Exhibit 99.1
NEWS RELEASE | ||
100 Glenborough Drive | Contact: Greg Panagos: 281-872-3125 | |
Suite 100 | Investor_Relations@nobleenergyinc.com | |
Houston, TX 77067 |
NOBLE ENERGY ANNOUNCES FIRST QUARTER 2007 RESULTS
HOUSTON(May 3, 2007) — Noble Energy, Inc. (NYSE:NBL) today reported first quarter 2007 net income of $211.8 million, or $1.24 per basic share. Discretionary cash flow (non-GAAP measure, see Schedule 3 — Determination of Discretionary Cash Flow and Reconciliation) for the first quarter was $448.3 million. Net cash provided by operating activities was $422.3 million. Capital expenditures for the quarter totaled $284.3 million.
Noteworthy items for the first quarter 2007 include:
• | First crude oil production from the Dumbarton development in the U.K. sector of the North Sea | ||
• | Successful appraisal of the Flyndre prospect in the U.K. sector of the North Sea | ||
• | Net production in Israel increased 25 percent to 103 million cubic feet per day (MMcfpd) | ||
• | Completed the Mari-B #7 development well in Israel with gross deliverability in excess of 180 MMcfpd | ||
• | Completed the $500 million common stock buyback program, resulting in a total of 10.4 million shares acquired at an average price of $48.17 per share | ||
• | Severe winter weather onshore North America caused temporary production shut-ins of approximately 7,000 barrels of oil equivalent per day (Boepd) |
First quarter 2007 results included deferred compensation expense of $11.6 million pretax ($7.2 million after tax). Excluding the effects of deferred compensation, first quarter adjusted net income (a non-GAAP measure) would have been $219.0 million, or $1.28 per basic share (see Note 1 below).
Charles D. Davidson, the company’s Chairman, President and CEO, said, “The excellent first quarter 2007 financial and operating results from Noble Energy reflect strong contributions from all of our programs including North America, West Africa, Europe, the Middle East, South America and Asia. Despite the severe winter weather impacts we experienced in the Rocky Mountains during the quarter, our diversified portfolio enabled us to produce solid earnings per share and cash flow. With North America now at full production and our Dumbarton development on line, we are well positioned to continue delivering solid results for our shareholders throughout 2007 and for the long-term.”
First quarter 2007 production was 187,588 Boepd, an increase of 4.5 percent compared to 179,554 Boepd for the same period last year. During the first quarter 2007, severe winter weather in the Rocky Mountains cost the company approximately 7,000 Boepd of production in North America. Excluding the effects of severe weather, first quarter 2007 production would have been approximately 194,500 Boepd. In addition, first quarter 2006 production included approximately 18,400 Boepd from the Gulf of Mexico shelf assets, which were sold in 2006. Excluding the effects of severe weather, and adjusting for the Gulf of Mexico shelf assets sale, first quarter 2007 production would have increased approximately 20 percent compared to the same period last year on a pro forma basis. Daily production during the first quarter exceeded sales volumes by 5,454 Boepd, primarily because of the timing of liftings in Equatorial Guinea.
NORTH AMERICA
North America reported pre-tax operating income for the first quarter of $217.5 million, an increase of $16.1 million, or eight percent, compared to operating income of $201.4 million for the first quarter last year.
North America production was 113,622 Boepd in the first quarter 2007 compared to 114,296 for first quarter last year. The decline in production compared to last year was the result of severe winter weather and the Gulf of Mexico shelf asset sale, offset by production growth in the company’s core D-J basin and deepwater Gulf of Mexico areas.
Operations benefited from higher realized prices during the quarter. The average liquids price was $46.42 per Bbl compared to $42.20 per Bbl during the first quarter of 2006. The average realized natural gas price was $8.24 per Mcf compared to $6.96 per Mcf last year. Oil and gas revenues were positively impacted by $51.0 million attributable to previously recognized losses for hedge contracts that were re-designated concurrent with the 2006 Gulf of Mexico shelf asset sale (see Schedule 6 — Impact of Loss Associated with Gulf of Mexico Shelf Asset Sale).
During the first quarter, the company had 20 drilling rigs running onshore (10 in the Rocky Mountains, six in the Mid-continent and four in the Gulf Coast) and 50 workover rigs (34 in the Rocky Mountains, 10 in the Mid-continent and six in the Gulf Coast). During 2007, Noble Energy plans to drill 1,072 gross onshore wells, of which 36 will be in the Gulf Coast, 878 will be in the Rocky Mountains and 158 will be in the Mid-continent. The company also plans to complete 427 refrac, trifrac, deepening and recompletion gross projects in 2007, most of which will be in the Wattenberg field.
