Noble Energy, Inc. (NYSE:NBL) (“Noble Energy” or the "Company”)
today announced fourth quarter and full-year 2017 financial and
operating results. Highlights include:
- Strengthened the balance sheet through non-core asset
divestitures and retired approximately $570 million of Noble Energy
debt in the fourth quarter.
- Delivered record quarterly U.S. onshore oil volumes and growth
of over 40 percent(1) from first quarter to fourth quarter
2017.
- Increased fourth quarter 2017 total company liquids composition
to 56 percent compared to 46 percent in the fourth quarter 2016.
U.S. onshore liquids grew to 67 percent of total U.S. onshore
production.
- Grew fourth quarter combined Texas volumes to 130 MBoe/d, and
increased oil as a percentage of DJ Basin volumes to a record 55
percent.
- Commenced operation at the Company’s second Central Gathering
Facility in the Delaware Basin.
- Reduced unit operating expenses eight percent from the third
quarter 2017 to $8.10 per BOE in the fourth quarter.
- Proved reserves added replaced approximately 625 percent of
2017 production.
David L. Stover, Noble Energy’s Chairman,
President and CEO, commented, “For Noble Energy, 2017 was a
transformative year as we repositioned our portfolio and executed
on our strategy to drive capital efficiency in our high-margin,
high-return basins. We significantly advanced the development
of our U.S. onshore assets as we reduced drilling costs and
enhanced well productivity, while materially increasing the scale
of our Texas operations. In addition, the value of our midstream
business expanded through the build-out of multiple facilities to
support the Company's future upstream production plans. Our
world-class Leviathan project was one of the largest offshore
projects sanctioned in 2017, and we commenced project execution,
taking advantage of a low point in the cycle for offshore
costs. All of this was accomplished with record safety
performance across the Company. The results delivered in 2017
provide significant momentum as we enter 2018 and deliver growing
value for shareholders."
Fourth Quarter and Full-Year 2017
Results
Fourth quarter net income attributable to Noble
Energy totaled $494 million, or $1.01 per diluted share. The
Company reported adjusted net income(2) and adjusted net income per
share(2) attributable to Noble Energy for the quarter of $156
million, or $0.32 per diluted share, which excludes the impact of
certain items typically not considered by analysts in formulating
estimates. Adjusted EBITDAX(2) was $789 million.
During the fourth quarter, the Company invested
$579 million in its upstream operations and funded $76 million for
onshore midstream assets. Approximately 80 percent was
deployed to our U.S. onshore plays and 17 percent was spent in
Israel primarily for Leviathan development.
Total Company sales volumes for the fourth
quarter 2017 were 380 thousand barrels of oil equivalent per day
(MBoe/d), an increase of 25 MBoe/d from the third quarter 2017 and
up nearly 50 MBoe/d(1) from the fourth quarter of last year.
Volumes for the fourth quarter of 2017 were impacted by
approximately 7 MBoe/d as a result of winter storms and third-party
facility impacts in the Company's Texas operations. U.S. onshore
volumes were up approximately 40 percent(1) from the fourth quarter
of 2016 while combined sales volumes from the Gulf of Mexico and
West Africa were down approximately 20 percent due to natural field
decline. In Israel, net volumes were slightly lower than the
fourth quarter of last year, driven by the impact of planned
maintenance work in October 2017.
Unit operating expenses for the fourth quarter
2017 totaled $8.10 per BOE, including lease operating expenses
(LOE), production taxes, gathering and transportation expenses and
marketing costs. LOE decreased by three percent from third
quarter 2017 to $4.49 per BOE. Production tax expense for the
period totaled 1.7 percent of oil, gas, and NGL revenues and
benefited from finalizing prior years’ property tax returns.
Depreciation, depletion and amortization was reduced to $14.28 per
BOE, down 11 percent from the fourth quarter of last year primarily
as a result of increased reserve bookings from our enhanced onshore
well performance.
Equity method and other income for the quarter
of $59 million was greater than expected primarily due to the
strength of liquids prices at the methanol and LPG plants in
Equatorial Guinea.
Adjustments to net income attributable to Noble
Energy for the quarter include the removal of the gain on the sale
of mineral interests, unrealized mark to market loss on commodity
hedges, and the net impact from the recently enacted Tax Cuts and
Jobs Act, among other items. There is no significant
near-term cash impact to Noble Energy resulting from the new tax
law.
Full-year 2017 net loss attributable to Noble
Energy totaled $1,118 million, or $2.38 per diluted share.
The Company reported adjusted net income(2) and adjusted net income
per share(2) attributable to Noble Energy for the year of $147
million, or $0.31 per diluted share. Adjusted EBITDAX(2) was
$2,648 million for full-year 2017.
The Company achieved full year reported sales
volumes of 381 MBoe/d, an increase of seven percent(1) from
2016. Organic upstream capital expenditures and midstream
investments funded by the Company totaled $2,556 million for the
year.
