations given the lateral spacing.
Approximately one-third of the production from the wells is
oil.
- Late in the fourth quarter, the Company brought on production
its initial operated Upper Eagle Ford well, using 1,920 pounds of
proppant per lateral foot. The well was 4,540 lateral feet
and achieved an IP-30 rate of 228 Boe/d per thousand lateral feet.
The Company is encouraged by these early results.
- There were two operated rigs and 30 wells drilled but
uncompleted at the end of 2016.
MARCELLUS SHALESales volumes in
the Marcellus Shale averaged 500 million cubic feet of natural gas
equivalent per day (MMcfe/d) in the fourth quarter of 2016.
Natural gas represented 89 percent of the volumes sold, with the
majority of the remainder composed of NGLs.
Highlights include:
- Closed the separation of the Joint Venture with CONSOL Energy
Inc. on December 1, 2016. Post closure, Noble Energy
maintains 100 percent working interest in approximately 363,000 net
acres in the Marcellus.
- CONE Gathering LLC contributed its remaining 25 percent
ownership interest in CONE Midstream DevCo I LP to CONE Midstream
Partners LP. Through this transaction, Noble Energy received
$70 million in cash and approximately 2.6 million common units of
CONE Midstream Partners LP.
GULF OF MEXICOIn the Gulf of
Mexico, sales volumes averaged 33 MBoe/d, a 46 percent increase
versus the same quarter of last year. Sales volumes for the
quarter benefitted from oil royalty relief booked for the Big Bend
field which added 3 MBbl/d on average. Crude oil and
condensate represented 85 percent of fourth quarter 2016 volumes,
while two percent was NGLs and 13 percent was natural gas.
Highlights include:
- Gunflint produced an average of 8 MBoe/d net within the fourth
quarter. The Big Bend and Dantzler fields produced a combined
average of 16 MBoe/d net.
- Completed a safe and efficient transition to begin operatorship
at the Thunder Hawk facility.
WEST AFRICASales volumes in West
Africa averaged 77 MBoe/d, which was 38 percent crude oil and
condensate, eight percent NGLs, and 54 percent natural gas.
Sales volumes for the quarter exceeded production volumes by
approximately 4 MBbl/d as a result of the timing of liquids lifting
from the Alen and Alba fields.
Highlights include:
- Gas volumes at Alba remain at plateau since the start-up of the
B3 compression platform in July of 2016.
- Alen and Aseng surpassed 30 million barrels of crude oil and
condensate (MMBbls) and 80 MMBbls of gross cumulative production,
respectively. Both Alen and Aseng have also reached over 900
days without a lost time incident.
EASTERN MEDITERRANEANIsrael sales
volumes averaged 274 MMcfe/d, an increase of approximately 10
percent versus the fourth quarter of last year and a record fourth
quarter for the Company, driven by strong demand from industrial
customers and displacement of coal to natural gas in Israel’s power
generation sector.
Highlights include:
- Closed the previously announced sale of Tamar working interest
in December 2016. The buyer elected to execute an option to
purchase an additional half of a percent, resulting in a total of
3.5 percent working interest sold. The transaction value of
$431 million resulted in net cash proceeds of $316 million
after-tax.
- Within the quarter, an additional 50 MMcf/d volumes were
contracted for Leviathan gas sales, bringing the total gross
volumes under contract to up to 525 MMcf/d and gross contract
revenues estimated to over $15 billion.
EXPLORATIONIn the fourth quarter,
the company added a non-operated working interest in four
exploration parcels offshore Newfoundland, Canada. The net
position totals nearly 700,000 acres in the Labrador Sea. The
Company expects to focus on seismic acquisition and evaluation over
the next three to five years.
PROVED RESERVESEstimated reserves
at year-end 2016 were 1.4 billion barrels of oil equivalent, up one
percent from 2015 year-end. The Company had total organic
reserves additions, including extensions, discoveries and
performance revisions, of 296 MMBoe. Compared to 2016
production of 154 MMBoe during the year, the Company’s organic
reserves replacement was over 190 percent. Organic reserve
replacement costs, including additions and performance revisions,
were $4.86 per barrel of oil equivalent. Reserves in the
U.S., including Gulf of Mexico, were 68 percent of the Company’s
total, with assets in Equatorial Guinea and Israel making up the
remaining 32 percent. The composition of reserves at the end
of 2016 is 38 percent liquids, 29 percent international natural gas
and 33 percent U.S. natural gas.