INTERNATIONAL OPERATIONS
International operations reported operating income for the first quarter of $154.2 million compared to $211.3 million in the first quarter last year. Lower first quarter 2007 international operating income resulted primarily from a 3,644 Boepd decline in sales volumes to 68,513 Boepd from 72,157 Boepd last year. The decline in sales volumes was due to the timing of liftings in Equatorial Guinea, partially offset by increased North Sea sales from Dumbarton.
First quarter 2007 international production was 73,966 Boepd, an increase of 13 percent, compared to 65,257 Boepd for the first quarter of 2006. The increase in international production was primarily due to the startup of the Dumbarton development in the North Sea and increased natural gas sales in Israel.
West Africa
Total operating income in Equatorial Guinea for the first quarter was $83.4 million compared to $147.9 million for the same period last year. The decline in operating income resulted from lower sales volumes, which declined 12,007 Boepd compared to the first quarter last year due to over-lifting production in that quarter versus under-lifting in the most recent quarter. Production was comparable during both periods.
Total operating income in Equatorial Guinea for the first quarter was $83.4 million compared to $147.9 million for the same period last year. The decline in operating income resulted from lower sales volumes, which declined 12,007 Boepd compared to the first quarter last year due to over-lifting production in that quarter versus under-lifting in the most recent quarter. Production was comparable during both periods.
Alba field condensate and natural gas sales (exclusive of Alba Plant, LLC and methanol operations) accounted for $37.9 million, or 45 percent, of operating income from Equatorial Guinea. Included in the West Africa results was $15.8 of pretax dry hole expense associated with the Adriana Southwest exploration well. Alba Plant LLC reported $20.8 million of income from LPG and condensate sales, net to Noble Energy’s interest, compared to $27.1 million for the first quarter 2006. The decrease in operating income for Alba Plant LLC reflects lower plant sales and lower realized prices.
Income from methanol operations nearly doubled to $24.8 million, net to Noble Energy’s interest, compared to $12.5 million during the first quarter 2006. The company’s share of methanol sales volumes was 39.7 million gallons compared to the previous year’s 34.1 million gallons. Last year’s first quarter sales were below normal levels due to an inventory buildup in preparation for a plant turnaround. First quarter realized methanol prices were a record $1.22 per gallon, compared to 82 cents per gallon for the same period last year.
North Sea
In the North Sea, operating income for the first quarter of 2007 was $32.2 million compared to $25.7 million the previous year, resulting primarily from higher crude sales due to the start up of the Dumbarton development. Dumbarton commenced production in late January 2007 with production expected to average 9,000 Boepd, net, during the year.
In the North Sea, operating income for the first quarter of 2007 was $32.2 million compared to $25.7 million the previous year, resulting primarily from higher crude sales due to the start up of the Dumbarton development. Dumbarton commenced production in late January 2007 with production expected to average 9,000 Boepd, net, during the year.
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During the first quarter 2007, Noble Energy was awarded two new licenses in the Norwegian sector of the North Sea. Both licenses are non-operated and were the result of successful applications in Norway’s APA 2006 bid round. One exploration well is expected to be drilled in 2008.
Israel
First quarter operating income was $19.7 million compared to $14.7 million for the same period in 2006. Natural gas sales, net to Noble Energy, averaged 103.1 MMcfpd for the first quarter 2007, compared to 82.6 MMcfpd the previous year. The increased natural gas sales volumes reflect increased seasonal demand for electricity and a full quarter of sales to Israeli Electric Company’s Reading power plant in Tel Aviv.
First quarter operating income was $19.7 million compared to $14.7 million for the same period in 2006. Natural gas sales, net to Noble Energy, averaged 103.1 MMcfpd for the first quarter 2007, compared to 82.6 MMcfpd the previous year. The increased natural gas sales volumes reflect increased seasonal demand for electricity and a full quarter of sales to Israeli Electric Company’s Reading power plant in Tel Aviv.
Argentina, China, Ecuador and Suriname
Argentina, China, Ecuador and Suriname combined recorded first quarter 2007 operating income of $18.9 million compared to $23.0 million for first quarter last year.
Argentina, China, Ecuador and Suriname combined recorded first quarter 2007 operating income of $18.9 million compared to $23.0 million for first quarter last year.
In China, first quarter operating income was $10.6 million. Net production in China averaged 4,195 barrels of oil per day for the first quarter. In Argentina, first quarter operating income was $2.7 million, and net production averaged 3,064 Boepd.
The Machala power plant reported operating income of $7.1 million for the first quarter. For the quarter, 266,648 megawatt-hours were produced at an average price of 8.7 cents per kilowatt-hour.
Note1 — Adjusted net income should not be considered a substitute for net income as reported in accordance with GAAP. Noble Energy is providing adjusted net income for comparison purposes to prior periods and to earnings forecasts prepared by analysts and other third parties. Management believes and certain investors may find that adjusted net income is beneficial in evaluating Noble Energy’s financial performance.