Strengthening the Balance
Sheet
In November 2017, the Company closed the sale of
non-core mineral and royalty interests, including approximately 4
MBoe/d of net production for $340 million. In December 2017, the
Company closed the sale of approximately 30,200 net acres of its DJ
Basin position in Weld County, Colorado, which included
approximately 3 MBoe/d. Noble Energy received $568 million
from the initial close of the DJ Basin sale and anticipates the
remaining funds of approximately $40 million to be received in a
final closing by mid-2018.
During the fourth quarter, the Company paid off
its term loan balance of $550 million and certain legacy Rosetta
Resources notes of approximately $20 million, bringing full-year
2017 Noble Energy debt retirement to approximately $1.2 billion,
inclusive of Clayton Williams Energy debt retired at the time of
acquisition. The Company ended 2017 with $4.5 billion in total
financial liquidity, comprised of cash and Noble Energy's available
credit facility borrowing capacity.
Significant U.S. Onshore
Growth
Total sales volumes across the Company’s U.S.
onshore assets averaged 249 MBoe/d in the fourth quarter 2017, up
approximately 40 percent(1) from the fourth quarter of 2016.
U.S. onshore oil volumes totaled a record 104 MBbl/d, up over 40
percent(1) from the first quarter 2017. Fourth quarter 2017
volumes reflect record quarterly volumes in the Company’s Eagle
Ford and Delaware Basin assets. Texas volumes were reduced
approximately 7 MBoe/d in the fourth quarter due to winter storms
in December and third-party facility impacts.
The DJ Basin averaged 115 MBoe/d, an increase of
three percent from the fourth quarter of last year driven by strong
well performance in the Company’s Wells Ranch and East Pony
areas. Oil volumes in the DJ Basin totaled 63 MBbl/d, or 55
percent of total basin production, up five percentage points from
the fourth quarter of last year.
Noble Energy's Texas volumes increased by more
than 75 MBoe/d in the fourth quarter as compared to the fourth
quarter 2016. Production from the Eagle Ford doubled from the
fourth quarter 2016 to an average of 92 MBoe/d through development
of the Lower Eagle Ford in South Gates Ranch. Delaware Basin
production of 38 MBoe/d was nearly four times that of the fourth
quarter 2016 as the Company continued to accelerate the pace of
development and delivered strong well performance. The second
Delaware Basin central gathering facility, operated by Noble
Midstream Partners, started up at the beginning of December
2017.
During the fourth quarter, the Company averaged
eight operated drilling rigs (two DJ, five Delaware and one Eagle
Ford) and four completion crews (two DJ and two Delaware).
Fourth quarter operated wells brought online included 22 in the DJ
Basin, 10 in the Eagle Ford and 21 in the Delaware.
Strong Performance in
Israel
Net sales volumes totaled 262 million cubic feet
of natural gas equivalent per day (MMcfe/d) during the fourth
quarter of 2017. Gross production from the Company’s assets
in Israel averaged 911 MMcfe/d. The Company completed planned
maintenance at Tamar ahead of schedule in the early part of the
fourth quarter, contributing to 98 percent uptime during the
quarter.
Currently, development of the Leviathan project
is approximately 40 percent complete. Construction of the
production platform is underway, preparations to mobilize the
drilling rig commenced and the project remains on budget and
schedule with first gas sales anticipated by the end of 2019.
Offshore Assets
Sales volumes for West Africa were 64 MBoe/d (30
percent oil) which were equal to produced volumes. Quarterly
sales volumes in the Gulf of Mexico averaged 23 MBoe/d, with 78
percent oil contribution, reflecting continued strong field
performance and facility uptime.
Additional details for the fourth quarter and
year-end results can be found in the quarterly supplement on the
Company’s website, www.nblenergy.com.
(1) Pro forma for asset
divestments.(2) A Non-GAAP measure, please see the
respective earnings release schedules included herein for
reconciliations.
Webcast and Conference Call
Information
Noble Energy, Inc. will host a live audio
webcast and conference call at 8:00 a.m. Central Time on February
20, 2018. The webcast link is accessible on the 'Investors'
page at www.nblenergy.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: 800-289-0438International Dial
in: 323-994-2083Conference ID: 4328087
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.
Founded more than 85 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.nblenergy.com.
This news release contains certain
"forward-looking statements" within the meaning of federal
securities laws. Words such as "anticipates", "believes",
"expects", "intends", "will", "should", "may", 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. Such
forward-looking statements may include, but are not limited to,
future financial and operating results, and other statements that
are not historical facts, including estimates of oil and natural
gas reserves and resources, 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 and
uncertainties 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 businesses that are discussed in Noble Energy's most
recent annual reports on Form 10-K, respectively, and in other
Noble Energy reports on file with the Securities and Exchange
Commission (the "SEC"). These reports are also available from the
sources described above. 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 any
forward-looking statements should circumstances or management’s
estimates or opinions change.
