Exhibit 99.1
[GRAPHIC OMITTED][GRAPHIC OMITTED] PRESS RELEASE
100 Glenborough Drive Contact: Greg Panagos: 281-872-3125
Suite 100 Investor_Relations@nobleenergyinc.com
Houston, TX 77067
NOBLE ENERGY EXPANDS INTO ROCKIES AND MID-CONTINENT
WITH $3.4 BILLION ACQUISITION OF PATINA OIL & GAS
HOUSTON (December 16, 2004) - Noble Energy, Inc. (NYSE: NBL) and Patina Oil &
Gas Corporation (NYSE: POG) today announced that their boards of directors
approved Noble Energy's strategic acquisition of Patina, which is valued at
approximately $3.4 billion including the assumption of debt. The combined
company will be known as Noble Energy and will be headquartered in Houston,
Texas.
Patina will become a subsidiary of Noble Energy and Patina shareholders will
receive consideration comprised of approximately 60 percent Noble Energy common
stock and 40 percent cash. Based on the closing prices of Noble Energy and
Patina shares on December 15th, the implied acquisition price of $37.89 per
share represents an 18.7 percent premium.
Charles D. Davidson, Chairman, President and CEO of Noble Energy, said, "Patina
has an outstanding domestic, long-lived natural gas focused reserve base that
will strongly complement Noble Energy's growing organic onshore, deepwater and
international operations. This acquisition also provides Noble Energy with
substantial upside in the form of a multi-year inventory of low-risk
exploitation and development opportunities that complement our existing
high-growth portfolio. Patina's assets are located in some of the most prolific
natural gas producing basins in the Rocky Mountain and Mid-continent regions of
the United States, where Noble Energy already has initiatives in place to
expand operations prior to the transaction."
Thomas J. Edelman, Chairman and CEO of Patina, added, "We believe the sale of
Patina to Noble Energy will provide our shareholders and employees enormously
enhanced opportunities. By combining Patina's exceptional inventory of high
return onshore development and exploitation projects with Noble Energy's strong
portfolio of attractive exploration and development projects internationally
and in the deepwater of the Gulf of Mexico, we instantly achieve a dramatic
diversification of our asset base. In addition, we gain access to the financing
opportunities implicit in Noble Energy's investment grade rating, while greatly
expanding our exposure to high impact exploration projects. Most importantly,
these benefits can be achieved without the risks and delays implicit in trying
to initiate our own offshore and/or international exploration program. Finally,
we have developed an extremely high regard for Chuck Davidson and have
confidence he has the ability to further enhance the combined company. We
believe that the combination of his technical and managerial staff with
Patina's will produce a wonderful team. As the proposed transaction involves a
cash election, shareholders who wish to fully participate in the upside of the
combined enterprise can choose to receive Noble Energy stock subject to
proration. Those wishing to realize the very substantial gains which every
shareholder of Patina has enjoyed can elect to receive cash."
Strategic Benefits:
o Expected to be accretive to earnings and discretionary cash flow per
share in 2005 and beyond
o Substantially improves free cash flow generation capacity
o Increases domestic reserve life more than 50 percent to 9.1 years
o Transforms the Rocky Mountain and Mid-continent regions into
substantial new core areas for Noble Energy
o Enhances the growth profile of Noble Energy's domestic operations
through the addition of a multi-year inventory of
exploitation-oriented projects
o Increases worldwide reserves and production by over 50 percent
o Balances Noble Energy's existing reserve base by increasing domestic
onshore reserves to 45 percent of total reserves
o Enhances technical and operational expertise in onshore tight natural
gas fields
"The addition of Patina's assets, particularly in the Wattenberg field, when
combined with our operations in the Bowdoin field in Montana, the Niobrara
trend in eastern Colorado, the Wind River basin in Wyoming and Piceance basin
in western Colorado will create a new core operating area for Noble Energy in
the Rocky Mountains. Patina's rapidly growing Mid-continent assets will become
a new core area for Noble Energy as well, providing a platform for long-term
production growth. After focusing on international expansion for the past
several years, we are now adding a large base of long-lived production and
low-risk drilling opportunities to complement our high-growth programs," noted
Davidson.