Noble Energy is one of the nation’s leading independent energy companies and operates throughout major basins in the United States including Colorado’s Wattenberg Field, the Mid-continent region of western Oklahoma and the Texas Panhandle, the San Juan Basin in New Mexico, the Gulf Coast and the Gulf of Mexico. In addition, Noble Energy operates internationally in Argentina, China, Ecuador, the Mediterranean Sea, the North Sea, West Africa and Suriname. Noble Energy markets natural gas and crude oil through its subsidiary, Noble Energy Marketing, Inc. Visit Noble Energy online atwww.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. Important factors that could cause the actual results to differ materially from those projected include, without limitation, the volatility in commodity prices for oil and 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. The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves. We may use certain terms in this press release, such as “resources,” “estimated resource range,” “resource potential” and “potential resources,” that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our Forms 10-K and 10-Q, File No. 1-07964, available from Noble Energy’s offices or website,www.nobleenergyinc.com. These forms can also be obtained from the SEC by calling 1-800-SEC-0330.
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Schedule 1
Noble Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Noble Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
Revenues | ||||||||
Oil and gas sales | $ | 667,042 | $ | 646,252 | ||||
Income from equity method investments | 45,563 | 39,650 | ||||||
Other revenues | 29,940 | 26,095 | ||||||
Total Revenues | 742,545 | 711,997 | ||||||
Costs and Expenses | ||||||||
Lease operating costs | 78,875 | 82,193 | ||||||
Production and ad valorem taxes | 25,167 | 25,453 | ||||||
Transportation costs | 11,034 | 5,061 | ||||||
Exploration costs | 45,241 | 32,022 | ||||||
Depreciation, depletion and amortization | 163,960 | 124,465 | ||||||
General and administrative | 45,089 | 35,398 | ||||||
Accretion of discount on asset retirement obligations | 2,387 | 3,318 | ||||||
Interest, net of amount capitalized | 26,872 | 33,168 | ||||||
Other expense, net | 40,068 | 21,566 | ||||||
Total Costs and Expenses | 438,693 | 362,644 | ||||||
Income Before Taxes | 303,852 | 349,353 | ||||||
Income Tax Provision | 92,040 | 123,266 | ||||||
Net Income | $ | 211,812 | $ | 226,087 | ||||
Earnings Per Share | ||||||||
Basic | $ | 1.24 | $ | 1.28 | ||||
Diluted | $ | 1.22 | $ | 1.26 | ||||
Weighted average number of shares outstanding | ||||||||
Basic | 170,844 | 176,136 | ||||||
Diluted | 173,043 | 180,099 |
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Schedule 2
Noble Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, Except Share Amounts)
Noble Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, Except Share Amounts)
(Unaudited) | ||||||||
March 31, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 249,219 | $ | 153,408 | ||||
Accounts receivable — trade, net | 633,250 | 586,882 | ||||||
Probable insurance claims | 72,160 | 101,233 | ||||||
Deferred income taxes | 51,247 | 99,835 | ||||||
Other current assets | 89,333 | 127,188 | ||||||
Total current assets | 1,095,209 | 1,068,546 | ||||||
Property, plant and equipment | ||||||||
Oil and gas properties (successful efforts method of accounting) | 9,114,554 | 8,867,639 | ||||||
Other property, plant and equipment | 81,535 | 79,646 | ||||||
9,196,089 | 8,947,285 | |||||||
Accumulated depreciation, depletion and amortization | (1,936,758 | ) | (1,776,528 | ) | ||||
Total property, plant and equipment, net | 7,259,331 | 7,170,757 | ||||||
Other noncurrent assets | 579,437 | 568,032 | ||||||
Goodwill | 767,214 | 781,290 | ||||||
Total Assets | $ | 9,701,191 | $ | 9,588,625 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable — trade | $ | 530,290 | $ | 518,609 | ||||
Derivative instruments | 330,586 | 254,625 | ||||||
Income taxes | 134,698 | 107,136 | ||||||
Short-term borrowings | 100,000 | — | ||||||
Asset retirement obligations | 31,204 | 68,500 | ||||||
Other current liabilities | 188,641 | 235,392 | ||||||
Total current liabilities | 1,315,419 | 1,184,262 | ||||||
Deferred income taxes | 1,704,274 | 1,758,452 | ||||||