This news release also contains certain
historical 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 Noble Energy’s respective earnings release for reconciliations
of the differences between any historical non-GAAP measures used in
this news release and the most directly comparable GAAP financial
measures.
|
Schedule 1 |
Summary Statement of Operations |
(in millions, except per share amounts,
unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
|
|
|
|
|
|
|
Crude Oil
and Condensate |
$ |
709 |
|
|
$ |
564 |
|
|
$ |
2,346 |
|
|
$ |
1,854 |
|
Natural
Gas Liquids |
164 |
|
|
92 |
|
|
493 |
|
|
296 |
|
Natural
Gas |
269 |
|
|
323 |
|
|
1,221 |
|
|
1,239 |
|
Income
from Equity Method Investees and Other |
59 |
|
|
31 |
|
|
196 |
|
|
102 |
|
Total
Revenues |
1,201 |
|
|
1,010 |
|
|
4,256 |
|
|
3,491 |
|
Operating
Expenses |
|
|
|
|
|
|
|
Lease
Operating Expense |
157 |
|
|
130 |
|
|
571 |
|
|
542 |
|
Production and Ad Valorem Taxes |
19 |
|
|
5 |
|
|
138 |
|
|
78 |
|
Gathering, Transportation and Processing Expense |
99 |
|
|
126 |
|
|
432 |
|
|
480 |
|
Marketing
Expense |
8 |
|
|
19 |
|
|
47 |
|
|
58 |
|
Exploration Expense |
52 |
|
|
549 |
|
|
188 |
|
|
925 |
|
Depreciation, Depletion and Amortization |
499 |
|
|
595 |
|
|
2,053 |
|
|
2,454 |
|
General
and Administrative |
111 |
|
|
106 |
|
|
415 |
|
|
399 |
|
Loss on
Marcellus Shale Upstream Divestiture |
53 |
|
|
— |
|
|
2,379 |
|
|
— |
|
Asset
Impairments |
63 |
|
|
92 |
|
|
70 |
|
|
92 |
|
Other
Operating Income, Net |
(321 |
) |
|
(249 |
) |
|
(235 |
) |
|
(161 |
) |
Total
Operating Expenses |
740 |
|
|
1,373 |
|
|
6,058 |
|
|
4,867 |
|
Operating
Income (Loss) |
461 |
|
|
(363 |
) |
|
(1,802 |
) |
|
(1,376 |
) |
Other
Expense |
|
|
|
|
|
|
|
Loss
(Gain) on Commodity Derivative Instruments |
82 |
|
|
87 |
|
|
(63 |
) |
|
139 |
|
Loss
(Gain) on Extinguishment of Debt |
— |
|
|
— |
|
|
98 |
|
|
(80 |
) |
Interest,
Net of Amount Capitalized |
83 |
|
|
86 |
|
|
354 |
|
|
328 |
|
Other
Non-Operating Expense, Net |
4 |
|
|
5 |
|
|
— |
|
|
9 |
|
Total
Other Expense |
169 |
|
|
178 |
|
|
389 |
|
|
396 |
|
Income (Loss)
Before Income Taxes |
292 |
|
|
(541 |
) |
|
(2,191 |
) |
|
(1,772 |
) |
Income Tax Benefit |
(224 |
) |
|
(301 |
) |
|
(1,141 |
) |
|
(787 |
) |
Net Income
(Loss) Including Noncontrolling Interests |
516 |
|
|
(240 |
) |
|
(1,050 |
) |
|
(985 |
) |
Less: Net
Income Attributable to Noncontrolling Interests(1) |
22 |
|
|
12 |
|
|
68 |
|
|
13 |
|
Net Income
(Loss) Attributable to Noble Energy |
$ |
494 |
|
|
$ |
(252 |
) |
|
$ |
(1,118 |
) |
|
$ |
(998 |
) |
|
|
|
|
|
|
|
|
Net Income
(Loss) Attributable to Noble Energy Per Share of Common
Stock |
|
|
|
|
|
|
|
Income (Loss)
Per Share, Basic and Diluted |
$ |
1.01 |
|
|
$ |
(0.59 |
) |
|
$ |
(2.38 |
) |
|
$ |
(2.32 |
) |
Weighted
Average Number of Shares Outstanding |
|
|
|
|
|
|
|
Basic |
487 |
|
— |
|
430 |
|
— |
|
469 |
|
— |
|
430 |
|
Diluted |
488 |
|
|
430 |
|
|
469 |
|
|
430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 interest 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
20, 2018. |
|
|
Schedule 2 |
Condensed Balance Sheets |
(in millions, unaudited) |
|
|
|
|
|
|
December 31, 2017 |
|
|
|
December 31, 2016 |
|
Assets |
|
|
|
Current
Assets |
|
|
|
Cash and
Cash Equivalents |
$ |
675 |
|
|
$ |
1,180 |
|
Accounts
Receivable, Net |
748 |
|
|
615 |
|
Other
Current Assets |
780 |
|
|
160 |
|
Total
Current Assets |
2,203 |
