Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Revenues | ||
Oil, Gas and NGL Sales | $688 | $406 |
Income from Equity Method Investees | 26 | 11 |
Other Revenues | 19 | 24 |
Total Revenues | 733 | 441 |
Costs and Expenses | ||
Production Expense | 139 | 130 |
Exploration Expense | 80 | 42 |
Depreciation, Depletion and Amortization | 216 | 200 |
General and Administrative | 66 | 59 |
Asset Impairments | 0 | 437 |
Other Operating (Income) Expense, Net | 14 | (6) |
Total Operating Expenses | 515 | 862 |
Operating Income (Loss) | 218 | (421) |
Other (Income) Expense | ||
Gain on Commodity Derivative Instruments | (145) | (73) |
Interest, Net of Amount Capitalized | 20 | 18 |
Other Non-Operating Expense, Net | 0 | 8 |
Total Other (Income) Expense | (125) | (47) |
Income (Loss) Before Income Taxes | 343 | (374) |
Income Tax Provision (Benefit) | 106 | (186) |
Net Income (Loss) | $237 | ($188) |
Earnings (Loss) Per Share, Basic | 1.36 | -1.09 |
Earnings (Loss) Per Share, Diluted | 1.34 | -1.09 |
Weighted Average Number of Shares Outstanding, Basic | 174 | 173 |
Weighted Average Number of Shares Outstanding, Diluted | 177 | 173 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current Assets | ||
Cash and Cash Equivalents | $1,031 | $1,014 |
Accounts Receivable, Net | 380 | 465 |
Other Current Assets | 186 | 199 |
Total Assets, Current | 1,597 | 1,678 |
Property, Plant and Equipment | ||
Oil and Gas Properties (Successful Efforts Method of Accounting) | 13,443 | 12,584 |
Property, Plant and Equipment, Other | 243 | 240 |
Total Property, Plant and Equipment, Gross | 13,686 | 12,824 |
Accumulated Depreciation, Depletion and Amortization | (4,090) | (3,908) |
Total Property, Plant and Equipment, Net | 9,596 | 8,916 |
Goodwill | 757 | 758 |
Other Noncurrent Assets | 502 | 455 |
Total Assets | 12,452 | 11,807 |
Current Liabilities | ||
Accounts Payable - Trade | 570 | 548 |
Other Current Liabilities | 435 | 442 |
Total Liabilities, Current | 1,005 | 990 |
Long-Term Debt | 2,366 | 2,037 |
Deferred Income Taxes, Noncurrent | 2,104 | 2,076 |
Other Noncurrent Liabilities | 582 | 547 |
Total Liabilities | 6,057 | 5,650 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Preferred Stock - Par Value $1.00; 4 Million Shares Authorized, None Issued | 0 | 0 |
Common Stock - Par Value $3.33 1/3; 250 Million Shares Authorized; 195 Million and 194 Million Shares Issued, Respectively | 649 | 645 |
Additional Paid in Capital | 2,304 | 2,260 |
Accumulated Other Comprehensive Loss | (78) | (75) |
Treasury Stock, at Cost; 19 Million Shares | (627) | (615) |
Retained Earnings | 4,147 | 3,942 |
Total Shareholders' Equity | 6,395 | 6,157 |
Total Liabilities and Shareholders' Equity | $12,452 | $11,807 |
Parenthetical Data to the Conso
Parenthetical Data to the Consolidated Balance Sheets (USD $) | ||
Share data in Millions, except Per Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Shareholders' Equity | ||
Preferred Stock, Par Value Per Share | $1 | $1 |
Preferred Stock - Shares Authorized | 4 | 4 |
Preferred Stock - Shares Issued | 0 | 0 |
Common Stock, Par Value Per Share | 3.33 | 3.33 |
Common Stock - Shares Authorized | 250 | 250 |
Common Stock - Shares Issued | 195 | 194 |
Treasury Stock, Shares | 19 | 19 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash Flows From Operating Activities | ||
Net Income (Loss) | $237 | ($188) |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||
Depreciation, Depletion and Amortization | 216 | 200 |
Dry Hole Expense | 39 | 2 |
Asset Impairments | 0 | 437 |
Deferred Income Taxes | 27 | (301) |
Income from Equity Method Investees | (26) | (11) |
Dividends from Equity Method Investees | 13 | 0 |
Unrealized (Gain) Loss on Commodity Derivative Instruments | (147) | 80 |
Other Adjustments for Noncash Items Included in Income | 21 | (18) |
Changes in Operating Assets and Liabilities: | ||
(Increase) Decrease in Accounts Receivable | 85 | (34) |
(Increase) Decrease in Other Current Assets | 50 | (1) |
Increase (Decrease) in Accounts Payable | 27 | (35) |
Increase in Other Current Liabilities | 33 | 56 |
Other Operating Assets and Liabilities, Net | 13 | (2) |
Net Cash Provided by Operating Activities | 588 | 185 |
Cash Flows From Investing Activities | ||