Asset retirement obligations | 120,884 | 127,689 | ||||||
Derivative instruments | 293,150 | 328,875 | ||||||
Other noncurrent liabilities | 300,069 | 274,720 | ||||||
Long-term debt | 1,800,879 | 1,800,810 | ||||||
Total Liabilities | 5,534,675 | 5,474,808 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Preferred stock — par value $1.00; 4,000,000 shares authorized, none issued | — | — | ||||||
Common stock — par value $3.33 1/3; 250,000,000 shares authorized; 190,103,659 and 188,808,087 shares issued, respectively | 633,681 | 629,360 | ||||||
Capital in excess of par value | 2,063,018 | 2,041,048 | ||||||
Accumulated other comprehensive loss | (211,436 | ) | (140,509 | ) | ||||
Treasury stock, at cost: 18,580,865 and 16,574,384 shares, respectively | (612,976 | ) | (511,443 | ) | ||||
Retained earnings | 2,294,229 | 2,095,361 | ||||||
Total Shareholders’ Equity | 4,166,516 | 4,113,817 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 9,701,191 | $ | 9,588,625 | ||||
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Schedule 3
Noble Energy, Inc. and Subsidiaries
Discretionary Cash Flow and Reconciliation to Operating Cash Flow
(In Thousands)
(Unaudited)
Noble Energy, Inc. and Subsidiaries
Discretionary Cash Flow and Reconciliation to Operating Cash Flow
(In Thousands)
(Unaudited)
Three Months Ended | ||||||||
3/31/2007 | 3/31/2006 | |||||||
Net income | $ | 211,812 | $ | 226,087 | ||||
Adjustments to reconcile net income to discretionary cash flow: | ||||||||
Depreciation, depletion and amortization — oil and gas production | 163,960 | 124,465 | ||||||
Depreciation, depletion and amortization — electricity generation | 3,472 | 4,151 | ||||||
Exploration costs | 45,241 | 32,022 | ||||||
Interest capitalized | (3,649 | ) | (1,455 | ) | ||||
Income from equity method investments | (45,563 | ) | (39,650 | ) | ||||
Distributions and dividends from equity method investees | 52,693 | 56,023 | ||||||
Deferred compensation adjustment | 11,649 | 9,176 | ||||||
Deferred income taxes | 47,720 | 55,460 | ||||||
Accretion of discount on asset retirement obligations | 2,387 | 3,318 | ||||||
Allowance for doubtful accounts | 4,682 | — | ||||||
Stock-based compensation expense | 5,447 | 3,154 | ||||||
(Gain) loss on derivative instruments[1] | (52,035 | ) | 30,686 | |||||
Other, net | 494 | 581 | ||||||
Discretionary Cash Flow [2] | 448,310 | 504,018 | ||||||
Reconciliation to Operating Cash Flows: | ||||||||
Net changes in working capital | (4,090 | ) | 83,678 | |||||
Cash exploration costs | (25,006 | ) | (19,148 | ) | ||||
Capitalized interest | 3,649 | 1,455 | ||||||
Distributions from equity method investees | — | (47,023 | ) | |||||
(Gain) Loss on disposal of assets | (5,152 | ) | — | |||||
Other adjustments to reconcile discretionary cash flow to operating cash flows | 4,609 | 4,529 | ||||||
Net Cash Provided by Operating Activities | $ | 422,320 | $ | 527,509 | ||||
[1] | Includes $51,029 related to hedge contracts that were re-designated at the time of the Gulf of Mexico Shelf Asset Sale and settled during first quarter 2007. See Schedule 6 — PreTax Cash Flow Hedges Earnings Impact. | |
[2] | 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, management believes it is a good tool for internal use and the investment community in evaluating the Company’s overall financial performance. Among management, professional research analysts, portfolio managers and investors following the oil and gas industry, 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. |
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Schedule 4
Noble Energy, Inc
Income Before Income Taxes
(Dollars in thousands, except realized prices)
(Unaudited)
Noble Energy, Inc
Income Before Income Taxes
(Dollars in thousands, except realized prices)
(Unaudited)
Three Months Ended 3/31/07
North | West | North | Other | Corporate | |||||||||||||||||||||||||||||||||||||||||||
Consolidated | America | Africa | Sea | Israel | Int'l | [1] | & Other | [2] | |||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Oil sales | $ | 333,145 | $ | 190,400 | $ | 61,941 | $ | 51,274 | $ | — | $ | 29,530 | $ | — | |||||||||||||||||||||||||||||||||
Gas sales | 333,896 | 302,835 | 1,796 | [3] | 3,887 | 25,375 | 3 | — | |||||||||||||||||||||||||||||||||||||||