Combined Company:
o Year-end 2003 proved reserves of 710 MMBoe (55 percent domestic, 45
percent international, and 63 percent natural gas, 37 percent
liquids)
o Initial production of approximately 61,400 barrels of oil per day
(Bopd) and 602 million cubic feet per day (MMcfpd) of natural gas, or
161,700 barrels of oil equivalent per day (Boepd)
o Reserve life of 12.0 years at year-end 2003, with a domestic reserve
life of 9.1 years
o Concentrated domestic core operating areas in the Gulf Coast and
deepwater Gulf of Mexico and new core operating areas in the Rocky
Mountain and Mid-continent regions
o Substantial high-potential exploration and development opportunities
in the deepwater Gulf of Mexico, West Africa, Israel, South America,
o Solid balance sheet and financial flexibility, with a net
debt-to-total capitalization ratio of 42 percent that is expected to
decrease substantially over the next two years
2005 Noble Energy Guidance:
In conjunction with the announcement of the transaction, Noble Energy is
issuing guidance for 2005:
Noble Energy Pro Forma
Production Growth 10% 10% - 11%
Production (MBoepd) 175 - 180
LOE/BOE $3.70 - $3.90 $3.50 - $3.75
SG&A/BOE $1.45 - $1.65 $1.15 - $1.35
DD&A/BOE $7.00 - $7.50 $8.25 - $8.75
Exploration (Millions) $140 - $160 $140 - $165
Capital Spending (Millions) $735 $995
Effective Tax Rate 42% 40%
Deferred Tax 20% - 30% 25% - 35%
Hedging:
Noble Energy has executed hedges through 2008 covering volumes averaging
approximately 7,000 Bopd and 80 MMcfpd of natural gas. Noble Energy plans to
continue to execute hedges for production through 2008. The hedges are in the
form of swaps and include an average NYMEX-equivalent natural gas price of
$6.13 per thousand cubic feet (Mcf) and an average NYMEX-equivalent crude oil
price of $38.58 per barrel. Patina plans to remove all of its existing natural
gas and crude oil hedges in conjunction with the closing of this transaction.
Merger Agreement:
Total consideration for the shares of Patina is fixed at approximately $1.1
billion in cash and approximately 27 million Noble Energy shares, not including
options and warrants exchanged in the transaction. Under the terms of the
merger agreement, Patina shareholders will have the right to elect cash or
Noble Energy common stock, subject to a proration if either cash or stock is
oversubscribed. While the per share consideration was initially set in the
merger agreement at $37.00 in cash or .6252 shares of Noble Energy common
stock, the per share consideration is subject to adjustment upwards or
downwards so that each Patina share receives consideration representing equal
value. This adjustment will reflect 37.5126% of the difference between $59.18
and the price of Noble's shares during a specified period prior to closing.
Based on the closing price of $61.54 per share of Noble Energy on December
15th, the adjusted price would be valued at $37.89 per share of Noble Energy
stock.
Chuck Davidson will remain as Noble Energy's Chairman, President and CEO.
Following the completion of the acquisition, Tom Edelman, Patina's current
Chairman and CEO will join Noble Energy's board of directors as will one other
director from Patina's board of directors. Edelman will also serve in a special
advisory capacity to aid in the integration of the two companies. Jay W.
Decker, Patina's current President previously announced that he would be
leaving the company. As a result of this transaction, he has agreed to remain
for a period of time as a consultant to Noble Energy to facilitate the
transition. It is also expected that several of Patina's existing officers will
be joining Noble Energy's leadership team to help lead the newly combined
company. Patina's current office in Denver will be retained and will serve as a
regional office for Noble Energy.
The acquisition is subject to the approval of the shareholders of Patina and
Noble Energy. The boards of directors of both companies have approved the
acquisition. The acquisition is subject to customary conditions, including
approval of listing of the Noble Energy shares to be issued in the acquisition
on the New York Stock Exchange and expiration or termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
acquisition is expected to be completed in March or April of 2005.
Noble Energy and Patina Overview:
The investment plan for Patina's assets in 2005 includes record activity levels
in its core operating areas. Planned 2005 capital expenditures total $260
million, compared to expected 2004 capital expenditures of $230 million. The
2005 capital program for Patina includes nearly 1,100 projects (new wells,
recompletions, refracs and trifracs), compared to 900 projects for 2004. The
details of the 2005 Patina capital program are as follows:
o Wattenberg Field - planned capital expenditures of $131 million for
approximately 750 development projects. The focus will be on the
high-return Codell refrac program and Codell trifrac and Niobrara
programs. Beyond 2005, an inventory of nearly 8,000 proved, probable
and possible development projects remains in the field.
o Mid-continent Region - planned capital expenditures of $96 million
for approximately 230 development projects. The focus will be on
proving new reserves in the prolific Buffalo Wallow field in the
Texas Panhandle and drilling in the Anadarko basin and southern
Oklahoma.
o San Juan Basin and Central Region - planned capital expenditures of
$33 million for approximately 150 development projects. The focus
will be on further development of the Mesaverde and Dakota
formations.
o New Ventures - planned leasing of additional acreage in three active
shale plays that are expected to add growth opportunities. Drilling
is expected to begin in the first half of 2005.