Additions to Property, Plant and Equipment | (383) | (399) |
DJ Basin Asset Acquisition | (466) | 0 |
Net Cash Used in Investing Activities | (849) | (399) |
Cash Flows From Financing Activities | ||
Exercise of Stock Options | 21 | 11 |
Excess Tax Benefits from Stock-Based Awards | 13 | 3 |
Dividends Paid, Common Stock | (32) | (31) |
Purchase of Treasury Stock | (12) | (1) |
Proceeds from Credit Facilities | 610 | 180 |
Repayment of Credit Facilities | (322) | (1,060) |
Proceeds from Issuance of Senior Long-Term Debt | 0 | 989 |
Net Cash Provided by Financing Activities | 278 | 91 |
Increase (Decrease) in Cash and Cash Equivalents | 17 | (123) |
Cash and Cash Equivalents at Beginning of Period | 1,014 | 1,140 |
Cash and Cash Equivalents at End of Period | $1,031 | $1,017 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (unaudited) (USD $) | ||||||
In Millions | Common Stock
| Additional Paid in Capital
| Accumulated Other Comprehensive Loss
| Treasury Stock at Cost
| Retained Earnings
| Total
|
Balance, Beginning of Period at Dec. 31, 2008 | $641 | $2,193 | ($110) | ($614) | $4,199 | $6,309 |
Net Income (Loss) | 0 | 0 | 0 | 0 | (188) | (188) |
Stock-Based Compensation Expense | 0 | 12 | 0 | 0 | 0 | 12 |
Exercise of Stock Options | 2 | 9 | 0 | 0 | 0 | 11 |
Tax Benefits Related to Exercise of Stock Options | 0 | 3 | 0 | 0 | 0 | 3 |
Restricted Stock Awards, Net | 2 | (2) | 0 | 0 | 0 | 0 |
Dividends (18 cents per share) | 0 | 0 | 0 | 0 | (31) | (31) |
Changes in Treasury Stock, Net | 0 | 0 | 0 | (1) | 0 | (1) |
Oil and Gas Cash Flow Hedges | ||||||
Realized Amounts Reclassified into Earnings | 0 | 0 | 11 | 0 | 0 | 11 |
Interest Rate Cash Flow Hedges | ||||||
Net Change in Other | 0 | 0 | (1) | 0 | 0 | (1) |
Balance, End of Period at Mar. 31, 2009 | 645 | 2,215 | (100) | (615) | 3,980 | 6,125 |
Balance, Beginning of Period at Dec. 31, 2009 | 645 | 2,260 | (75) | (615) | 3,942 | 6,157 |
Net Income (Loss) | 0 | 0 | 0 | 0 | 237 | 237 |
Stock-Based Compensation Expense | 0 | 14 | 0 | 0 | 0 | 14 |
Exercise of Stock Options | 2 | 19 | 0 | 0 | 0 | 21 |
Tax Benefits Related to Exercise of Stock Options | 0 | 13 | 0 | 0 | 0 | 13 |
Restricted Stock Awards, Net | 2 | (2) | 0 | 0 | 0 | 0 |
Dividends (18 cents per share) | 0 | 0 | 0 | 0 | (32) | (32) |
Changes in Treasury Stock, Net | 0 | 0 | 0 | (12) | 0 | (12) |
Oil and Gas Cash Flow Hedges | ||||||
Realized Amounts Reclassified into Earnings | 0 | 0 | 4 | 0 | 0 | 4 |
Interest Rate Cash Flow Hedges | ||||||
Unrealized Change in Fair Value | 0 | 0 | (7) | 0 | 0 | (7) |
Balance, End of Period at Mar. 31, 2010 | $649 | $2,304 | ($78) | ($627) | $4,147 | $6,395 |
Organization and Nature of Oper
Organization and Nature of Operations | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1.Organization and Nature of Operations Noble Energy, Inc. (Noble Energy, we or us) is an independent energy company engaged in worldwide crude oil, natural gas and NGL exploration and production. We operate primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the US, with key international operations offshore Israel and West Africa. |
Basis of Presentation
Basis of Presentation | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Basis of Presentation | Note 2.Basis of Presentation Presentation Our consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the US for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US generally accepted accounting principles (GAAP) for complete financial statements. The accompanying consolidated financial statements at March 31, 2010 and December 31, 2009 and for the three months ended March 31, 2010 and 2009 contain all normally recurring adjustments considered necessary for a fair presentation of our financial position, results of operations and cash flows for such periods. Operating results for the three-month period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. Certain reclassifications of amounts previously reported have been made to conform to current year presentations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our annual report on Form 10-K for the year ended December 31, 2009. Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Statements of Operations Information Other statements of operations information is as follows: Three Months Ended March31, 2010 2009 (millions) Other Revenues Electricity Sales (1) $ 19 $ 20 Other - 4 Total $ 19 $ 24 Production Expense Lease Operating Expense $ 88 $ 100 Production and Ad Valorem Taxes 34 18 Transportation Expense 17 12 Total $ 139 $ 130 Other Operating Expense, Net Electricity Generation Expense (1) $ 10 $ (30 ) Other, Net 4 24 Total $ 14 $ (6 ) Other Non-Operating (Income) Expense, Net Deferred Compensation (2) $ 2 $ 5 Interest Income (1 ) - Other (Income) Expense, Net (1 ) 3 Total $ - $ 8 (1) Includes amounts related to our 100%-owned Ecuador integrated power project. The project includes the Amistad natural gas field, offshore Ecuador, which supplies natural gas to fuel the Machala power plant located in Machala, Ecuador. Electricity generation expense includes all operating and non-operating expenses associated with the plant, including depreciation, depletion and amortization expense (DDA) and changes in the allowance for doubtful accounts. Electricity generation expense for first quarter 2009 includes a reduction in the allowance for doubtful accounts of $46 million receiv |
DJ Basin Asset Acquisition
DJ Basin Asset Acquisition | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
DJ Basin Asset Acquisition | Note 3.DJ Basin Asset Acquisition On March 1, 2010, we acquired substantially all of the US Rocky Mountain assets of Petro-Canada Resources (USA) Inc. and Suncor Energy (Natural Gas) America Inc. The acquisition included properties located in the Greater Denver-Julesberg (DJ) Basin, one of our core onshore US operating areas. We funded the acquisition using our existing credit facility. We acquired the assets for $466 million cash and assumed net liabilities totaling $43 million, for a total purchase price of $509 million. The total purchase price was allocated preliminarily to the assets acquired and the liabilities assumed based on fair values at the acquisition date. The preliminary allocation was as follows: $363 million to proved oil and gas properties; and $146 million to unproved oil and gas properties. The difference between the total purchase price and the fair values of the assets acquired as of March 1, 2010 was de minimis. To estimate the fair values of the properties, we used an income approach as comparable market data was not available. We utilized a discounted cash flow model which took into account the following inputs to arrive at estimates of future net cash flows: estimated quantities of crude oil and natural gas prepared by our qualified petroleum engineers; estimated future commodity prices based on NYMEX crude oil and natural gas futures prices as of the acquisition date and adjusted for estimated location and quality differentials; estimated future production rates based on our experience with similar DJ basin properties which we operate; and estimated timing and amounts of future operating and development costs based on our experience with similar DJ basin properties which we operate. To estimate the fair value of proved properties, we discounted the future net cash flows using a market-based weighted average cost of capital rate determined appropriate at the acquisition date. To compensate for the inherent risk of estimating and valuing unproved properties, we reduced the discounted future net cash flows of probable and possible reserves by additional risk-weighting factors. The fair values of the proved and unproved oil and gas properties are considered Level 3 fair value measurements. Certain data necessary to complete the final purchase price allocation is not yet available, and includes, but is not limited to, final appraisals of assets acquired and liabilities assumed. We expect to complete the final purchase price allocation during the 12-month period following the acquisition date, during which time the preliminary allocation may be revised. Related transaction costs were expensed. We have not presented pro forma information for the acquired business as the impact of the acquisition was not material to our consolidated balance sheet as of March 31, 2010, or our consolidated results of operations for the three months ended March 31, 2010. |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Debt | Note 4.Debt Our debt consists of the following: March31, December31, 2010 2009 Debt Interest Rate Debt Interest Rate (millions, except percentages) Credit Facility (1) $ 670 0.55 % $ 382 0.54 % 5% Senior Notes, due April 15, 2014 200 5.25 % 200 5.25 % 8% Senior Notes, due March 1, 2019 1,000 8.25 % 1,000 8.25 % 7% Notes, due October 15, 2023 100 7.25 % 100 7.25 % 8% Senior Notes, due April 1, 2027 250 8.00 % 250 8.00 % 7% Senior Debentures, due August 1, 2097 84 7.25 % 84 7.25 % Obligation Under FPSO Lease (2) 69 - 29 - Total 2,373 2,045 Unamortized Discount (7 ) (8 ) Total Debt, Net of Discount $ 2,366 $ 2,037 (1) The increase in the credit facility balance from December 31, 2009 represents amounts drawn to fund the DJ Basin asset acquisition. See Note 3. DJ Basin Asset Acquisition. (2) Amount reported is based on percentage of FPSO construction activities completed as of March 31, 2010, and therefore does not reflect future minimum lease obligations. The increase in the FPSO lease obligation is a non-cash financing activity. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Derivative Instruments and Hedging Activities | Note 5.Derivative Instruments and Hedging Activities Objectives and Strategies for Using Derivative Instruments In order to reduce commodity price uncertainty and enhance the predictability of cash flows relating to the marketing of our crude oil and natural gas, we enter into crude oil and natural gas price hedging arrangements with respect to a portion of our expected production. The derivative instruments we use include variable to fixed price commodity swaps, collars and basis swaps. While these instruments mitigate the cash flow risk of future reductions in commodity prices they may also curtail benefits from future increases in commodity prices. We may also use derivative instruments to manage interest rate risk by entering into forward contracts or swap agreements to minimize the impact of interest rate fluctuations associated with fixed or floating rate borrowings. We may designate these as cash flow hedges. All derivative instruments are reflected as either assets or liabilities at fair value in our consolidated balance sheets. See Note 6. Fair Value Measurements and Disclosures for a discussion of methods and assumptions used to estimate the fair values of derivative instruments and gross amounts of derivative assets and liabilities. Counterparty Credit RiskDerivative instruments expose us to counterparty credit risk. Our commodity derivative instruments are currently with a diversified group of financial institutions.We generally execute commodity derivative instruments under master agreements which allow us, in the event of default, to elect early termination of all contracts with the defaulting counterparty.If we choose to elect early termination, all asset and liability positions with the defaulting counterparty would be net cash settled at the time of election. We monitor the creditworthiness of our counterparties. However, we are not able to predict sudden changes in counterparties creditworthiness. In addition, even if such changes are not sudden, we may be limited in our ability to mitigate an increase in counterparty credit risk. Possible actions would be to transfer our position to another counterparty or request a voluntary termination of the derivative contracts resulting in a cash settlement. Should one of these financial counterparties not perform, we may not realize the benefit of some of our derivative instruments under lower commodity prices as well as incur a loss.We include a measure of counterparty credit risk in our estimates of the fair values of derivative instruments in an asset position. Accounting for Commodity Derivative Instruments We recognize all gains and losses on commodity derivative instruments in earnings during the period in which they occur.Prior to January 1, 2008, we elected to designate certain of our commodity derivative instruments as cash flow hedges. Net derivative gains and losses that were deferred in accumulated other comprehensive loss (AOCL) as of January 1, 2008, as a result of previous cash flow hedge accounting, are reclassified to earnings in future periods as the original hedged transactions occur.See Derivative Instruments in Cash Flow Hedging Relationships