U.S. onshore reserve replacement, excluding
acquisition and commodity price revisions, was 2.8 times
production, reflecting improved well performance in all business
units and increased activity. The Company executed several
asset sales in 2016, including the divestment of working interest
in Tamar, the separation of the JV in the Marcellus and the Greeley
Crescent acreage sale in the DJ Basin. The net of these
activities resulted in a reduction of 73 MMBoe of proved
reserves.
The Company transferred 35 percent of proved
undeveloped reserves to proved developed producing reserves in
2016. Proved developed reserves represent approximately 66
percent of total proved reserves at the end of the year.
(1) A Non-GAAP measure, see attached Reconciliation
Schedules
WEBCAST AND CONFERENCE CALL
INFORMATION
Noble Energy, Inc. will host a live audio webcast
at 8:00 a.m. Central time tomorrow, February 14, 2017. The
webcast link is accessible on the ‘Investors’ page at
www.nobleenergyinc.com. A replay will be available on the
website. Conference call numbers for participation during the
question and answer session are:
Toll free Dial in: 888-599-4875
Int’l Toll call: 913-312-1451
Conference ID: 9151353
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.
The Securities and Exchange Commission requires oil
and gas companies, in their filings with the SEC, to disclose
proved reserves that a company has demonstrated by actual
production or conclusive formation tests to be economically and
legally producible under existing economic and operating
conditions. The SEC permits the optional disclosure of probable and
possible reserves, however, we have not disclosed the Company's
probable and possible reserves in our filings with the SEC. We use
certain terms in this news release, such as "type curve” or “MMBoe
type curve”, which are by their nature more speculative than
estimates of proved, probable and possible reserves and accordingly
are subject to substantially greater risk of being actually
realized. The SEC guidelines strictly prohibit us from including
these estimates in filings with the SEC. Investors are urged to
consider closely the disclosures and risk factors in our most
recent annual report on Form 10-K and in other reports on file with
the SEC, available from Noble Energy's offices or website,
http://www.nobleenergyinc.com.
|
Schedule 1 |
Noble Energy, Inc. |
Summary Statement of Operations |
(in millions, except per share amounts,
unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Crude Oil
and Condensate |
$ |
564 |
|
|
$ |
488 |
|
|
$ |
1,854 |
|
|
$ |
1,840 |
|
Natural
Gas |
323 |
|
|
272 |
|
|
1,239 |
|
|
1,056 |
|
Natural
Gas Liquids (1) |
92 |
|
|
70 |
|
|
296 |
|
|
197 |
|
Income
from Equity Method Investees |
31 |
|
|
30 |
|
|
102 |
|
|
90 |
|
Total
Revenues |
1,010 |
|
|
860 |
|
|
3,491 |
|
|
3,183 |
|
Operating
Expenses |
|
|
|
|
|
|
|
Lease
Operating Expense |
130 |
|
|
146 |
|
|
542 |
|
|
563 |
|
Production and Ad Valorem Taxes |
5 |
|
|
38 |
|
|
78 |
|
|
127 |
