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Noble Energy Announces Second Quarter 2009 Results
HOUSTON, July 30, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Noble Energy, Inc. (NYSE: NBL) reported today a second quarter 2009 net loss of $57 million, or $0.33 per share diluted, on revenues of $491 million. The results included an unrealized mark-to-market financial hedging loss, a gain on the completed 2008 Argentina asset sale, and various other items which reduced earnings in total $173 million after-tax. Excluding these items, which are typically not considered by analysts in published estimates, second quarter 2009 adjusted net income(1) was $116 million, or $0.66 per share diluted. For the same period in 2008, the Company reported a net loss of $144 million, or $0.84 per share diluted, on revenues of $1.2 billion. Adjusted net income(1) for the second quarter 2008 was $337 million, or $1.93 per share diluted.
Discretionary cash flow(1) for the second quarter 2009 was $374 million, compared to $685 million for the same period in 2008. Net cash provided by operating activities was $313 million and capital expenditures were $323 million.
Key highlights for the second quarter 2009 include:
-- Record Wattenberg production of 282 million cubic feet equivalent per
day, including liquid production of over 21 thousand barrels per day
-- Awarded 22 of the 24 high bid lease blocks in Central Gulf of Mexico
Lease Sale 208
-- Successful Tamar appraisal well offshore Israel increasing the gross
mean resource estimate to 6.3 trillion cubic feet of natural gas
-- Flow test at Dalit natural gas discovery offshore Israel confirmed
deliverability up to 200 million cubic feet per day and gross mean
resources of 500 billion cubic feet
"Second quarter 2009 results were very encouraging for Noble Energy, as we benefited from our leverage to strengthening liquid markets, while continuing to move forward our long-term developments. Critical progress was made in each of our three major project areas, which we expect will deliver significant growth for our Company beginning in 2011. We recently sanctioned the Aseng oil development in Equatorial Guinea and announced a very successful appraisal well at Tamar offshore Israel. In the near-term, we continue to see a challenged natural gas market in the U.S.; however, the benefits of our diversified portfolio should show up in the second half of the year with nice volume growth expected from our international assets," said Noble Energy's Chairman and CEO, Charles D. Davidson.
Total sales volumes averaged 206 thousand barrels of oil equivalent per day (MBoe/d) for the quarter, down five percent from the same period in 2008. Production was 207 MBoe/d in the current period. United States volumes were down, primarily in the deepwater Gulf of Mexico, due to the impact of ongoing hurricane shut-ins and natural decline in field production.
International volumes declined versus the second quarter 2008, with the timing of liftings in the North Sea contributing to the decrease. In addition, power plant downtime, overall economic factors, and increased imports resulted in lower volumes in Israel. West Africa volumes were higher due to greater natural gas sales to the third-party liquefied natural gas facility.
Second quarter 2009 commodity price realizations were down significantly from the same quarter last year. Crude oil and condensate averaged $52.05 per barrel and natural gas averaged $2.13 per thousand cubic feet.
Cash costs, including lease operating, production and ad valorem taxes, transportation, and SG&A were $10.08 per barrel of oil equivalent (Boe) for the quarter, down seven percent versus the second quarter of 2008. Lower production taxes more than offset higher lease operating expenses (LOE). Depreciation, depletion, and amortization (DD&A) was up six percent to $10.46 per Boe. DD&A unit costs were impacted by higher rates, primarily onshore in the United States, as well as changes in the Company's volume mix.
(1) A Non-GAAP measure, see attached Reconciliation Schedules
CONFERENCE CALL
Noble Energy's second quarter 2009 conference call will be available today via live audio webcast at 9:00 a.m. Central Time. To listen, log on to www.nobleenergyinc.com and click on the Investors tab and go to the Investors Events link. Dial in numbers are (877) 856-1965 or (719) 325-4810. The conference call replay will be available until August 31, 2009. To access the replay, go to www.nobleenergyinc.com and click on the Investors tab and go to the Investors Events link. You can also access the replay by dialing (888) 203-1112 or (719) 457-0820. The pin code is 2546931.
Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with significant international operations offshore Israel, UK and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Visit Noble Energy online at www.nobleenergyinc.com.
This news release may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Noble Energy's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected, and actual results may differ materially from those projected. Risks, uncertainties and assumptions that could cause actual results to differ materially from those projected 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 action, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's business that are detailed in its Securities and Exchange Commission filings. Words such as "anticipates," "believes," "expects," "intends," "will," "should," "may," and similar expressions may be used to identify forward-looking statements. Noble Energy assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.
This news release may also contain certain forward-looking non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating the company's overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry.
Schedule 1
Noble Energy, Inc.
Reconciliation of Net Income (Loss) to Adjusted Net Income
(in millions, except per share amounts, unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Net Income (Loss) $(57) $(144) $(245) $71
Adjustments, net of tax (1)
Unrealized losses on commodity derivative
instruments 190 481 216 630
Gain on sale of Argentina assets (16) - (14) -
Asset impairments (2) - - 263 -
Other adjustments, net (1) - (1) -
--- --- --- ---
Adjusted Net Income (3) $116 $337 $219 $701
---- ---- ---- ----
Adjusted Earnings Per Share
Basic $0.67 $1.96 $1.27 $4.08
Diluted 0.66 1.93 1.25 4.01
Weighted average number of shares outstanding
Basic 173 172 173 172
Diluted (4) 175 175 175 175
(1) The net of tax amounts are determined by calculating the tax provision
for GAAP Net Income (Loss), which includes the adjusting items, and
comparing the results to the tax provision for Adjusted Net Income,
which excludes the adjusting items. The difference in the tax
provision calculations represents the tax impact of the adjusting
items listed here. The calculation is performed at the end of each
quarter and, as a result, the tax rates for each discrete period are
different.
(2) Total pre-tax (non-cash) impairments, recorded in the first quarter
of 2009, were predominantly related to Granite Wash, an onshore US
area where we have significantly reduced investments beginning in
2007.
(3) Adjusted net income should not be considered a substitute for net
income as reported in accordance with GAAP. Adjusted net income is
provided for comparison to earnings forecasts prepared by analysts
and other third parties. Our management believes, and certain
investors may find, that adjusted net income is beneficial in
evaluating our financial performance.
(4) The adjusted diluted earnings per share calculation for the second
quarter of 2009 and the first six months of 2009 includes an increase
to diluted shares of approximately 2 million shares representing the
incremental dilutive shares that would be included if not for our
second quarter 2009 and first six months 2009 net loss. The adjusted
diluted earnings per share calculation for the second quarter of 2008
includes an increase to diluted shares of approximately 3 million
shares representing the incremental dilutive shares that would be
included if not for our second quarter 2008 net loss.
Schedule 2
Noble Energy, Inc.