table be |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Fair Value Measurements and Disclosures | Note 6.Fair Value Measurements and Disclosures Assets and Liabilities Measured at Fair Value on a Recurring Basis Certain assets and liabilities are measured at fair value on a recurring basis in our consolidated balance sheets.The following methods and assumptions were used to estimate the fair values: Cash, Cash Equivalents, Accounts Receivable and Accounts PayableThe carrying amounts approximate fair value due to the short-term nature or maturity of the instruments. Mutual Fund Investments Our mutual fund investments, which primarily include assets held in a rabbi trust, consist of various publicly-traded mutual funds that include investments ranging from equities to money market instruments. The fair values are based on quoted market prices for identical assets. Commodity Derivative InstrumentsOur commodity derivative instruments consist of variable to fixed price commodity swaps, collars and basis swaps. We estimate the fair values of these instruments based on published forward commodity price curves for the underlying commodities as of the date of the estimate. The discount rate used in the discounted cash flow projections is based on published LIBOR rates, Eurodollar futures rates and interest swap rates. The fair values of commodity derivative instruments in an asset position include a measure of counterparty credit risk, and the fair values of commodity derivative instruments in a liability position include a measure of our own nonperformance risk, each based on the current published credit default swap rates. In addition, for collars, we estimate the option value of the contract floors and ceilings using an option pricing model which takes into account market volatility, market prices and contract terms. See Note 5. Derivative Instruments and Hedging Activities. Interest Rate Derivative InstrumentWe estimate the fair value of our forward starting swap based on published interest rate yield curves as of the date of the estimate. The fair values of interest rate derivative instruments in an asset position include a measure of counterparty credit risk, and the fair values of interest rate derivative instruments in a liability position include a measure of our own nonperformance risk, each based on the current published credit default swap rates. Deferred Compensation Liability A portion of our deferred compensation liability is measured at fair value, which is dependant upon the fair values of mutual fund investments and shares of our common stock held in a rabbi trust. See Mutual Fund Investments above. Measurement information for assets and liabilities that are measured at fair value on a recurring basis was as follows: Fair Value Measurements Using Quoted Prices inActive Markets (Level 1) (1) Significant Other Observable Inputs (Level 2) (2) Significant Unobservable Inputs (Level 3) (3) Adjustment (4) Fair Value Measurement (millions) March31, 2010 Financial Assets Mutual Fund Investments $ 110 $ - $ - $ - $ 110 Commodity Derivative Instruments - 184 - (105 ) 79 Financial Liabilities Commodity Derivative Instruments - (134 ) |
Capitalized Exploratory Well Co
Capitalized Exploratory Well Costs | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Capitalized Exploratory Well Costs | Note 7.Capitalized Exploratory Well Costs Changes in capitalized exploratory well costs are as follows and exclude amounts that were capitalized and subsequently expensed in the same period: Three Months Ended March31, 2010 (millions) Capitalized Exploratory Well Costs, Beginning of Period $ 432 Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves 32 Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves (6 ) Capitalized Exploratory Well Costs Charged to Expense (2 ) Capitalized Exploratory Well Costs, End of Period $ 456 The following table provides an aging of capitalized exploratory well costs (suspended well costs) based on the date the drilling was completed and the number of projects for which exploratory well costs have been capitalized for a period greater than one year since the completion of drilling: March31, December31, 2010 2009 (millions) Exploratory Well Costs Capitalized for a Period of