|
Transportation and Gathering Expense (1) |
129 |
|
|
82 |
|
|
463 |
|
|
289 |
|
Marketing
and Processing Expense, Net |
17 |
|
|
5 |
|
|
75 |
|
|
30 |
|
Exploration Expense |
549 |
|
|
180 |
|
|
925 |
|
|
488 |
|
Depreciation, Depletion and Amortization |
595 |
|
|
686 |
|
|
2,454 |
|
|
2,131 |
|
General
and Administrative |
106 |
|
|
89 |
|
|
399 |
|
|
396 |
|
Gain on
Divestitures |
(261 |
) |
|
— |
|
|
(238 |
) |
|
— |
|
Asset
Impairments |
92 |
|
|
490 |
|
|
92 |
|
|
533 |
|
Goodwill
Impairment |
— |
|
|
779 |
|
|
— |
|
|
779 |
|
Other
Operating Expense (Income), Net |
11 |
|
|
77 |
|
|
(3 |
) |
|
319 |
|
Total
Operating Expenses |
1,373 |
|
|
2,572 |
|
|
4,787 |
|
|
5,655 |
|
Operating
Loss |
(363 |
) |
|
(1,712 |
) |
|
(1,296 |
) |
|
(2,472 |
) |
Other Expense
(Income) |
|
|
|
|
|
|
|
Loss
(Gain) on Commodity Derivative Instruments |
87 |
|
|
(170 |
) |
|
139 |
|
|
(501 |
) |
Interest,
Net of Amount Capitalized |
86 |
|
|
80 |
|
|
328 |
|
|
263 |
|
Other
Non-Operating Expense (Income), Net |
5 |
|
|
5 |
|
|
9 |
|
|
(15 |
) |
Total
Other Expense (Income) |
178 |
|
|
(85 |
) |
|
476 |
|
|
(253 |
) |
Loss Before
Income Taxes |
(541 |
) |
|
(1,627 |
) |
|
(1,772 |
) |
|
(2,219 |
) |
Income Tax (Benefit)
Provision |
(301 |
) |
|
401 |
|
|
(787 |
) |
|
222 |
|
Net Loss
Including Noncontrolling Interests |
$ |
(240 |
) |
|
$ |
(2,028 |
) |
|
$ |
(985 |
) |
|
$ |
(2,441 |
) |
Less: Net
Income Attributable to Noncontrolling Interests (2) |
12 |
|
|
— |
|
|
13 |
|
|
— |
|
Net Loss
Attributable to Noble Energy |
$ |
(252 |
) |
|
$ |
(2,028 |
) |
|
$ |
(998 |
) |
|
$ |
(2,441 |
) |
|
|
|
|
|
|
|
|
Net Loss
Attributable to Noble Energy Per Share of Common
Stock |
|
|
|
|
|
|
|
Loss Per Share,
Basic |
$ |
(0.59 |
) |
|
$ |
(4.73 |
) |
|
$ |
(2.32 |
) |
|
$ |
(6.07 |
) |
Loss Per Share,
Diluted |
$ |
(0.59 |
) |
|
$ |
(4.73 |
) |
|
$ |
(2.32 |
) |
|
$ |
(6.07 |
) |
|
|
|
|
|
|
|
|
Weighted Average Number
of Shares Outstanding |
|
|
|
|
|
|
|
Basic |
430 |
|
|
429 |
|
|
430 |
|
|
402 |
|
Diluted |
430 |
|
|
429 |
|
|
430 |
|
|
402 |
|
|
(1)
Certain of our revenue received from purchasers was historically
presented with deductions for transportation, gathering,
fractionation or processing 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 the current presentation. |
|
(2)
The Company consolidates Noble Midstream Partners LP (NBLX),
a publicly traded subsidiary of Noble Energy, as a variable
interest entity for financial reporting purposes. The public's
ownership of approximately 45% in NBLX is reflected as a
noncontrolling interest in the financial statements. |
|
These financial statements should be read in conjunction with
the financial statements and the accompanying notes and other
information included in Noble Energy's Annual Report on Form 10-K
to be filed with the Securities and Exchange Commission on February
14, 2017.
On July 20, 2015, we completed the merger with Rosetta Resources
Inc. (Rosetta or Rosetta Merger) 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.