Equity investee liquids sales | — | — | 28,096 | — | — | — | (28,096 | ) | |||||||||||||||||||||||||||||||||||||||
Equity investee methanol sales | — | — | 48,291 | — | — | — | (48,291 | ) | |||||||||||||||||||||||||||||||||||||||
Gathering, marketing and processing | 6,716 | — | — | — | — | — | 6,716 | ||||||||||||||||||||||||||||||||||||||||
Electricity sales | 23,225 | — | — | — | — | 23,225 | — | ||||||||||||||||||||||||||||||||||||||||
Income from equity method investments | 45,563 | — | — | — | — | — | 45,563 | ||||||||||||||||||||||||||||||||||||||||
Total Revenues | 742,545 | 493,235 | 140,124 | 55,161 | 25,375 | 52,758 | (24,108 | ) | |||||||||||||||||||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Oil and gas operating costs | 74,920 | 55,165 | 6,691 | 6,060 | 2,136 | 4,720 | 148 | ||||||||||||||||||||||||||||||||||||||||
Workover and repair expense | 3,955 | 3,829 | [7] | — | — | — | 126 | — | |||||||||||||||||||||||||||||||||||||||
Production and ad valorem taxes | 25,167 | 20,467 | — | — | — | 4,538 | 162 | ||||||||||||||||||||||||||||||||||||||||
Transportation | 11,034 | 7,798 | — | 2,474 | — | 762 | — | ||||||||||||||||||||||||||||||||||||||||
Oil and gas exploration | 45,241 | 23,165 | 16,768 | 1,555 | 178 | 842 | 2,733 | ||||||||||||||||||||||||||||||||||||||||
Gathering, marketing and processing | 5,016 | — | — | — | — | — | 5,016 | ||||||||||||||||||||||||||||||||||||||||
Equity investee liquids expense | — | — | 7,286 | — | — | — | (7,286 | ) | |||||||||||||||||||||||||||||||||||||||
Equity investee methanol expense | — | — | 23,538 | — | — | — | (23,538 | ) | |||||||||||||||||||||||||||||||||||||||
Electricity generation | 16,093 | — | — | — | — | 16,093 | — | ||||||||||||||||||||||||||||||||||||||||
DD&A | 163,960 | 137,821 | 3,242 | 11,655 | 3,711 | 5,862 | 1,669 | ||||||||||||||||||||||||||||||||||||||||
Impairment of operating assets | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
General and administrative | 45,089 | 16,692 | 561 | 1,190 | 14 | 533 | 26,099 | ||||||||||||||||||||||||||||||||||||||||
Accretion expense | 2,387 | 1,871 | 26 | 336 | 112 | 42 | — | ||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 26,872 | — | — | — | — | — | 26,872 | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation | 11,649 | — | — | — | — | — | 11,649 | ||||||||||||||||||||||||||||||||||||||||
(Gain) loss on derivative instruments | (1,005 | ) | (1,005 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Loss on involuntary conversion | 13,115 | 13,115 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
(Gain) loss on sale of assets | (5,152 | ) | (5,226 | ) | — | — | 74 | — | — | ||||||||||||||||||||||||||||||||||||||
Other expense (income), net | 352 | 2,036 | (1,434 | ) | (270 | ) | (532 | ) | 313 | 239 | |||||||||||||||||||||||||||||||||||||
Total Costs and Expenses | 438,693 | 275,728 | 56,678 | 23,000 | 5,693 | 33,831 | 43,763 | ||||||||||||||||||||||||||||||||||||||||
Operating Income (Loss) | $ | 303,852 | $ | 217,507 | $ | 83,446 | $ | 32,161 | $ | 19,682 | $ | 18,927 | $ | (67,871 | ) | ||||||||||||||||||||||||||||||||
Key Statistics | |||||||||||||||||||||||||||||||||||||||||||||||
Sales Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids (Bopd) | 74,427 | 45,576 | 12,236 | 9,362 | — | 7,253 | — | ||||||||||||||||||||||||||||||||||||||||
Natural Gas (Mcfpd) | 604,161 | 408,275 | 55,289 | [3] | 7,170 | 103,115 | 30,312 | [6] | — | ||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids (Bpd) | 7,014 | — | 7,014 | [4] | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Equity Investee Methanol (Kgal) | 39,692 | — | 39,692 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Production Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids (Bopd) | 78,691 | 45,576 | 16,250 | 9,319 | — | 7,546 | — | ||||||||||||||||||||||||||||||||||||||||
Natural Gas (Mcfpd) | 604,161 | 408,275 | 55,289 | 7,170 | 103,115 | 30,312 | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids (Bpd) | 8,203 | — | 8,203 | [5] | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Total Production Boepd | [8] | 187,588 | 113,622 | 33,668 | 10,514 | 17,186 | 12,598 | — | |||||||||||||||||||||||||||||||||||||||