One Year or Less $ 97 $ 158 Exploratory Well Costs Capitalized for a Period Greater Than One Year After Completion of Drilling 359 274 Balance at End of Period $ 456 $ 432 Number of Projects with Exploratory Well Costs That Have Been Capitalized for a Period Greater Than One Year After Completion of Drilling 9 5 The following table provides a further aging of those exploratory well costs that have been capitalized for a period greater than one year since the completion of drilling as of March 31, 2010: Suspended Since Total 2009 2008 2007 Prior (millions) Project Blocks O and I (West Africa) $ 194 $ 13 $ 71 $ 110 Tamar and Dalit (Israel) 58 33 24 1 Gunflint (Deepwater Gulf of Mexico) 49 - 49 - Redrock (Deepwater Gulf of Mexico) 17 - - 17 Flyndre (North Sea) 15 - - 15 Selkirk (North Sea) 20 - - 20 Other 6 6 - - Total Exploratory Well Costs Capitalized for a Period Greater Than One Year After Completion of Drilling $ 359 $ 52 $ 144 $ 163 West AfricaThe West Africa project includes Blocks O and I offshore Equatorial Guinea and the YoYo concession and Tilapia production sharing contract offshore Cameroon. We have evaluated the potential for additional liquids and gas projects, and determined that the next development after Aseng will be at the Belinda field. We are also evaluating future oil projects at Diega and Carmen. In Cameroon, we will acquire a 3-D seismic survey over YoYo and portions of Tilapia during 2010, and exploration drilling is currently planned in Tilapia. IsraelThe Israel project includes the Tamar and Dalit prospects, both significant 2009 natural gas discoveries located offshore Israel. We are moving forward with Tamar development plans, and expect project sanction and recording of proved reserves in 2010, with first production projected for 2012. We have also signed letters of intent to sell natural gas from the Tamar field. In addition to the remaining exploratory well costs that have been capitalized for a period greater than one yea |
Asset Retirement Obligations
Asset Retirement Obligations | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Asset Retirement Obligations | Note 8.Asset Retirement Obligations Asset retirement obligations consist primarily of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. Changes in asset retirement obligations were as follows: Three Months Ended March31, 2010 2009 (in millions) Asset Retirement Obligations, Beginning of Period $ 232 $ 211 Liabilities Incurred in Current Period 14 1 Liabilities Settled in Current Period (4 ) (2 ) Revisions 4 16 Accretion Expense 4 3 Asset Retirement Obligations, End of Period $ 250 $ 229 Liabilities incurred in 2010 were due to the DJ Basin asset acquisition.Accretion expense is included in DDAexpense in the consolidated statements ofoperations. |
Employee Benefit Plans
Employee Benefit Plans | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Employee Benefit Plans | Note 9.Employee Benefit Plans We have a noncontributory, tax-qualified defined benefit pension plan covering employees who were hired prior to May 1, 2006. We also have an unfunded, nonqualified restoration plan that provides the pension plan formula benefits that cannot be provided by the qualified pension plan because of pay deferrals and the compensation and benefit limitations imposed on the pension plan by the Internal Revenue Code of 1986, as amended. Net periodic benefit cost related to the retirement and restoration plans was as follows: Three Months Ended March31, 2010 2009 (millions) Service Cost $ 4 $ 3 Interest Cost 3 3 Expected Return on Plan Assets (3 ) (3 ) Other 1 1 Net Periodic Benefit Cost $ 5 $ 4 During the three months ended March 31, 2010, we made cash contributions of $2 million to the pension plan. |
Stock-Based Compensation
Stock-Based Compensation | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Stock-Based Compensation | Note 10.Stock-Based Compensation We recognized stock-based compensation expense as follows: Three Months Ended March31, 2010 2009 (millions) Stock-Based Compensation Expense $ 14 $ 12 Tax Benefit Recognized (5 ) (4 ) During the three months ended March 31, 2010, we granted one million stock options with a weighted average grant-date fair value of $25.06 per share and awarded 0.4 million shares of restricted stock subject to service conditions with a weighted average grant-date fair value of $75.10 per share. |