Summary Statement of Operations
(in millions, except per share amounts, unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Revenues
Crude oil and condensate $296 $674 $497 $1,200
Natural gas 143 399 326 771
NGLs 21 57 43 103
Income from equity method investees 16 56 27 118
Other revenues 15 19 39 38
--- --- --- ---
Total revenues 491 1,205 932 2,230
--- ----- --- -----
Operating Expenses
Lease operating expense 93 88 193 170
Production and ad valorem taxes 23 51 42 94
Transportation expense 13 16 25 29
Exploration expense 33 103 75 143
Depreciation, depletion and amortization 196 196 396 399
General and administrative 60 61 119 121
Asset impairments - - 437 -
Other operating expense, net (3) 20 (11) 46
--- --- --- ---
Total operating expenses 415 535 1,276 1,002
--- --- ----- -----
Operating Income (Loss) 76 670 (344) 1,228
Other (Income) Expense
Loss on commodity derivative instruments 139 828 66 1,065
Interest, net of amount capitalized 23 17 41 34
Other expense (income), net 4 23 12 10
--- --- --- ---
Total other (income) expense 166 868 119 1,109
--- --- --- -----
Income (Loss) Before Taxes (90) (198) (463) 119
Income Tax Provision (Benefit) (33) (54) (218) 48
--- --- ---- ---
Net Income (Loss) $(57) $(144) $(245) $71
---- ----- ----- ---
Earnings (Loss) Per Share
Basic $(0.33) $(0.84) $(1.42) $0.41
Diluted (0.33) (0.84) (1.42) 0.41
Weighted average number of shares
outstanding
Basic 173 172 173 172
Diluted 173 172 173 175
Schedule 3
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Crude Oil and Condensate Sales Volumes (MBpd)
United States 37 44 36 43
West Africa 15 14 14 15
North Sea 6 8 7 9
Other International 5 4 4 5
--- --- --- ---
Total consolidated operations 63 70 61 72
Equity method investee 2 2 2 2
--- --- --- ---
Total sales volumes 65 72 63 74
--- --- --- ---
Crude Oil and Condensate Realized
Prices ($/Bbl)
United States $51.85 $99.05 $43.92 $85.36
West Africa 51.63 112.32 46.19 100.16
North Sea 56.57 126.05 50.81 112.36
Other International 48.87 109.17 43.28 87.47
----- ------ ----- -----
Consolidated average realized prices $52.05 $105.46 $45.17 $91.88
------ ------- ------ ------
Natural Gas Sales Volumes (MMcfpd)
United States 394 402 403 397
West Africa 244 222 243 221
North Sea 5 5 5 6
Israel 95 121 103 133
Other International 16 22 23 23
--- --- --- ---
Total sales volumes 754 772 777 780
--- --- --- ---
Natural Gas Realized Prices ($/Mcf)
United States $3.09 $9.82 $3.52 $9.40
West Africa 0.27 0.27 0.27 0.27
North Sea 5.20 10.81 6.72 10.18
Israel 2.76 2.72 2.78 2.90
Other International - - - -
--- --- --- ---
Average realized prices $2.13 $5.86 $2.39 $5.60
----- ----- ----- -----
Natural Gas Liquids (NGL) Sales
Volumes (MBpd)
United States 10 10 10 10
Equity method investee 6 7 6 7
--- --- --- ---
Total sales volumes 16 17 16 17
--- --- --- ---
Natural Gas Liquids Realized
Prices ($/Bbl)
United States $23.94 $59.65 $24.33 $57.55
Barrels of Oil Equivalent Volumes (MBoepd)
United States 112 121 113 119
West Africa 56 51 55 52
North Sea 7 9 8 10
Israel 16 20 17 22
Other International 8 8 8 9
--- --- --- ---
Total consolidated operations 199 209 201 212
Equity method investee 7 9 7 9
--- --- --- ---
Total barrels of oil equivalent (MBoepd) 206 218 208 221
--- --- --- ---
Barrels of oil equivalent volumes (MMBoe) 19 20 38 40
--- --- --- ---
Schedule 4
Noble Energy, Inc.
Condensed Balance Sheets
(in millions)
(unaudited)
June 30, December 31,
-------- ------------
2009 2008
---- ----
Assets
Current Assets
Cash and cash equivalents $956 $1,140
Accounts receivable, net 450 423
Commodity derivative assets 203 437
Other current assets 128 158
--- ---
Total current assets 1,737 2,158
Net property, plant and equipment 8,881 9,004
Goodwill 758 759
Other noncurrent assets 475 463
--- ---
Total Assets $11,851 $12,384
------- -------
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable - trade $493 $579
Other current liabilities 397 595
--- ---
Total current liabilities 890 1,174
Deferred income taxes 1,947 2,174
Long-term debt 2,416 2,241
Other noncurrent liabilities 539 486
--- ---
Total Liabilities 5,792 6,075
Total Shareholders' Equity 6,059 6,309
----- -----
Total Liabilities and Shareholders' Equity $11,851 $12,384
------- -------
Schedule 5
Noble Energy, Inc.