The acquisition of Patina adds to Noble Energy's substantial onshore
development and exploitation projects. Prior to the Patina acquisition, Noble
Energy planned to drill approximately 345 onshore wells in 2005, an increase of
200 wells over 2004 reflecting several new projects. In the Niobrara trend, 235
infill wells are planned following several successful pilots at 40-acre
spacing. In its recently acquired 6,500-acre land position in the Piceance
basin in Colorado, Noble Energy plans to drill 32 wells. Noble Energy is also
testing production on its 27,000-acre Wind River basin position in Wyoming. An
additional 38 wells, primarily exploration and exploitation, are planned for
the Gulf Coast region. Another 25 development wells are planned for the Bowdoin
field. Eight to 10 wells are planned for the Siberia Ridge field in southwest
Wyoming and five to seven wells are planned for the Caspiana field in east
Texas.
With the international expansion nearly complete, international operations are
beginning to generate substantial free cash flow. Over the past several years,
Noble Energy has successfully invested in high-growth international projects.
As a result, the contribution from international operations has increased
significantly. Since 1999, international reserves have increased at an average
annual rate of 23 percent, from 140 million barrels of oil equivalent (MMBoe)
to 322 MMBoe at year-end 2003, while international production has increased
nearly fourfold from approximately 12,000 Boepd in 1999 to approximately 45,000
Boepd by the third quarter 2004.
After several years of international expansion, combining Patina's reserves
with Noble Energy's will help rebalance Noble Energy's proved reserves by
increasing the mix of domestic proved reserves from 30 percent to 55 percent of
Noble Energy's worldwide total. Adding Patina's reserves will also increase
Noble Energy's proved reserves by approximately 55 percent. Patina's reserves
are primarily long-lived domestic natural gas, thus continuing a trend of
reduced reliance on production from the short-lived Gulf of Mexico shallow
shelf.
At year-end 2003, Patina had 253 MMBoe of proved reserves, of which 68 percent
were natural gas reserves primarily located in the Rocky Mountain and
Mid-continent regions. Approximately 54 percent of Patina's proved reserves are
located in the Wattenberg field in the Denver-Julesburg basin. The remaining
proved reserves are located in the Mid-continent region (30 percent), the San
Juan basin (nine percent) and the Central region (seven percent). Netherland
Sewell, an independent third-party reserves consultant, audits approximately 90
percent of Patina's reserves. Patina currently estimates that its proved
reserves will be approximately 263 MMBoe by year-end 2004. Patina has an
additional 214 MMBoe of probable and possible resources located principally in
the Wattenberg field and Mid-continent region.
Patina is currently producing 55,700 Boepd, with 2005 production expected to
increase 12 percent over the 2004 average. Upon completion of the acquisition,
Noble Energy's daily production is expected to increase by approximately 53
percent to 161,700 Boepd. Domestic production is expected to increase from 57
percent of total daily volumes during the third quarter 2004 (59,884 Boepd) to
approximately 70 percent of total daily volumes. Approximately 60 percent of
the combined company's daily production will be natural gas.
Over the past several years, Patina has grown proved reserves, production and
cash flow at a high rate. Reserves have grown at a compounded annual rate of 34
percent, with a five-year average reserve replacement rate of 488 percent.
Patina's compounded annual growth rates for production and cash flow from 1999
through 2003 have averaged 26 percent and 53 percent, respectively. Likewise,
operating cash flow per BOE has increased from $8.64 in 1999 to $20.09 for the
first nine months of 2004.
Of the $3.4 billion purchase price, Noble Energy expects to allocate $2.5
billion to the 263 MMBoe of proved reserves (estimated year-end 2004), or $9.51
per barrel of oil equivalent (BOE) and $0.9 billion to the 214 MMBoe of
probable and possible resources.
Investor Conference Call:
Noble Energy and Patina will host a conference call, with an accompanying
presentation, to discuss the proposed acquisition at 10:00 a.m. Eastern Time,
9:00 a.m. Central Time. The conference call will be webcast at:
www.videonewswire.com/event.asp?id=26380.
