Noble Energy Provides Updated Outlook Through 2020 Focused on Cash Flow Growth and Shareholder Return
February 20 2018 - 7:10AM
Noble Energy, Inc. (NYSE:
NBL) (“Noble Energy” or the
“Company”) today provided an updated outlook through 2020,
including detailed guidance for 2018.
Outlook Through 2020
The Company provided an updated outlook through
2020, including scenarios at a $50 per barrel WTI oil price with $3
Henry Hub natural gas, as well as at recent strip pricing(1).
Key highlights and outcomes include:
- The Company expects to generate a cumulative total of $1.5
billion of excess cash flows(2) through 2020 in the $50 scenario,
and an additional $1.5 billion at strip pricing.
- Board-authorized $750 million share repurchase program and
current dividend payout will result in more than $1.3 billion in
direct shareholder return over the plan period.
- Capital expenditures are estimated to be approximately $2.8
billion annually through 2020 in both pricing scenarios, with no
changes in activity levels assumed. More than 80 percent of
total capital is planned for U.S. onshore assets and in excess of
15 percent will be allocated to the Eastern Mediterranean,
primarily for the Leviathan project.
- Estimated cash flow from operations is anticipated to grow at a
35 percent compound annual growth rate(3) in the $50 scenario and
40 percent at strip pricing as compared to 2017.
- Estimated volumes are anticipated to grow to approximately 525
thousand barrels of oil equivalent per day (MBoe/d) in 2020, a 20
percent compound annual growth rate(3) from 2017. Oil volumes
grow at more than a 25 percent compound annual growth rate(3).
- Type curves in near-term development areas have been increased
by an average of 25 percent in the DJ Basin and 15 percent in the
Delaware Basin. As compared to the Company’s January 2017
plan, increased productivity has led to similar anticipated
production growth for the Texas and Colorado assets with $500
million less in expected capital expenditures through 2020.
- Leverage (net debt to EBITDA(4)) is anticipated to be reduced
below 1.5 times in 2020 in the $50 scenario, or in 2019 in the
strip pricing scenario.
David L. Stover, Noble Energy's Chairman,
President and CEO, commented, "The transformative portfolio
repositioning we have executed over the last several years, along
with increased capital efficiency and enhanced well productivity,
has positioned Noble Energy to deliver attractive multi-year volume
growth and even more attractive cash flow growth. Today’s
updated outlook demonstrates the Company’s high-quality portfolio,
operational excellence and financial strength, which will drive
top-tier, debt-adjusted per share growth and create substantial
value for our shareholders in 2018 and beyond.”
Mr. Stover continued, “The combination of our
recently-announced share repurchase program and current dividend is
expected to return over $1.3 billion to shareholders over the next
three years. With substantial cash flow growth, we anticipate
additional return to shareholders through future dividend
growth. The strength of our Company extends well beyond
2020. The high-quality nature and depth of our investment
opportunities across our U.S. onshore and Eastern Mediterranean
assets, combined with superior operational execution and financial
strength, provide a differential long-term value proposition for
our shareholders.”
2018 Guidance Key highlights and outcomes
include:
- Capital expenditures are expected to total between $2.7 and
$2.9 billion, with nearly 70 percent allocated to the U.S. onshore
program and over 25 percent to the Eastern
Mediterranean.
- Full-year sales volumes, at the midpoint of the Company’s
expected range, are approximately 12 percent higher than
2017(3).
- U.S. onshore volumes are expected to increase more than 20
percent(3) and U.S. onshore oil volumes are anticipated to be up
nearly 30 percent(3) with upstream capital investments essentially
flat to 2017 levels.
For 2018, U.S. onshore upstream capital
investments are expected to be approximately $1.8 billion at the
midpoint of the Company’s annual range. Noble Energy plans to
invest approximately $165 million for midstream
infrastructure buildout. In the Eastern Mediterranean, the
Company’s expected capital expenditures are $750 million to
progress the Leviathan development towards first production late
next year. The remaining $85 million is primarily
related to exploration.
Full-year 2018 reported sales volumes are
expected to average between 343 and 353 MBoe/d. The 2018
expected volume range is consistent with the Company’s prior plan
outlined in January 2017, after adjusting for divestments.
Noble Energy has provided a divestment-adjusted volumes table
reflecting the impact for all transactions in 2017 and 2018 in the
appendix of the Company’s Multi-year Outlook presentation
deck.
The Company expects to average nine operated
onshore rigs throughout 2018 (1.5 DJ Basin, 6 Delaware Basin, and
1.5 Eagle Ford Shale), with approximately 200 operated wells across
the U.S. onshore business anticipated to commence production.
The majority of the U.S. onshore growth will be driven by the
Delaware Basin development program, which should result in Delaware
Basin production growth and U.S. onshore oil growth every
quarter. Full-year Eagle Ford Shale volumes are expected to
be similar to full year 2017 volumes, although decline is expected
through 2018. In the DJ Basin, production in the second half
of 2018 is expected to be higher than the first half of the year,
reflecting third-party gas processing expansion and Mustang
development.
Gross sales volumes at Tamar are anticipated to
increase slightly from 2017. Reported net volumes in Israel
are anticipated to be slightly lower than 2017, reflecting the
Tamar 7.5 percent working interest divestiture, which is
anticipated to close late in the first quarter of 2018. The
divestment of the Gulf of Mexico assets announced early in 2018 is
anticipated to close in the second quarter of 2018. West
Africa volumes are lower by approximately 20 percent.
First quarter volumes are anticipated to be
between 358 MBoe/d and 368 MBoe/d. As compared to the fourth
quarter 2017, first quarter volumes are anticipated lower by 11
MBoe/d due to the impact of divestitures in the U.S. onshore (8
MBoe/d) and the previously announced divestiture of Tamar (3
MBoe/d). First quarter 2018 West Africa volumes are lower due
to maintenance downtime at the Alba field. Additional
full-year and first quarter 2018 guidance details are available in
the Multi-year Outlook presentation deck provided on the
‘Investors’ page of the Company’s website, www.nblenergy.com.
(1) Strip pricing as of
the end of January 2018. |
(2) Excess cash flow is
defined as GAAP cash flow from operations plus anticipated
portfolio proceeds less capital investments less
dividends/distributions. |
(3) Pro forma for asset
divestments. |
(4) GAAP earnings
before interest, taxes, depreciation, depletion and
amortization. |
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.
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
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