|
Schedule 2 |
Noble Energy, Inc. |
Condensed Balance Sheets |
(in millions, unaudited) |
|
|
December 31, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
Current
Assets |
|
|
|
Cash and
Cash Equivalents |
$ |
1,180 |
|
|
$ |
1,028 |
|
Accounts
Receivable, Net |
615 |
|
|
450 |
|
Commodity
Derivative Assets |
— |
|
|
582 |
|
Other
Current Assets |
160 |
|
|
216 |
|
Total
Current Assets |
1,955 |
|
|
2,276 |
|
Net
Property, Plant and Equipment |
18,548 |
|
|
21,300 |
|
Other
Noncurrent Assets |
508 |
|
|
620 |
|
Total
Assets |
$ |
21,011 |
|
|
$ |
24,196 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Accounts
Payable - Trade |
$ |
736 |
|
|
$ |
1,128 |
|
Other
Current Liabilities |
742 |
|
|
677 |
|
Total
Current Liabilities |
1,478 |
|
|
1,805 |
|
Long-Term
Debt |
7,011 |
|
|
7,976 |
|
Deferred
Income Taxes |
1,819 |
|
|
2,826 |
|
Other
Noncurrent Liabilities |
1,103 |
|
|
1,219 |
|
Total
Liabilities |
11,411 |
|
|
13,826 |
|
Total
Shareholders' Equity |
9,288 |
|
|
10,370 |
|
Noncontrolling Interests (1) |
312 |
|
|
— |
|
Total
Equity |
9,600 |
|
|
10,370 |
|
Total
Liabilities and Equity |
$ |
21,011 |
|
|
$ |
24,196 |
|
|
(1) The
Company consolidates Noble Midstream Partners LP (NBLX), a publicly
traded subsidiary of Noble Energy, as a variable interest entity
for financial reporting purposes. The public's ownership of
approximately 45% in NBLX is reflected as a noncontrolling interest
in the financial statements. |
|
These financial statements should be read in conjunction with
the financial statements and the accompanying notes and other
information included in Noble Energy's Annual Report on Form 10-K
to be filed with the Securities and Exchange Commission on February
14, 2017.
|
Schedule 3 |
Noble Energy, Inc. |
Condensed Statement of Cash
Flows |
(in millions, unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Cash Flows From
Operating Activities |
|
|
|
|
|
|
|
Net
Loss(1) |
$ |
(240 |
) |
|
$ |
(2,028 |
) |
|
$ |
(985 |
) |
|
$ |
(2,441 |
) |
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating
Activities |
|
|
|
|
|
|
|
Depreciation, Depletion and Amortization |
595 |
|
|
686 |
|
|
2,454 |
|
|
2,131 |
|
Asset
Impairments |
92 |
|
|
490 |
|
|
92 |
|
|
533 |
|
Goodwill
Impairment |
— |
|
|
779 |
|
|
— |
|
|
779 |
|
Dry Hole
Cost(2) |
474 |
|
|
112 |
|
|
579 |
|
|
266 |
|
Deferred
Income Taxes |
(285 |
) |
|
360 |
|
|
(984 |
) |
|
116 |
|
Loss
(Gain) on Commodity Derivative Instruments |
87 |
|
|
(170 |
) |
|
139 |
|
|
(501 |
) |
Net Cash
Received in Settlement of Commodity Derivative Instruments |
114 |
|
|
326 |
|
|
569 |
|
|
1,009 |
|
Gain on
Divestitures |
(261 |
) |
|
— |
|
|
(238 |
) |
|
— |
|
Stock
Based Compensation |
16 |
|
|
17 |
|
|
77 |
|
|
86 |
|
Gain on
Debt Extinguishment |
— |
|
|
— |
|
|
(80 |
) |
|
— |
|
Other
Adjustments for Noncash Items Included in Income |
(6 |
) |
|
59 |
|
|
188 |
|
|
213 |
|
Net
Changes in Working Capital |
(289 |
) |
|
(55 |
) |
|
(460 |
) |
|
(129 |
) |
Net Cash
Provided by Operating Activities |
297 |
|
|
576 |
|
|
1,351 |
|
|
2,062 |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
|
|
Additions
to Property, Plant and Equipment |
(377 |
) |
|
(460 |
) |
|
(1,541 |
) |
|
(2,979 |
) |
Proceeds
from Divestitures |