|
|
1,955 |
|
Net
Property, Plant and Equipment |
17,502 |
|
|
18,548 |
|
Goodwill |
1,310 |
|
|
— |
|
Other
Noncurrent Assets |
461 |
|
|
508 |
|
Total
Assets |
$ |
21,476 |
|
|
$ |
21,011 |
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities |
|
|
|
Accounts
Payable - Trade |
$ |
1,161 |
|
|
$ |
736 |
|
Other
Current Liabilities |
578 |
|
|
742 |
|
Total
Current Liabilities |
1,739 |
|
|
1,478 |
|
Long-Term
Debt |
6,746 |
|
|
7,011 |
|
Deferred
Income Taxes |
1,127 |
|
|
1,819 |
|
Other
Noncurrent Liabilities |
1,245 |
|
|
1,103 |
|
Total
Liabilities |
10,857 |
|
|
11,411 |
|
Total
Shareholders' Equity |
9,936 |
|
|
9,288 |
|
Noncontrolling Interests(1) |
683 |
|
|
312 |
|
Total
Equity |
10,619 |
|
|
9,600 |
|
Total
Liabilities and Equity |
$ |
21,476 |
|
|
$ |
21,011 |
|
|
|
|
|
|
|
|
|
|
(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 interest 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
20, 2018. |
|
Schedule 3 |
Condensed Statement of Cash
Flows |
(in millions, unaudited) |
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
Net
Income (Loss) Including Noncontrolling Interests (1) |
$ |
516 |
|
|
$ |
(240 |
) |
|
$ |
(1,050 |
) |
|
$ |
(985 |
) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by
Operating Activities |
|
|
|
|
|
|
|
Depreciation, Depletion and Amortization |
499 |
|
|
595 |
|
|
2,053 |
|
|
2,454 |
|
Asset
Impairments |
63 |
|
|
92 |
|
|
70 |
|
|
92 |
|
Loss on
Marcellus Shale Upstream Divestiture |
53 |
|
|
— |
|
|
2,379 |
|
|
— |
|
Deferred
Income Tax Benefit |
(239 |
) |
|
(285 |
) |
|
(1,227 |
) |
|
(984 |
) |
Dry Hole
Cost |
7 |
|
|
474 |
|
|
9 |
|
|
579 |
|
Undeveloped Leasehold Impairment |
11 |
|
|
12 |
|
|
62 |
|
|
93 |
|
Loss
(Gain) on Extinguishment of Debt |
— |
|
|
— |
|
|
98 |
|
|
(80 |
) |
Loss
(Gain) on Commodity Derivative Instruments |
82 |
|
|
87 |
|
|
(63 |
) |
|
139 |
|
Net Cash
(Used) Received in Settlement of Commodity Derivative
Instruments |
(5 |
) |
|
114 |
|
|
13 |
|
|
569 |
|
Gain on
Divestitures |
(326 |
) |
|
(261 |
) |
|
(326 |
) |
|
(238 |
) |
Stock
Based Compensation |
21 |
|
|
16 |
|
|
104 |
|
|
77 |
|
Other
Adjustments for Noncash Items Included in Income |
(26 |
) |
|
(18 |
) |
|
(21 |
) |
|
95 |
|
Net
Changes in Working Capital |
(123 |
) |
|
(289 |
) |
|
(150 |
) |
|
(460 |
) |
Net Cash
Provided by Operating Activities |
533 |
|
|
297 |
|
|
1,951 |
|
|
1,351 |
|
Cash Flows From
Investing Activities |
|
|
|
|
|
|
|
Additions
to Property, Plant and Equipment |
(693 |
) |
|
(377 |
) |
|
(2,649 |
) |
|
(1,541 |
) |
Proceeds
from Divestitures |
916 |
|
|
455 |
|
|
2,073 |
|
|
1,241 |
|
Clayton
Williams Energy Acquisition |
— |
|
|
— |
|
|
(616 |
) |
|
— |
|
Other
Acquisitions |
— |
|
|
— |
|
|
(327 |
) |
|
— |
|
Other -
Investing |
(19 |
) |
|
(123 |
) |
|
(87 |
) |
|
(131 |
) |
Net Cash
Provided by (Used in) Investing Activities |
204 |
|
|
(45 |
) |
|
(1,606 |
) |
|
(431 |
) |
Cash Flows From
Financing Activities |
|
|
|
|
|
|
|
Dividends
Paid, Common Stock |
(49 |
) |
|
(43 |
) |
|
(190 |
) |
|
(172 |
) |
Proceeds
from Revolving Credit Facility |
— |
|
|
— |
|
|
1,585 |
|
|
— |
|
Repayment
of Credit Facility |
(45 |
) |
|
— |
|
|
(1,355 |
) |
|
— |
|
Repayment
of Clayton Williams Energy Long-term Debt |
— |
|
|
— |
|
|
(595 |
) |
|
— |
|
Repayment
of Term Loan Facility |
(550 |
) |
|
(850 |
) |
|
(550 |
) |
|
(850 |
) |
(Repayment) Proceeds from Long Term Debt, Net |
(18 |