Average Realized Price | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids | $ | 49.73 | $ | 46.42 | $ | 56.25 | $ | 60.85 | $ | — | $ | 45.24 | $ | — | |||||||||||||||||||||||||||||||||
Natural Gas | 6.46 | 8.24 | 0.36 | 6.02 | 2.73 | 1.00 | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids | 44.51 | — | 44.51 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Methanol | 1.22 | — | 1.22 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
[1] | Other international includes operations in Argentina, China, Ecuador and Suriname. | |
[2] | Corporate and Other includes corporate overhead, intercompany eliminations and marketing. | |
[3] | Natural gas in Equatorial Guinea is under contract for $0.25 per MMBTU through 2026 to a methanol plant and an LPG plant. Both of these plants are owned by affiliated entities accounted for under the equity method of accounting. Beginning in 2006, the price on an Mcf basis has been adjusted to reflect the Btu content. | |
[4] | Equity Investee LPG volumes include condensate and natural gas liquids of 1,835 Bpd and 5,179 Bpd, respectively. These volumes are included in West Africa production and LPG sales revenue. | |
[5] | Equity Investee LPG volumes include condensate and natural gas liquids of 1,918 Bpd and 6,285 Bpd, respectively. | |
[6] | Ecuador natural gas volumes are included in Other International and Consolidated production, but are not included in natural gas sales revenue for either. Because the gas-to-power project in Ecuador is 100 percent owned by Noble Energy, intercompany natural gas sales are eliminated for accounting purposes. | |
[7] | Hurricane related repair expense was de minimus for first quarter 2007. | |
[8] | Barrels of oil equivalent for natural gas is calculated at a 6 to 1 ratio. |
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Schedule 5
Noble Energy, Inc
Income Before Income Taxes
(Dollars in thousands, except realized prices)
(Unaudited)
Noble Energy, Inc
Income Before Income Taxes
(Dollars in thousands, except realized prices)
(Unaudited)
Three Months Ended 3/31/06
North | West | North | Other | Corporate | |||||||||||||||||||||||||||||||||||||||||||
Consolidated | America | Africa | Sea | Israel | Int'l | [1] | & Other | [2] | |||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Oil sales | $ | 327,075 | $ | 141,320 | $ | 122,306 | $ | 28,179 | $ | — | $ | 35,270 | $ | — | |||||||||||||||||||||||||||||||||
Gas sales | 319,177 | 289,536 | 1,733 | [3] | 8,108 | 19,759 | 41 | — | |||||||||||||||||||||||||||||||||||||||
Equity investee liquids sales | — | — | 32,956 | — | — | — | (32,956 | ) | |||||||||||||||||||||||||||||||||||||||
Equity investee methanol sales | — | — | 27,985 | — | — | — | (27,985 | ) | |||||||||||||||||||||||||||||||||||||||
Gathering, marketing and processing | 8,183 | — | — | — | — | — | 8,183 | ||||||||||||||||||||||||||||||||||||||||
Electricity sales | 17,912 | — | — | — | — | 17,912 | — | ||||||||||||||||||||||||||||||||||||||||
Income from equity method investments | 39,650 | — | — | — | — | — | 39,650 | ||||||||||||||||||||||||||||||||||||||||
Total Revenues | 711,997 | 430,856 | 184,980 | 36,287 | 19,759 | 53,223 | (13,108 | ) | |||||||||||||||||||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Oil and gas operating costs | 62,602 | 46,198 | 7,547 | 2,333 | 2,123 | 4,158 | 243 | ||||||||||||||||||||||||||||||||||||||||
Workover and repair expense | 19,591 | 19,522 | [7] | — | — | — | 69 | — | |||||||||||||||||||||||||||||||||||||||
Production and ad valorem taxes | 25,453 | 22,077 | — | — | — | 3,233 | 143 | ||||||||||||||||||||||||||||||||||||||||
Transportation | 5,061 | 3,375 | — | 1,493 | — | 193 | — | ||||||||||||||||||||||||||||||||||||||||
Oil and gas exploration | 32,022 | 20,341 | 2,321 | 4,472 | 32 | 2,361 | 2,495 | ||||||||||||||||||||||||||||||||||||||||
Gathering, marketing and processing | 5,502 | — | — | — | — | — | 5,502 | ||||||||||||||||||||||||||||||||||||||||
Equity investee liquids expense | — | — | 5,853 | — | — | — | (5,853 | ) | |||||||||||||||||||||||||||||||||||||||
Equity investee methanol expense | — | — | 15,438 | — | — | — | (15,438 | ) | |||||||||||||||||||||||||||||||||||||||
Electricity generation | 10,626 | — | — | — | — | 10,626 | — | ||||||||||||||||||||||||||||||||||||||||