455 |
|
|
— |
|
|
1,241 |
|
|
151 |
|
Marcellus
Shale Acreage Exchange Consideration |
(213 |
) |
|
— |
|
|
(213 |
) |
|
— |
|
Additions
to Equity Method Investments |
— |
|
|
(18 |
) |
|
(8 |
) |
|
(104 |
) |
Distributions from Equity Method Investments |
70 |
|
|
— |
|
|
70 |
|
|
— |
|
Other |
20 |
|
|
— |
|
|
20 |
|
|
61 |
|
Net Cash Used
in Investing Activities |
(45 |
) |
|
(478 |
) |
|
(431 |
) |
|
(2,871 |
) |
Cash Flows From
Financing Activities |
|
|
|
|
|
|
|
Dividends
Paid, Common Stock |
(43 |
) |
|
(77 |
) |
|
(172 |
) |
|
(291 |
) |
Proceeds
from Issuance of Noble Energy Common Stock, Net of Offering
Costs |
— |
|
|
— |
|
|
— |
|
|
1,112 |
|
Proceeds
from Issuance of Noble Midstream Partners Common Units, Net of
Offering Costs |
— |
|
|
— |
|
|
299 |
|
|
— |
|
Repayment
of Noble Revolving Credit Facility |
— |
|
|
— |
|
|
— |
|
|
(70 |
) |
Proceeds
from Term Loan Facility |
— |
|
|
— |
|
|
1,400 |
|
|
— |
|
Repayment
of Term Loan Facility |
(850 |
) |
|
— |
|
|
(850 |
) |
|
— |
|
Repayment
of Senior Notes |
— |
|
|
— |
|
|
(1,383 |
) |
|
(12 |
) |
Other |
2 |
|
|
(21 |
) |
|
(62 |
) |
|
(85 |
) |
Net Cash (Used
In) Provided by Financing Activities |
(891 |
) |
|
(98 |
) |
|
(768 |
) |
|
654 |
|
(Decrease)
Increase in Cash and Cash Equivalents |
(639 |
) |
|
— |
|
|
152 |
|
|
(155 |
) |
Cash and Cash
Equivalents at Beginning of Period |
1,819 |
|
|
1,028 |
|
|
1,028 |
|
|
1,183 |
|
Cash and Cash
Equivalents at End of Period |
$ |
1,180 |
|
|
$ |
1,028 |
|
|
$ |
1,180 |
|
|
$ |
1,028 |
|
|
(1) The Company consolidates Noble Midstream Partners LP
(NBLX), a publicly traded subsidiary of Noble Energy, as a variable
interest entity for financial reporting purposes. For the three and
twelve months ended December 31, 2016, Net Loss includes Net Income
Attributable to Noncontrolling Interests in NBLX. |
|
(2)
Amounts include exploration impairments. |
|
These financial statements should be read in conjunction with
the financial statements and the accompanying notes and other
information included in Noble Energy's Annual Report on Form 10-K
to be filed with the Securities and Exchange Commission on February
14, 2017.
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 4 |
Noble Energy, Inc. |
Volume and Price Statistics |
(unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
Sales
Volumes |
2016 |
|
2015 |
|
2016 |
|
2015 |
Crude Oil and
Condensate (MBbl/d) |
|
|
|
|
|
|
|
United
States |
102 |
|
|
100 |
|
|
99 |
|
|
81 |
|
Equatorial Guinea |
27 |
|
|
37 |
|
|
26 |
|
|
31 |
|
Total
consolidated operations |
129 |
|
|
137 |
|
|
125 |
|
|
112 |
|
Equity
method investee - Equatorial Guinea |
2 |
|
|
1 |
|
|
2 |
|
|
2 |
|
Total |
131 |
|
|
138 |
|
|
127 |
|
|
114 |
|
Natural Gas
Liquids (MBbl/d) |
|
|
|
|
|
|
|
United
States |
50 |
|
|
53 |
|
|
54 |
|
|
39 |
|
Equity
method investee - Equatorial Guinea |
6 |
|
|
6 |
|
|
5 |
|
|
5 |
|
Total |
56 |
|
|
59 |
|
|
59 |
|
|
44 |
|
Natural Gas
(MMcf/d) |
|
|
|
|
|
|
|
United
States |
816 |
|
|
859 |
|
|
881 |
|
|
708 |
|
Israel |
272 |
|
|
247 |
|
|
281 |
|
|
252 |
|
Equatorial Guinea |
250 |
|
|
243 |
|
|
235 |
|
|
227 |
|
Total |
1,338 |
|
|
1,349 |
|
|
1,397 |
|
|
1,187 |
|
Total Sales
Volumes (MBoe/d) |
|
|
|
|
|
|
|
United