Discretionary Cash Flow and Reconciliation to Operating Cash Flow
(in millions, unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Adjusted Net Income (1) $116 $337 $219 $701
Adjustments to reconcile net income to
discretionary cash flow:
Depreciation, depletion and amortization 196 196 396 399
Exploration expense 33 103 75 143
Interest capitalized (12) (6) (18) (16)
(Income) / distributions from equity
method investments, net (11) (11) (22) 3
Deferred compensation adjustment 5 29 10 22
Deferred income taxes 21 60 45 118
Stock-based compensation expense 12 11 24 20
Settlement of previously recognized hedge
losses (2) - (39) - (101)
Other, net 14 5 (16) 13
--- --- --- ---
Discretionary Cash Flow (3) $374 $685 $713 $1,302
---- ---- ---- ------
Reconciliation to Operating Cash Flows
Net changes in working capital (35) (153) (51) (290)
Cash exploration costs (26) (42) (66) (74)
Capitalized interest 12 6 18 16
Current tax benefit (expense) of net
income adjustments 22 151 (76) 196
Gain on disposal of assets (24) - (24) -
Other adjustments (10) 1 (16) 4
--- --- --- ---
Net Cash Provided by Operating Activities $313 $648 $498 $1,154
---- ---- ---- ------
Capital Expenditures, accrual based $323 $561 $709 $1,046
(1) See Schedule 1, Reconciliation of Net Income (Loss) to Adjusted Net
Income.
(2) See Schedule 6, Effect of Commodity Derivative Instruments.
(3) The table above reconciles discretionary cash flow to net cash
provided by operating activities. While discretionary cash flow is
not a GAAP measure of financial performance, our management believes
it is a useful tool for evaluating our overall financial performance.
Among our management, research analysts, portfolio managers and
investors, discretionary cash flow is broadly used as an indicator of
a company's ability to fund exploration and production activities and
meet financial obligations. Discretionary cash flow is also commonly
used as a basis to value and compare companies in the oil and gas
industry.
Schedule 6
Noble Energy, Inc.
Effect of Commodity Derivative Instruments
(in millions, unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Reclassification from Accumulated Other
Comprehensive Loss (AOCL) to Revenue (1)
Crude oil $(15) $(93) $(32) $(190)
Natural gas - (2) - 35
--- --- --- ---
Total Revenue Decrease $(15) $(95) $(32) $(155)
---- ---- ---- -----
Gain (Loss) on Derivative Instruments
Crude oil
Realized $66 $(72) $162 $(79)
Unrealized (189) (575) (271) (680)
---- ---- ---- ----
Total crude oil $(123) $(647) $(109) $(759)
----- ----- ----- -----
Natural gas
Realized $72 $(40) $130 $(52)
Unrealized (88) (141) (87) (254)
--- ---- --- ----
Total natural gas (16) (181) 43 (306)
--- ---- --- ----
Total Gain (Loss) on Derivative
Instruments $(139) $(828) $(66) $(1,065)
----- ----- ---- -------
Summary of Cash Settlements
Cash settlements (received) paid $(123) $246 $(260) $387
Realized gain (loss) on derivative
instruments 138 (112) 292 (131)
Amounts reclassified from AOCL (15) (95) (32) (155)
--- --- --- ----
Settlement of previously recognized hedge
losses $- $39 $- $101
--- --- --- ----
(1) The amounts in AOCL represent deferred unrealized hedge gains and
losses. Upon settlement, these deferred gains and losses are
reclassified from AOCL to net income as increases or decreases to
crude oil and natural gas revenues, and impact reported realized
commodity prices.
SOURCE Noble Energy, Inc.
http://www.nobleenergyinc.com
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