DD&A | 124,465 | 104,692 | 6,115 | 1,874 | 3,199 | 6,598 | 1,987 | ||||||||||||||||||||||||||||||||||||||||
Impairment of operating assets | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
General and administrative | 35,398 | 13,321 | 1 | 627 | 11 | 1,750 | 19,688 | ||||||||||||||||||||||||||||||||||||||||
Accretion expense | 3,318 | 2,836 | 26 | 291 | 106 | 59 | — | ||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 33,168 | — | — | — | — | — | 33,168 | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation | 9,176 | — | — | — | — | — | 9,176 | ||||||||||||||||||||||||||||||||||||||||
(Gain) loss on derivative instruments | (5,159 | ) | (5,159 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Loss on involuntary conversion | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
(Gain) loss on sale of assets | (98 | ) | (74 | ) | — | — | — | 31 | (55 | ) | |||||||||||||||||||||||||||||||||||||
Other expense (income), net | 1,519 | 2,369 | (213 | ) | (466 | ) | (440 | ) | 1,149 | (880 | ) | ||||||||||||||||||||||||||||||||||||
Total Costs and Expenses | 362,644 | 229,498 | 37,088 | 10,624 | 5,031 | 30,227 | 50,176 | ||||||||||||||||||||||||||||||||||||||||
Operating Income (Loss) | $ | 349,353 | $ | 201,358 | $ | 147,892 | $ | 25,663 | $ | 14,728 | $ | 22,996 | $ | (63,284 | ) | ||||||||||||||||||||||||||||||||
Key Statistics | |||||||||||||||||||||||||||||||||||||||||||||||
Sales Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids (Bopd) | 72,506 | 37,205 | 23,246 | 4,255 | — | 7,800 | — | ||||||||||||||||||||||||||||||||||||||||
Natural Gas (Mcfpd) | 634,937 | 462,547 | 54,613 | [3] | 8,485 | 82,556 | 26,736 | [6] | — | ||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids (Bpd) | 8,124 | — | 8,124 | [4] | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Equity Investee Methanol (Kgal) | 34,109 | — | 34,109 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Production Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids (Bopd) | 66,780 | 37,205 | 18,007 | 4,178 | — | 7,390 | — | ||||||||||||||||||||||||||||||||||||||||
Natural Gas (Mcfpd) | 634,937 | 462,547 | 54,613 | 8,485 | 82,556 | 26,736 | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids (Bpd) | 6,951 | — | 6,951 | [5] | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Total Production Boepd | [8] | 179,554 | 114,296 | 34,060 | 5,592 | 13,759 | 11,846 | — | |||||||||||||||||||||||||||||||||||||||
Average Realized Price | |||||||||||||||||||||||||||||||||||||||||||||||
Liquids | $ | 50.12 | $ | 42.20 | $ | 58.46 | $ | 73.59 | $ | — | $ | 50.24 | $ | — | |||||||||||||||||||||||||||||||||
Natural Gas | 5.83 | 6.96 | 0.35 | 10.62 | 2.66 | 1.09 | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Liquids | 45.07 | — | 45.07 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Equity Investee Methanol | 0.82 | — | 0.82 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
[1] | Other international includes operations in Argentina, China, Ecuador and Suriname. | |
[2] | Corporate and Other includes corporate overhead, intercompany eliminations and marketing. | |
[3] | Natural gas in Equatorial Guinea is under contract for $0.25 per MMBTU through 2026 to a methanol plant and an LPG plant. Both of these plants are owned by affiliated entities accounted for under the equity method of accounting. | |
[4] | Equity Investee LPG volumes include condensate and natural gas liquids of 1,070 Bpd and 7,054 Bpd, respectively. These volumes are included in West Africa production and LPG sales revenue. | |
[5] | Equity Investee LPG volumes include condensate and natural gas liquids of 1,571 Bpd and 5,380 Bpd, respectively. | |
[6] | Ecuador natural gas volumes are included in Other International and Consolidated production, but are not included in natural gas sales revenue for either. Because the gas-to-power project in Ecuador is 100 percent owned by Noble Energy, intercompany natural gas sales are eliminated for accounting purposes. | |
[7] | Includes approximately $15 million of hurricane related repair expense. | |
[8] | Barrels of oil equivalent for natural gas is calculated at a 6 to 1 ratio. |
8
Schedule 6
Noble Energy, Inc.
Pretax Cash Flow Hedges Earnings Impact
(Dollars in thousands)
(Unaudited)
Noble Energy, Inc.