States |
287 |
|
|
295 |
|
|
301 |
|
|
237 |
|
Israel |
46 |
|
|
42 |
|
|
47 |
|
|
42 |
|
Equatorial Guinea |
69 |
|
|
78 |
|
|
65 |
|
|
69 |
|
Total
consolidated operations |
402 |
|
|
415 |
|
|
413 |
|
|
348 |
|
Equity
method investee - Equatorial Guinea |
8 |
|
|
7 |
|
|
7 |
|
|
7 |
|
Total
sales volumes (MBoe/d) |
410 |
|
|
422 |
|
|
420 |
|
|
355 |
|
|
|
|
|
|
|
|
|
Total
sales volumes (MBoe) |
37,726 |
|
|
38,821 |
|
|
153,540 |
|
|
129,625 |
|
|
|
|
|
|
|
|
|
Price
Statistics - Realized Prices |
|
|
|
|
|
|
|
Crude Oil and
Condensate ($/Bbl)(1) |
|
|
|
|
|
|
|
United
States |
$ |
46.37 |
|
|
$ |
37.82 |
|
|
$ |
39.59 |
|
|
$ |
43.46 |
|
Equatorial Guinea |
51.39 |
|
|
41.18 |
|
|
43.54 |
|
|
48.85 |
|
Total |
$ |
47.41 |
|
|
$ |
38.75 |
|
|
$ |
40.39 |
|
|
$ |
45.00 |
|
Natural Gas
Liquids ($/Bbl)(1) |
|
|
|
|
|
|
|
United
States |
$ |
20.04 |
|
|
$ |
11.55 |
|
|
$ |
14.92 |
|
|
$ |
13.91 |
|
Natural Gas
($/Mcf)(1) |
|
|
|
|
|
|
|
United
States |
$ |
2.47 |
|
|
$ |
1.88 |
|
|
$ |
2.11 |
|
|
$ |
2.10 |
|
Israel |
5.27 |
|
|
5.17 |
|
|
5.21 |
|
|
5.34 |
|
Equatorial Guinea |
0.27 |
|
|
0.27 |
|
|
0.27 |
|
|
0.27 |
|
Total |
$ |
2.63 |
|
|
$ |
2.19 |
|
|
$ |
2.42 |
|
|
$ |
2.44 |
|
|
(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
operations beginning on July 21, 2015. The results of these
volumes and prices attributable to Rosetta will affect the
comparability of our results to prior periods.
|
Schedule 5 |
Noble Energy, Inc. |
Reconciliation of Net Loss Attributable to
Noble Energy (GAAP) to |
Adjusted Income (Loss) Attributable to Noble
Energy (Non-GAAP) |
(in millions, except per share amounts,
unaudited) |
|
Adjusted
income (loss) 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 income (loss)
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
income (loss) 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 income (loss)
attributable to Noble Energy may not be comparable to similar
measures of other companies in our industry. |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Loss
Attributable to Noble Energy (GAAP) |
$ |
(252 |
) |
|
$ |
(2,028 |
) |
|
$ |
(998 |
) |
|
$ |
(2,441 |
) |
Adjustments to Net
Loss |
|
|
|
|
|
|
|
Loss on
Commodity Derivative Instruments, Net of Cash Settlements |
201 |
|
|
156 |
|
|
708 |
|
|
508 |
|
Exploration Expenses [1] |
484 |
|
|
95 |
|
|
591 |
|
|
95 |
|
Gain on
Divestitures [2] |
(261 |
) |
|
— |
|
|
(238 |
) |
|
— |
|
Asset
Impairments [3] |
92 |
|
|
490 |
|
|
92 |
|
|
533 |
|
Gain on
Debt Extinguishment [4] |
— |
|
|
— |
|
|
(80 |
) |
|
— |
|
Goodwill
Impairment |
— |
|
|
779 |
|
|
— |
|
|
779 |
|
Other
Adjustments [5] |
(3 |
) |
|
53 |
|
|
59 |
|
|
261 |
|
Total
Adjustments Before Tax |
513 |
|
|
1,573 |
|
|
1,132 |
|
|
2,176 |
|
Current
Income Tax Effect of Adjustments [6] |
(66 |
) |
|
489 |
|
|
45 |
|
|
468 |
|
Deferred
Income Tax Effect of Adjustments [6] |
(82 |
) |
|
157 |
|
|
(427 |
) |
|
9 |
|
Adjustments to
Net Loss, After Tax |
$ |
365 |
|
|
$ |
2,219 |
|
|
$ |
750 |
|
|
|
$ |
2,653 |
|
Adjusted Income
(Loss) Attributable to Noble Energy (Non-GAAP) |
$ |
113 |
|
|
$ |
191 |
|
|
$ |
(248 |
) |
|
$ |
212 |
|
|
|
|
|
|
|
|
|
Net Loss Attributable
to Noble Energy Per Share, Diluted (GAAP) |
$ |
(0.59 |
) |