Basic and Diluted Earnings
Basic and Diluted Earnings (Loss) Per Share | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Basic and Diluted Earnings (Loss) Per Share | Note 11.Basic and Diluted Earnings (Loss) Per Share Basic earnings (loss) per share of common stock is computed using the weighted average number of shares of common stock outstanding during each period. The diluted earnings per share of common stock may include the effect of our shares held in a rabbi trust, outstanding stock options or shares of restricted stock, except in periods in which there is a net loss. The following table summarizes the calculation of basic and diluted earnings (loss) per share: Three Months Ended March31, 2010 2009 (millions, except per share amounts) Net Income (Loss) $ 237 $ (188 ) Weighted Average Number of Shares Outstanding, Basic 174 173 Incremental Shares from Assumed Conversion of Dilutive Options, Restricted Stock and Shares of Common Stock in Rabbi Trust 3 - Weighted Average Number of Shares Outstanding, Diluted 177 173 Earnings (Loss) Per Share, Basic $ 1.36 $ (1.09 ) Earnings (Loss) Per Share, Diluted 1.34 (1.09 ) Stock options, restricted shares and common shares held in a rabbi trust that were antidilutive for first quarter 2010 and 2009, and therefore excluded from the calculation of diluted earnings (loss) per share, totaled 1.2 million and 4.6 million, respectively. The effect of stock options and unvested shares of restricted stock outstanding has not been included in the calculation of weighted average shares outstanding for diluted earnings per share for the three months ending March 31, 2009 as their effect would have been antidilutive. Had we recognized net income for this period, incremental shares attributable to the assumed exercise of outstanding options and shares of restricted stock would have increased diluted weighted average shares outstanding by 1.6 million shares for the three months ended March 31, 2009. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Income Taxes | Note 12.Income Taxes The income tax provision (benefit) consists of the following: Three Months Ended March31, 2010 2009 (millions) Current $ 79 $ 115 Deferred 27 (301 ) Total Income Tax Provision (Benefit) $ 106 $ (186 ) Our effective tax rate decreased to 31% for the first three months of 2010 as compared with 50% for the first three months of 2009. For the first quarter of 2010, the effective rate is lower than the federal statutory rate because our income from equity method investees results in a favorable permanent difference, which has the impact of decreasing the statutory rate when our pre-tax income is positive. The 2009 rate was the result of a tax benefit divided by a pre-tax loss.In the case of a loss, our favorable permanent differences, such as income from equity method investees, have the effect of increasing the tax benefit which, in turn, increases the effective rate. The deferred tax benefit for the three months ended March 31, 2009 was due primarily to the realization in 2009 of a significant amount of unrealized mark-to-market gain originally recorded in 2008, resulting in the reversal of most of the associated deferred tax liability recorded in 2008. In addition, we recorded a deferred tax asset with respect to impairment losses on our US oil and gas properties. During first quarter 2009, we repatriated $180 million of accumulated earnings of foreign subsidiaries and used the proceeds for debt repayment and general corporate purposes. The repatriation increased US tax expense by $13 million of which $9 million was recorded in 2008.Repatriation of additional earnings in the future could result in a decrease in our net income and cash flows. Unrecognized Tax PositionsWe do not have significant unrecognized tax benefits as of March 31, 2010. Our policy is to recognize any interest and penalties related to unrecognized tax benefits in income tax expense. We did not accrue interest or penalties at March 31, 2010, because the jurisdiction in which we have unrecognized tax benefits does not currently impose interest on underpayments of tax, and we believe that we are below the minimum statutory threshold for imposition of penalties. In our major tax jurisdictions, the earliest years remaining open to examination are as follows: US 2006, Equatorial Guinea 2007, China 2006, Israel 2008, UK 2007 and the Netherlands 2005. |