The webcast can also be accessed at Noble Energy's and Patina's websites as
follows:
www.Nobleenergyinc.com
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www.Patinaoil.com
Investors may participate in the conference call by telephone dialing
877-888-7019 and asking for the Noble Energy conference call. International
callers may also participate by dialing 416-695-5259. A telephone replay will
be available for 90 days by dialing 888-878-3220 (confirmation code 7127).
International callers may listen to a playback by dialing 416-695-9784
(confirmation code 7127).
Noble Energy is one of the nation's leading independent energy companies and
operates throughout major basins in the United States including the Gulf of
Mexico, as well as internationally, in Argentina, China, Ecuador, Equatorial
Guinea, the Mediterranean Sea and the North Sea. Noble Energy markets natural
gas and crude oil through its subsidiary, Noble Energy Marketing, Inc.
Patina is an independent energy company engaged in the acquisition,
development, exploitation and production of oil and natural gas primarily in
Colorado's Wattenberg Field, the Mid-continent region of western Oklahoma and
the Texas Panhandle, and the San Juan Basin in New Mexico.
J.P. Morgan Securities Inc. acted as financial advisor and Skadden, Arps,
Slate, Meagher & Flom, LLP acted as legal advisor to Noble Energy. Petrie
Parkman & Company acted as financial advisor and Cravath, Swaine & Moore, LLP
acted as legal advisor to Patina.
This communication contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on Noble Energy's and Patina's current
expectations and beliefs and are subject to a number of risks, uncertainties
and assumptions that could cause actual results to differ materially from those
described in the forward-looking statements. Risks, uncertainties and
assumptions include 1) the possibility that the companies may be unable to
obtain stockholder or regulatory approvals required for the acquisition; 2) the
possibility that problems may arise in successfully integrating the businesses
of the two companies; 3) the possibility that the acquisition may involve
unexpected costs; 4) the possibility that the combined company may be unable to
achieve cost-cutting synergies; 5) the possibility that the businesses may
suffer as a result of uncertainty surrounding the acquisition; 6) the
possibility that the industry may be subject to future regulatory or
legislative actions; 7) the volatility in commodity prices for oil and gas; 8)
the presence or recoverability of estimated reserves; 9) the ability to replace
reserves; 10) environmental risks; 11) drilling and operating risks; 12)
exploration and development risks; 13) competition; 14) the ability of
management to execute its plans to meet its goals and other risks that are
described in SEC reports filed by Noble Energy and Patina. Because
forward-looking statements involve risks and uncertainties, actual results and
events may differ materially from results and events currently expected by
Noble Energy and Patina. Noble Energy and Patina assume no obligation and
expressly disclaim any duty to update the information contained herein except
as required by law.
Additional Information About the Acquisition and Where to Find It:
In connection with the proposed acquisition, Noble Energy and Patina will file
relevant materials with the SEC, including one or more registration
statement(s) that contain a prospectus and a joint proxy statement. Investors
and security holders of Noble Energy and Patina are urged to read these
documents (if and when they become available) and any other relevant documents
filed with the SEC, as well as any amendments or supplements to those
documents, because they will contain important information about Noble Energy,
Patina and the acquisition. Investors and security holders may obtain these
documents (and any other documents filed by Noble Energy and Patina with the
SEC) free of charge at the SEC's website at www.sec.gov. In addition, the
documents filed with the SEC by Noble Energy may be obtained free of charge
from Noble Energy's website at www.Nobleenergyinc.com. The documents filed with
the SEC by Patina may be obtained free of charge from Patina's website at
www.Patinaoil.com. Investors and security holders are urged to read the joint
proxy statement/prospectus and the other relevant materials when they become
available before making any voting or investment decision with respect to the
proposed acquisition.
Noble Energy, Patina and their respective executive officers and directors may
be deemed to be participants in the solicitation of proxies from the
stockholders of Noble Energy and Patina in favor of the acquisition.
Information about the executive officers and directors of Noble Energy and
their ownership of Noble Energy common stock is set forth in the proxy
statement for Noble Energy's 2004 Annual Meeting of Stockholders, which was
filed with the SEC in March 2004. Information about the executive officers and
directors of Patina and their ownership of Patina common stock is set forth in
the proxy statement for Patina's 2004 Annual Meeting of Stockholders, which was
filed with the SEC in April 2004. Investors and security holders may obtain
more detailed information regarding the direct and indirect interests of Noble
Energy, Patina and their respective executive officers and directors in the
acquisition by reading the joint proxy statement/prospectus regarding the
acquisition when it becomes available.
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PR
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12/16/04