|
$ |
(4.73 |
) |
|
$ |
(2.32 |
) |
|
$ |
(6.07 |
) |
Adjusted Income (Loss)
Attributable to Noble Energy Per Share, Diluted (Non-GAAP) |
$ |
0.26 |
|
|
$ |
0.44 |
|
|
$ |
(0.58 |
) |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
Weighted Average Number
of Shares Outstanding, Diluted |
433 |
|
|
431 |
|
|
430 |
|
|
405 |
|
|
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 for 2016 primarily relates to
certain West Africa exploration impairments, the license from our
2011 Dolphin discovery in Eastern Mediterranean, and the write-off
of several leases in deepwater Gulf of Mexico and offshore Falkland
Islands of $56 million and $25 million, respectively. Amount for
2015 relates to the write-off of Nevada charges. |
|
[2] Amount relates primarily to the gain
associated with the divestiture of 3.5% working interest in
Tamar. |
|
[3] Amount for 2016 primarily relates to the
write-off of alternative development design costs that are not part
of the Company's development plan for Leviathan. Amount for 2015
relates to Equatorial Guinea, Gulf of Mexico and Eastern
Mediterranean properties. |
|
[4] Amount relates to the early tendering of
senior notes assumed in the Rosetta Merger. |
|
[5] Amount for 2016 primarily relate to loss on
asset due to terminated contract and inventory fair value write
down. Amount for 2015 primarily relate to Nevada exploration
expense, pension plan expense, Rosetta merger expenses, corporate
restructuring and other charges. |
|
[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
3.5% Tamar divestiture in Eastern Mediterranean) and the change in
the indefinite reinvestment assertion related to accumulated
undistributed earnings of foreign subsidiaries. |
Schedule 6 |
Noble Energy, Inc. |
Reconciliation of Net Loss Attributable to
Noble Energy (GAAP) to Adjusted Income (Loss) 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 December 31, |
|
Twelve Months Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Loss
Attributable to Noble Energy (GAAP) |
$ |
(252 |
) |
|
$ |
(2,028 |
) |
|
$ |
(998 |
) |
|
$ |
(2,441 |
) |
Adjustments to Net Loss, After Tax
[1] |
365 |
|
|
2,219 |
|
|
750 |
|
|
|
2,653 |
|
Adjusted Income
(Loss) Attributable to Noble Energy (Non-GAAP) |
113 |
|
|
191 |
|
|
(248 |
) |
|
212 |
|
|
|
|
|
|
|
|
|
Adjustments to Adjusted
Net Loss (Income) Attributable to Noble Energy |
|
|
|
|
|
|
|
Depreciation, Depletion, and Amortization |
595 |
|
|
686 |
|
|
2,454 |
|
|
2,131 |
|
Exploration Expense [2] |
65 |
|
|
85 |
|
|
334 |
|
|
393 |
|
Interest,
Net of Amount Capitalized |
86 |
|
|
80 |
|
|
328 |
|
|
263 |
|
Current
Income Tax (Benefit) Expense [3] |
50 |
|
|
(447 |
) |
|
152 |
|
|
(362 |
) |
Deferred
Income Tax (Benefit) Expense [3] |
(203 |
) |
|
203 |
|
|
(557 |
) |
|
107 |
|
Adjusted
EBITDAX (Non-GAAP) |
$ |
706 |
|
|
$ |
798 |
|
|
$ |
2,463 |
|
|
$ |
2,744 |
|
|
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 Income (Loss)
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 December 31, |
|
Twelve Months Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Capital Expenditures
(Accrual Based) |
$ |
404 |
|
|
$ |
527 |
|
|
$ |
1,339 |
|
|
$ |
2,852 |
|
Marcellus Shale Acreage
Exchange Consideration |
234 |
|
|
— |
|
|
234 |