) |
|
— |
|
|
(28 |
) |
|
17 |
|
Proceeds
from Noble Midstream Partners Revolving Credit Facility |
80 |
|
|
— |
|
|
325 |
|
|
— |
|
Issuance
of Noble Midstream Partners Common Units, Net of Offering
Costs |
(195 |
) |
|
— |
|
|
(240 |
) |
|
— |
|
Proceeds
from Noble Midstream Partners Revolving Credit Facility |
174 |
|
|
— |
|
|
312 |
|
|
299 |
|
Other -
Financing |
(23 |
) |
|
2 |
|
|
(114 |
) |
|
(62 |
) |
Net Cash Used
in Financing Activities |
(626 |
) |
|
(891 |
) |
|
(850 |
) |
|
(768 |
) |
Increase
(Decrease) in Cash and Cash Equivalents |
111 |
|
|
(639 |
) |
|
(505 |
) |
|
152 |
|
Cash and Cash
Equivalents at Beginning of Period |
564 |
|
|
1,819 |
|
|
1,180 |
|
|
1,028 |
|
Cash and Cash
Equivalents at End of Period |
$ |
675 |
|
|
$ |
1,180 |
|
|
$ |
675 |
|
|
$ |
1,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 quarter
and year ended December 31, 2017 and 2016, Net Income (Loss)
includes Net Income Attributable to Noncontrolling Interests in
NBLX. |
|
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
20, 2018. |
|
Schedule 4 |
Volume and Price Statistics |
(unaudited) |
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
Sales
Volumes |
2017 |
|
2016 |
|
2017 |
|
2016 |
Crude Oil and
Condensate (MBbl/d) |
|
|
|
|
|
|
|
United
States Onshore |
104 |
|
|
74 |
|
|
90 |
|
|
74 |
|
United
States Gulf of Mexico |
18 |
|
|
28 |
|
|
21 |
|
|
25 |
|
Equatorial Guinea |
17 |
|
|
27 |
|
|
18 |
|
|
26 |
|
Equity
Method Investee - Equatorial Guinea |
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
Total |
141 |
|
|
131 |
|
|
131 |
|
|
127 |
|
Natural Gas
Liquids (MBbl/d) |
|
|
|
|
|
|
|
United
States Onshore |
62 |
|
|
49 |
|
|
56 |
|
|
53 |
|
United
States Gulf of Mexico |
2 |
|
|
1 |
|
|
2 |
|
|
1 |
|
Equity
Method Investee - Equatorial Guinea |
6 |
|
|
6 |
|
|
6 |
|
|
5 |
|
Total |
70 |
|
|
56 |
|
|
64 |
|
|
59 |
|
Natural Gas
(MMcf/d) |
|
|
|
|
|
|
|
United
States Onshore |
494 |
|
|
784 |
|
|
586 |
|
|
861 |
|
United
States Gulf of Mexico |
22 |
|
|
32 |
|
|
21 |
|
|
20 |
|
Israel |
260 |
|
|
272 |
|
|
272 |
|
|
281 |
|
Equatorial Guinea |
236 |
|
|
250 |
|
|
239 |
|
|
235 |
|
Total |
1,012 |
|
|
1,338 |
|
|
1,118 |
|
|
1,397 |
|
Total Sales
Volumes (MBoe/d) |
|
|
|
|
|
|
|
United
States Onshore |
249 |
|
|
254 |
|
|
244 |
|
|
271 |
|
United
States Gulf of Mexico |
23 |
|
|
33 |
|
|
26 |
|
|
30 |
|
Israel |
44 |
|
|
46 |
|
|
46 |
|
|
47 |
|
Equatorial Guinea |
56 |
|
|
69 |
|
|
57 |
|
|
65 |
|
Equity
Method Investee - Equatorial Guinea |
8 |
|
|
8 |
|
|
8 |
|
|
7 |
|
Total
Sales Volumes (MBoe/d) |
380 |
|
|
410 |
|
|
381 |
|
|
420 |
|
|
|
|
|
|
|
|
|
Total
Sales Volumes (MBoe) |
34,946 |
|
|
37,726 |
|
|
139,050 |
|
|
153,540 |
|
|
|
|
|
|
|
|
|
Price
Statistics - Realized Prices(1) |
|
|
|
|
|
|
|
Crude Oil and
Condensate ($/Bbl) |
|
|
|
|
|
|
|
United
States Onshore |
$ |
53.83 |
|
|
$ |
46.69 |
|
|
$ |
48.88 |
|
|
$ |
39.46 |
|
United
States Gulf of Mexico |
58.08 |
|
|
45.52 |
|
|
50.05 |
|
|
39.99 |
|
Equatorial Guinea |
60.83 |
|
|
51.39 |
|
|
53.68 |
|
|
43.54 |
|
Natural Gas
Liquids ($/Bbl) |
|
|
|
|
|
|
|
United
States Onshore |
$ |
27.77 |
|
|
$ |
19.83 |
|
|
$ |
23.34 |
|
|
$ |
14.82 |
|
United
States Gulf of Mexico |
32.79 |
|
|
34.76 |
|
|
25.76 |
|
|
18.62 |
|
Natural Gas
($/Mcf) |
|
|
|
|
|
|
|
United
States Onshore |
$ |
2.87 |
|
|
$ |
2.45 |
|
|
$ |
3.02 |
|
|
$ |
2.10 |
|
United
States Gulf of Mexico |
3.09 |
|
|