Comprehensive Income
Comprehensive Income (Loss) | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Comprehensive Income (Loss) | Note 13.Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and certain items recorded directly to shareholders equity and classified as AOCL. Comprehensive income (loss) was calculated as follows: Three Months Ended March31, 2010 2009 (millions) Net Income (Loss) $ 237 $ (188 ) Other Items of Comprehensive Income (Loss) Oil and Gas Cash Flow Hedges Realized Losses Reclassified Into Earnings 6 17 Less Tax Provision (2 ) (6 ) Interest Rate Cash Flow Hedges Unrealized Change in Fair Value (11 ) - Less Tax Provision 4 - Net Change in Other - (1 ) Other Comprehensive Income (Loss) (3 ) 10 Comprehensive Income (Loss) $ 234 $ (178 ) |
Segment Information
Segment Information | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Segment Information | Note 14.Segment Information We have operations throughout the world and manage our operations by country. The following information is grouped into five components that are all primarily in the business of crude oil and natural gas exploration and production:the United States; West Africa (Equatorial Guinea and Cameroon); Eastern Mediterranean (Israel and Cyprus); the North Sea (UK and the Netherlands); and Other International and Corporate. The following data was prepared on the same basis as our consolidated financial statements and excludes the effects of income taxes. Consolidated United States West Africa Eastern Mediter-ranean North Sea Other Int'l, Corporate (1) (millions) Three Months Ended March 31, 2010 Revenues from Third Parties $ 713 $ 510 $ 61 $ 33 $ 66 $ 43 Reclassification from AOCL (2) (6 ) (6 ) - - - - Income from Equity Method Investees 26 - 26 - - - Total Revenues 733 504 87 33 66 43 DDA 216 181 8 4 15 8 Gain on Commodity Derivative Instruments (145 ) (145 ) - - - - Income (Loss) Before Income Taxes 343 289 66 26 36 (74 ) Three Months Ended March 31, 2009 Revenues from Third Parties $ 447 $ 289 $ 58 $ 28 $ 34 $ 38 Reclassification from AOCL (2) (17 ) (9 ) (8 ) - - - Income from Equity Method Investees 11 - 11 - - - Total Revenues 441 280 61 28 34 38 DDA 200 169 9 5 9 8 Asset Impairments 437 437 - - - - Gain on Commodity Derivative Instruments (73 ) (67 ) (6 ) - - - Income (Loss) Before Income Taxes (374 ) (409 ) 42 21 11 (39 ) Total Assets at March 31, 2010 (3) 12,452 9,228 1,795 533 671 225 Total Assets at December 31, 2009 (3) 11,807 8,669 1,731 486 635 286 (1) Other international includes operations in China and Ecuador. (2) Revenues include decreases resulting from hedging activities. The decreases resulted from hedge gains and losses that were deferred in AOCL, as a result of previous cash flow hedge accounting, and subsequently reclassified to revenues. (3) The US reporting unit includes goodwill of $757 million at March 31, 2010 and $758 million at December 31, 2009. |
Commitments and Contingencies
Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
Commitments and Contingencies | Note 15.Commitments and Contingencies Legal Proceedings We are involved in various legal proceedings in the ordinary course of business.These proceedings are subject to the uncertainties inherent in any litigation.We are defending ourselves vigorously in all such matters and we believe that the ultimate disposition of such proceedings will not have a material adverse effect on our financial position, results of operations or cash flows. |
Document Information
Document Information | |
3 Months Ended
Mar. 31, 2010 | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2010-03-31 |
Entity Information
Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | Apr. 16, 2010
| Jun. 30, 2009
| |
Entity [Text Block] | |||
Entity Registrant Name | NOBLE ENERGY INC | ||
Entity Central Index Key | 0000072207 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $10,100,000,000 | ||
Entity Common Stock, Shares Outstanding | 174,624,653 | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 |