Noble Energy Announces Asset Sale to NBLX and IDR Simplification
November 15 2019 - 7:00AM
Business Wire
Concludes Strategic Review of Midstream
Business
Noble Energy, Inc. (NYSE: NBL) (“Noble Energy” or “the
Company”) today announced the conclusion of its midstream strategic
review, having elected to retain and increase its ownership in
Noble Midstream Partners LP (NYSE: NBLX). The review was concluded
with the sale of essentially all of the Company’s remaining U.S.
onshore midstream interests and assets to NBLX and the elimination
of the Company’s Incentive Distribution Rights (“IDRs”) for a total
value of $1.6 billion.
In concluding the midstream strategic review, the Company
identified the following primary drivers for retaining its
ownership in NBLX:
- Supports focus on delivering sustainable, long-term free cash
flow for Noble Energy shareholders;
- Enhances corporate returns through high-return midstream
investments, including gathering and processing, intermediate and
long-haul pipeline; and
- Preserves operational synergies and control of in-basin
gathering in core U.S. onshore development areas of the DJ and
Delaware Basins.
David L. Stover, the Company’s Chairman and CEO, commented: “The
transaction announced today highlights significant midstream value
within Noble Energy, while simplifying the structure of Noble
Midstream. Retaining ownership of these assets through the NBLX
structure enhances our business with steady and growing cash flow
with lesser volatility from commodity prices. Noble Midstream will
continue to play a critical role in Noble Energy’s execution and
capital-efficient development onshore, where we have a deep
inventory of high-return upstream investment opportunities.”
Noble Energy is receiving $1.6 billion in consideration from the
transaction, including an estimated $670 million in cash and 38.5
million of newly issued common units of NBLX valued at $930 million
based upon a 30-day volume weighted average price as of November 6,
2019. Following the close of the transaction, Noble Energy will own
56.5 million units or approximately 63% of the outstanding units of
NBLX.
As part of the transaction, the Company has divested its
remaining midstream gathering interests to NBLX, including the
following:
- A 60% working interest in the Delaware Basin gathering system,
which services crude oil, natural gas, and water gathering;
- A 75% working interest in the Mustang area (DJ Basin) gathering
system, which services crude oil, natural gas, and water gathering,
along with freshwater delivery;
- A 75% working interest in the East Pony area (DJ Basin)
gathering system, which services freshwater delivery; and
- A 100% working interest in the East Pony area (DJ Basin)
natural gas gathering and processing system.
NBLX now owns 100% of the interest in the above gathering
systems. Noble Energy estimates the earnings before interest,
taxes, depreciation, depletion and amortization (“EBITDA”) for the
assets sold to be approximately $160 million for 2020. In addition,
the Company estimates its IDRs divested would have resulted in
total IDR distribution to Noble Energy in 2020 of approximately $40
million.
The Company will have a 180-day lock up period applicable to its
common units in NBLX following the closing of the transaction. In
addition, the Company will retain ownership and control of the
General Partner of NBLX.
Noble Energy (NYSE: NBL) is an independent oil and
natural gas exploration and production company committed to meeting
the world’s growing energy needs and delivering leading returns to
shareholders. The Company operates a high-quality portfolio of
assets onshore in the United States and offshore in the Eastern
Mediterranean and off the west coast of Africa. Founded more than
85 years ago, Noble Energy is guided by its values, its commitment
to safety, and respect for stakeholders, communities and the
environment. For more information on how the Company fulfills its
purpose: Energizing the World, Bettering People’s Lives®, visit
https://www.nblenergy.com.
This news release contains certain "forward-looking statements"
within the meaning of federal securities laws. Words such as
"anticipates", “plans”, “estimates”, "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, 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 report on Form 10-K, quarterly report
on Form 10-Q, and in other Noble Energy reports on file with the
Securities and Exchange Commission. 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 forward-looking 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. Management cannot reliably
predict certain of the necessary components of the most directly
comparable forward-looking GAAP measures. Accordingly, Noble Energy
is unable to present a quantitative reconciliation of the
aforementioned forward-looking non-GAAP financial measure. Amounts
excluded from these non-GAAP measures in future periods could be
significant.
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version on businesswire.com: https://www.businesswire.com/news/home/20191115005076/en/
Investor Contacts Brad Whitmarsh (281) 943-1670
Brad.Whitmarsh@nblenergy.com
Kim Hendrix (281) 943-2197 Kim.Hendrix@nblenergy.com
Media Contacts Trudi Boyd (281) 569-8009
media@nblenergy.com
Paula Beasley (281) 876-6133 media@nblenergy.com
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