2.93 |
|
|
3.16 |
|
|
2.58 |
|
Israel |
5.31 |
|
|
5.27 |
|
|
5.32 |
|
|
5.21 |
|
Equatorial Guinea |
0.27 |
|
|
0.27 |
|
|
0.27 |
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Average realized prices do not include gains or losses on commodity
derivative instruments. |
|
|
|
Schedule
5Reconciliation of Net Income (Loss) Attributable
to Noble Energy and Per Share (GAAP) toAdjusted
Income (Loss) Attributable to Noble Energy and Per Share
(Non-GAAP)(in millions, except per share amounts,
unaudited)
Adjusted income (loss) attributable to Noble
Energy and per share (Non-GAAP) should not be considered an
alternative to, or more meaningful than, net income (loss)
attributable to Noble Energy and per share (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 and per share (Non-GAAP) 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 and per share (Non-GAAP) may be useful for comparison
of earnings and per share to forecasts prepared by analysts and
other third parties. However, our presentation of adjusted income
(loss) attributable to Noble Energy and per share (Non-GAAP), may
not be comparable to similar measures of other companies in our
industry.
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Income
(Loss) Attributable to Noble Energy (GAAP) |
$ |
494 |
|
|
$ |
(252 |
) |
|
$ |
(1,118 |
) |
|
$ |
(998 |
) |
Adjustments to Net
Income (Loss) |
|
|
|
|
|
|
|
Loss on
Marcellus Shale Upstream Divestiture |
53 |
|
|
— |
|
|
2,379 |
|
|
— |
|
Loss
(Gain) on Commodity Derivative Instruments, Net of Cash
Settlements |
77 |
|
|
201 |
|
|
(50 |
) |
|
708 |
|
Leasehold
Impairment |
11 |
|
|
484 |
|
|
62 |
|
|
591 |
|
Gain on
Divestitures |
(324 |
) |
|
(261 |
) |
|
(326 |
) |
|
(238 |
) |
Clayton
Williams Energy Acquisition Expenses |
2 |
|
|
— |
|
|
100 |
|
|
— |
|
Asset
Impairments |
63 |
|
|
92 |
|
|
70 |
|
|
92 |
|
Other
Adjustments |
14 |
|
|
(3 |
) |
|
139 |
|
|
(21 |
) |
Total
Adjustments Before Tax |
(104 |
) |
|
513 |
|
|
2,374 |
|
|
1,132 |
|
Current
Income Tax Effect of Adjustments (1) |
— |
|
|
(66 |
) |
|
— |
|
|
45 |
|
Deferred
Income Tax Effect of Adjustments (1) |
36 |
|
|
(82 |
) |
|
(839 |
) |
|
(427 |
) |
Adjustments to Net
Income (Loss), After Tax |
$ |
(68 |
) |
|
$ |
365 |
|
|
$ |
1,535 |
|
|
$ |
750 |
|
Adjusted Income (Loss)
Attributable to Noble Energy (Non-GAAP), Before Tax Reform
Impact |
426 |
|
|
113 |
|
|
417 |
|
|
(248 |
) |
Tax Reform Impact
(2) |
(270 |
) |
|
— |
|
|
(270 |
) |
|
— |
|
Adjusted Income
(Loss) Attributable to Noble Energy (Non-GAAP) |
$ |
156 |
|
|
$ |
113 |
|
|
$ |
147 |
|
|
$ |
(248 |
) |
Net Income
(Loss) Attributable to Noble Energy Per Share, Basic and Diluted
(GAAP) |
$ |
1.01 |
|
|
$ |
(0.59 |
) |
|
$ |
(2.38 |
) |
|
$ |
(2.32 |
) |
Loss on
Marcellus Shale Upstream Divestiture |
0.11 |
|
|
— |
|
|
5.05 |
|
|
— |
|
Loss
(Gain) on Commodity Derivative Instruments, Net of Cash
Settlements |
0.16 |
|
|
0.46 |
|
|
(0.11 |
) |
|
1.65 |
|
Leasehold
Impairment |
0.02 |
|
|
1.13 |
|
|
0.13 |
|
|
1.37 |
|
Gain on
Divestitures |
(0.67 |
) |
|
(0.61 |
) |
|
(0.70 |
) |
|
(0.55 |
) |
Clayton
Williams Energy Acquisition Expenses |
— |
|
|
— |
|
|
0.21 |
|
|
— |
|
Asset
Impairments |
0.13 |
|
|
0.21 |
|
|
0.15 |
|
|
0.21 |
|
Other
Adjustments |
0.04 |
|
|
— |
|
|
0.32 |
|
|
(0.05 |
) |
Current
Income Tax Effect of Adjustments (1) |
— |
|
|
(0.15 |
) |
|
— |
|
|
0.10 |
|
Deferred
Income Tax Effect of Adjustments (1) |