Pretax Cash Flow Hedges Earnings Impact
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
3/31/2007 | 3/31/2006 | |||||||
(Decrease) increase of oil and gas sales: | ||||||||
Cash settlement crude oil contracts | $ | (28,103 | ) | $ | (56,115 | ) | ||
Cash settlement natural gas contracts | (8,190 | ) | (51,201 | ) | ||||
Total cash settlements | (36,293 | ) | (107,316 | ) | ||||
Non-cash impact of loss associated with Gulf of Mexico shelf asset sale | 51,029 | — | ||||||
Net increase (decrease) of oil and gas sales | 14,736 | (107,316 | ) | |||||
(Loss) gain on derivative instruments: | ||||||||
Gain from ineffectiveness and other | 1,005 | 5,159 | ||||||
Pretax earnings increase (decrease) | $ | 15,741 | $ | (102,157 | ) | |||
Impact of Loss Associated with Gulf of Mexico Shelf Asset Sale
(Dollars in thousands)
(Unaudited)
(Dollars in thousands)
(Unaudited)
Loss associated with Gulf of Mexico shelf asset sale ( 2Q 2006 ) | $ | (398,517 | ) | |
Redesignated and mark to market contracts settled in 2006 | 30,651 | |||
Redesignated contracts settled in 1st Qtr 2007 | 51,029 | |||
Unsettled loss associated with Gulf of Mexico shelf asset sale | $ | (316,837 | ) |
Settlement schedule | Crude Oil | Natural Gas | Total | |||||||||
2Q 2007 | — | 39,589 | 39,589 | |||||||||
3Q 2007 | — | 42,404 | 42,404 | |||||||||
4Q 2007 | — | 49,402 | 49,402 | |||||||||
1Q 2008 | 5,979 | 54,529 | 60,508 | |||||||||
2Q 2008 | 5,835 | 32,191 | 38,026 | |||||||||
3Q 2008 | 5,763 | 34,055 | 39,818 | |||||||||
4Q 2008 | 5,633 | 41,457 | 47,090 | |||||||||
Remaining settlements | $ | 23,210 | $ | 293,627 | $ | 316,837 | ||||||
9
Schedule 7
Noble Energy, Inc.
Ecuador Power Operations
(Dollars in thousands, except realized prices)
(Unaudited)
Noble Energy, Inc.
Ecuador Power Operations
(Dollars in thousands, except realized prices)
(Unaudited)
Three Months Ended | ||||||||
3/31/2007 | 3/31/2006 | |||||||
Revenues | ||||||||
Power Sales | $ | 21,019 | $ | 15,749 | ||||
Capacity Charge | 2,206 | 2,163 | ||||||
Total Revenues | 23,225 | 17,912 | ||||||
Costs and expenses | ||||||||
Field Lease Operating | 721 | 638 | ||||||
DD&A | 2,858 | 3,011 | ||||||
General and administrative | 880 | 711 | ||||||
Plant Fuel & Other Operating Costs | 9,300 | 3,595 | ||||||
DD&A | 617 | 1,141 | ||||||
General and administrative | 1,717 | 1,530 | ||||||
Total Costs and Expenses | 16,093 | 10,626 | ||||||
Operating Income | $ | 7,132 | $ | 7,286 | ||||
Natural Gas Production (Mcfpd) | 30,273 | 26,321 | ||||||
Average Natural Gas Price | $ | 3.76 | $ | 3.76 | ||||
Power Production — Total MW | 266,648 | 229,703 | ||||||
Average Power Price ($/Kwh) | $ | 0.087 | $ | 0.078 | ||||
10
Schedule 8
Income from Equity Method Investees
Income from Equity Method Investees
Methanol Operations
(Dollars in thousands, except realized prices)
(Unaudited)
(Dollars in thousands, except realized prices)
(Unaudited)
Three Months Ended | ||||||||
3/31/2007 | 3/31/2006 | |||||||
Revenues | ||||||||
Methanol sales | $ | 48,291 | $ | 27,985 | ||||
Other | 1,288 | 1,775 | ||||||
Total revenues | 49,579 | 29,760 | ||||||
Costs and expenses | ||||||||
Cost of goods sold | 14,850 | 10,455 | ||||||
DD&A | 2,763 | 2,387 | ||||||
General and administrative | 564 | 521 | ||||||
Total costs and expenses | 18,177 | 13,363 | ||||||
Income Tax Provision | 6,649 | 3,850 | ||||||
Income from Equity Method Investees | $ | 24,753 | $ | 12,547 | ||||
Methanol Sales (KGal) | 39,692 | 34,109 | ||||||
Average Realized Price ($/Gal) | $ | 1.22 | $ | 0.82 |
Alba Plant
(Dollars in thousands, except realized prices)
(Unaudited)
(Dollars in thousands, except realized prices)
(Unaudited)
Three Months Ended | ||||||||
3/31/2007 | 3/31/2006 | |||||||
Revenues | ||||||||
LPG Plant Sales | $ | 28,096 | $ | 32,956 | ||||
Other | 98 | 712 | ||||||
Total Revenues | 28,194 | 33,668 | ||||||
Costs and expenses | ||||||||
LPG Plant Expenses | 5,957 | 4,915 | ||||||
DD&A | 1,698 | 1,650 | ||||||
Total Costs and Expenses | 7,655 | 6,565 | ||||||
Income Tax Benefit | (271 | ) | — | |||||
Income from Equity Method Investees | $ | 20,810 | $ | 27,103 | ||||
LPG Plant Sales (Bpd) | 7,014 | 8,124 | ||||||
Average Realized Price ($/Bbl) | $ | 44.51 | $ | 45.07 |
11