|
|
— |
|
Acquisition
Capital |
— |
|
|
— |
|
|
— |
|
|
3,175 |
|
Increase (Decrease) in
Capital Lease Obligations |
— |
|
|
(5 |
) |
|
5 |
|
|
55 |
|
Total Capital
Expenditures (Accrual Based) [4] |
$ |
638 |
|
|
|
$ |
522 |
|
|
$ |
1,578 |
|
|
$ |
6,082 |
|
|
[4] Includes capital expenditures from our
publicly traded subsidiary, Noble Midstream Partners LP, of $50
million for full year 2016. |
Schedule 7 |
Noble Energy, Inc. |
Supplemental Data |
(in millions, unaudited) |
|
2016 Costs
Incurred in Oil and Gas Activities |
|
United States |
|
Int’l [1] |
|
Total |
|
|
|
|
|
|
|
Proved property
acquisition costs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Unproved property
acquisition costs |
|
234 |
|
|
— |
|
|
234 |
|
Exploration costs |
|
264 |
|
|
95 |
|
|
359 |
|
Development costs
[2] |
|
939 |
|
|
140 |
|
|
1,079 |
|
Total
costs incurred |
|
$ |
1,437 |
|
|
$ |
235 |
|
|
$ |
1,672 |
|
|
|
|
|
|
|
|
Reconciliation
to Capital Spending (accrual basis) |
|
|
|
|
|
|
Total costs
incurred |
|
|
|
|
|
$ |
1,672 |
|
Exploration overhead |
|
|
|
|
|
(109 |
) |
Lease
rentals |
|
|
|
|
|
(30 |
) |
Asset
retirement obligations |
|
|
|
|
|
(18 |
) |
Total oil and gas
spending |
|
|
|
|
|
1,515 |
|
Investment in equity method investee |
|
|
|
|
|
8 |
|
Other
corporate capital and capital leases |
|
|
|
|
|
55 |
|
Total capital spending
(accrual basis) |
|
|
|
|
|
$ |
1,578 |
|
|
|
|
|
|
|
|
Proved Reserves
[3] |
|
United States |
|
Int’l [4] |
|
Total |
Total Barrel
Oil Equivalents (MMBoe) |
|
|
|
|
|
|
Beginning reserves -
December 31, 2015 |
|
884 |
|
|
537 |
|
|
1,421 |
|
Price-related revisions |
|
(46 |
) |
|
(7 |
) |
|
(53 |
) |
Other
non-price-related revisions |
|
106 |
|
|
11 |
|
|
117 |
|
Extensions, discoveries and other additions |
|
179 |
|
|
— |
|
|
179 |
|
Purchase
of minerals in place |
|
4 |
|
|
— |
|
|
4 |
|
Sale of
minerals in place |
|
(41 |
) |
|
(36 |
) |
|
(77 |
) |
Production |
|
(110 |
) |
|
(44 |
) |
|
(154 |
) |
Ending reserves -
December 31, 2016 |
|
976 |
|
|
461 |
|
|
1,437 |
|
Proved
Developed Reserves (MMBoe) |
|
|
|
|
|
|
December
31, 2015 |
|
540 |
|
|
396 |
|
|
936 |
|
December
31, 2016 |
|
554 |
|
|
397 |
|
|
951 |
|
|
[1] International primarily includes Israel,
Equatorial Guinea, Cyprus and Falkland Islands. |
|
[2] Includes ARO costs of $18 million for
United States and includes capital expenditures from our publicly
traded subsidiary, Noble Midstream Partners LP, of $50 million for
full year 2016. |
|
[3] Netherland, Sewell & Associates, Inc.
performed a reserves audit for 2016 and concluded that the
Company's estimates of proved reserves were, in the aggregate,
reasonable and have been prepared in accordance with Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserves
Information promulgated by the Society of Petroleum Engineers. |
|
[4] International includes Israel and
Equatorial Guinea. |
Investor Contacts
Brad Whitmarsh
(281) 943-1670
Brad.Whitmarsh@nblenergy.com
Megan Repine
(832) 639-7380
Megan.Repine@nblenergy.com
Megan Dolezal
(281) 943-1861
megan.dolezal@nblenergy.com
Media Contacts:
Reba Reid
(713) 412-8441
media@nblenergy.com
Paula Beasley
(281) 876-6133
media@nblenergy.com
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