0.07 |
|
|
(0.19 |
) |
|
(1.79 |
) |
|
(0.99 |
) |
Adjusted Income (Loss)
Attributable to Noble Energy Per Share, Diluted (Non-GAAP) |
$ |
0.87 |
|
|
$ |
0.26 |
|
|
$ |
0.88 |
|
|
$ |
(0.58 |
) |
Tax Reform Impact
(2) |
(0.55 |
) |
|
— |
|
|
(0.57 |
) |
|
— |
|
Adjusted Income
(Loss) Attributable to Noble Energy Per Share, Diluted
(Non-GAAP) |
0.32 |
|
|
0.26 |
|
|
0.31 |
|
|
(0.58 |
) |
Weighted Average Number
of Shares Outstanding, Basic |
487 |
|
|
430 |
|
|
469 |
|
|
430 |
|
Incremental Dilutive
Shares |
1 |
|
|
3 |
|
|
2 |
|
|
— |
|
Weighted Average Number
of Shares Outstanding, Diluted |
488 |
|
|
433 |
|
|
471 |
|
|
430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
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 and the change in the indefinite reinvestment assertion
related to accumulated undistributed earnings of foreign
subsidiaries. |
|
(2)
On December 22, 2017, U.S. Congress enacted the Tax Cuts and
Jobs Act (Tax Reform Legislation), making significant changes to
U.S. federal income tax law impacting us. Provisions of the Tax
Reform Legislation include, among others: a decrease in the federal
corporate tax rate to 21% beginning in 2018, a transition tax on a
one-time “deemed repatriation” of accumulated foreign earnings,
repeal and carryover of the corporate alternative minimum tax
(AMT), and a phase-down of the bonus depreciation percentage. There
is no significant near-term cash impact to Noble Energy resulting
from the new tax law. |
|
Schedule 6Reconciliation
of Net Income (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 income
(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 (Non-GAAP) 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 (Non-GAAP) may
be useful for comparison to forecasts prepared by analysts and
other third parties. However, our presentation of Adjusted EBITDAX
(Non-GAAP) may not be comparable to similar measures of other
companies in our industry.
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Income
(Loss) Attributable to Noble Energy (GAAP) |
$ |
494 |
|
|
$ |
(252 |
) |
|
$ |
(1,118 |
) |
|
$ |
(998 |
) |
Adjustments to Net Income (Loss), After Tax
(1) |
(338 |
) |
|
365 |
|
|
1,265 |
|
|
750 |
|
Adjusted Income
(Loss) Attributable to Noble Energy (Non-GAAP) |
156 |
|
|
113 |
|
|
147 |
|
|
(248 |
) |
|
|
|
|
|
|
|
|
Adjustments to Adjusted
Income (Loss) Attributable to Noble Energy |
|
|
|
|
|
|
|
Depreciation, Depletion, and Amortization |
499 |
|
|
595 |
|
|
2,053 |
|
|
2,454 |
|
Exploration Expense(2) |
41 |
|
|
65 |
|
|
126 |
|
|
334 |
|
Interest,
Net of Amount Capitalized |
83 |
|
|
86 |
|
|
354 |
|
|
328 |
|
Current
Income Tax Expense(3) |
15 |
|
|
50 |
|
|
86 |
|
|
152 |
|
Deferred
Income Tax Benefit(3) |
(5 |
) |
|
(203 |
) |
|
(118 |
) |
|
(557 |
) |
Adjusted
EBITDAX (Non-GAAP) |
$ |
789 |
|
|
$ |
706 |
|
|
$ |
2,648 |
|
|
$ |
2,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
See Schedule 5: Reconciliation of Net Income (Loss)
Attributable to Noble Energy (GAAP) to Adjusted Income (Loss)
Attributable to Noble Energy (Non-GAAP). |
(2)
Represents remaining Exploration Expense after reversal of
Adjustments to Net Income (Loss), After Tax, above. |
(3)
Represents remaining Income Tax Expense (Benefit) after
reversal of Adjustments to Net Income (Loss), After Tax,
above. |
|
Capital Expenditures |
(in millions, unaudited) |
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Organic Capital
Expenditures, Attributable to Noble Energy (Accrual Based) |
$ |
655 |
|
|
|
$ |
404 |
|
|
|
$ |
2,556 |
|
|
$ |
1,339 |
|
Marcellus Shale Acreage
Exchange Consideration |
— |
|
|
234 |
|
|
— |
|
|
234 |
|
Acquisition Capital
(4) |
2 |
|
|
— |
|
|
2,740 |
|
|
— |
|
NBLX Funded Capital
Expenditures (5) |
61 |
|
|
— |
|
|
294 |
|
|
— |
|
Increase in Capital
Lease Obligations |
— |
|
|
— |
|
|
— |
|
|
5 |
|
Total Reported
Capital Expenditures (Accrual Based) |
$ |
718 |
|
|
$ |
638 |
|
|
$ |
5,590 |
|
|
$ |
1,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
Acquisition costs for the three months ended December 31,
2017 include purchase price adjustments related to the Clayton
Williams Energy Acquisition. |
(5)
NBLX Funded Capital Expenditures for the twelve months ended
December 31, 2017 include capital related to Advantage
Pipeline. |
|
Schedule 7 |
Supplemental Data |
(in millions, unaudited) |
|
|
|
|
|
|
|
2017 Costs
Incurred in Oil and Gas Activities |
|
United States |
|
Int’l(1) |
|
Total |
|
|
|
|
|
|
|
Proved property
acquisition costs |
|
$ |
839 |
|
|
$ |
— |
|
|
$ |
839 |
|
Unproved property
acquisition costs |
|
1,817 |
|
|
— |
|
|
1,817 |
|
Exploration costs |
|
59 |
|
|
100 |
|
|
159 |
|
Development
costs(2) |
|
1,870 |
|
|
477 |
|
|
2,347 |
|
Total
costs incurred |
|
$ |
4,585 |
|
|
$ |
577 |
|
|
$ |
5,162 |
|
|
|
|
|
|
|
|
Reconciliation
to Capital Spending (accrual basis) |
|
|
|
|
|
|
Total costs
incurred |
|
|
|
|
|
$ |
5,162 |
|
Exploration overhead |
|
|
|
|
|
(76 |
) |
Lease
rentals |
|
|
|
|
|
(24 |
) |
Asset
retirement obligations |
|
|
|
|
|
39 |
|
Total oil and gas
spending |
|
|
|
|
|
5,101 |
|
Midstream
capital spending |
|
|
|
|
|
481 |
|
Investment in equity method investee |
|
|
|
|
|
68 |
|
Corporate
and other capital |
|
|
|
|
|
(60 |
) |
Total capital spending
(accrual basis) |
|
|
|
|
|
$ |
5,590 |
|
|
|
|
|
|
|
|
Proved
Reserves(3) |
|
United States |
|
Int’l(1) |
|
Total |
Total Barrel
Oil Equivalents (MMBoe) |
|
|
|
|
|
|
Beginning reserves -
December 31, 2016 |
|
976 |
|
|
461 |
|
|
1,437 |
|
Price-related revisions |
|
26 |
|
|
4 |
|
|
30 |
|
Other
non-price-related revisions |
|
56 |
|
|
49 |
|
|
105 |
|
Extensions, discoveries and other additions |
|
185 |
|
|
551 |
|
|
736 |
|
Purchase
of minerals in place |
|
57 |
|
|
— |
|
|
57 |
|
Sale of
minerals in place |
|
(261 |
) |
|
— |
|
|
(261 |
) |
Production |
|
(99 |
) |
|
(40 |
) |
|
(139 |
) |
Ending reserves -
December 31, 2017 |
|
940 |
|
|
1,025 |
|
|
1,965 |
|
Proved
Developed Reserves (MMBoe) |
|
|
|
|
|
|
December
31, 2016 |
|
554 |
|
|
397 |
|
|
951 |
|
December
31, 2017 |
|
458 |
|
|
410 |
|
|
868 |
|
|
|
|
|
|
|
|
|
|
|
(1)
International primarily includes Israel and Equatorial
Guinea. |
(2)
Includes decrease of $17 million in ARO costs due to
revisions for United States and excludes capital expenditures from
our midstream segment. |
(3)
Netherland, Sewell & Associates, Inc. performed a
reserves audit for 2017 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. |
Investor Contacts
Brad Whitmarsh
(281) 943-1670
Brad.Whitmarsh@nblenergy.com
Megan Dolezal
(281) 943-1861
Megan.Dolezal@nblenergy.com
Lauren Brown
(281) 872-3208
Lauren.Brown@nblenergy.com
Media Contacts
Reba Reid
(713) 412-8441
media@nblenergy.com
Paula Beasley
(281) 876-6133
media@nblenergy.com
Noble Energy (NYSE:NBL)
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