Attached files
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| 8-K - 8-K - NOBLE ENERGY INC | a12312012-form8xkpressrele.htm |
Exhibit 99.1
NEWS RELEASE | |||
NOBLE ENERGY ANNOUNCES FOURTH QUARTER AND FULL YEAR 2012 RESULTS,
INCLUDING RECORD SALES VOLUMES AND CASH FLOW
HOUSTON (February 7, 2013) -- Noble Energy, Inc. (NYSE: NBL) reported today fourth quarter 2012 net income of $251 million, or $1.39 per share diluted, and net income from continuing operations(1) of $277 million, or $1.54 per share diluted. Excluding the impact of an unrealized commodity derivatives gain and an asset impairment charge, fourth quarter 2012 adjusted net income from continuing operations(2) was $296 million, or $1.65 per share diluted. During the fourth quarter 2011, the Company had a net loss from continuing operations of $314 million, or $1.77 per share diluted, and adjusted net income from continuing operations(2) of $277 million, or $1.55 per share diluted.
Discretionary cash flow from continuing operations(2) for the fourth quarter 2012 was a record $824 million compared to $710 million for the same quarter in 2011. Net cash provided by operating activities was $762 million and capital expenditures(3) for the quarter were $1.1 billion.
Key highlights for the fourth quarter of 2012 include:
• | Record quarterly cash flow of $824 million and record annual cash flow of $2.9 billion for 2012 |
• | Record sales volume from continuing operations of 255 thousand barrels of oil equivalent per day (MBoe/d) and 239 MBoe/d for the year |
• | DJ Basin volumes increased to 86 MBoe/d with horizontal production contributing 39 MBoe/d, 45 percent of the total volumes |
• | Production in the Marcellus Shale averaged 121 million cubic feet equivalent per day (MMcfe/d) net, a 19 percent increase over third quarter 2012 |
• | Discovery at Big Bend in the Gulf of Mexico |
• | New reservoir discovery at Carla offshore Equatorial Guinea |
• | Tamar platform installed and commissioning process initiated |
• | Announced a strategic partner in the Leviathan leases offshore Israel |
Noble Energy reported full year 2012 net income of $1.0 billion, or $5.71 per share diluted, compared to net income of $453 million, or $2.54 per share diluted, in 2011. Adjusted net income from continuing operations(1) for 2012 was $889 million, or $4.95 per share diluted, compared to $904 million, or $5.06 per share diluted, in 2011. Discretionary cash flow from continuing operations(1) was $2.9 billion for the year, up 21 percent from 2011, and net cash provided by operating activities for the year was $2.9 billion, up 32 percent from 2011. Total year capital expenditures(2) were $3.6 billion.
Charles D. Davidson, Noble Energy's Chairman and CEO, commented, “Delivering record quarterly cash flow of more than $800 million in the fourth quarter was an excellent culmination to an exciting year of growth for Noble Energy and has set the stage for an even better year in 2013. Record sales, with liquids accounting for 47 percent of the volumes, were a strong contributor to the quarterly results. In particular, crude and condensate sales grew more than 17 percent from the previous quarter. In 2013, we anticipate another exciting year of growth as we deliver 20 percent production growth over 2012 after adjusting for our 2012 property sales. We plan to bring Tamar and Alen to first production while continuing to grow our U.S. production from the DJ Basin and Marcellus. To support future growth, we intend to sanction this year another wave of major projects that will likely include a Phase 2 of Tamar in Israel, a Phase 1 of Leviathan also in Israel, Carla offshore West Africa, and Gunflint and Big Bend in the Gulf of Mexico. While we move these projects into development, we will also be testing significant exploration prospects including the Paraiso well offshore Nicaragua, Leviathan deep offshore Israel, and multiple prospects in the Gulf of Mexico.”
Fourth quarter 2012 sales volumes from continuing operations averaged 255 MBoe/d, up 18 percent from the fourth quarter 2011, after adjusting for assets divested in 2012. Production volumes were 254 MBoe/d with the difference attributable to the timing of crude oil liftings in Equatorial Guinea. The sales volume split for the quarter was 47 percent liquids, 24 percent international natural gas, and 29 percent U.S. natural gas.
U.S. volumes totaled 149 MBoe/d for the fourth quarter 2012, up 31 percent from the same quarter last year excluding volumes from divested assets. The increase was attributed to growth from the horizontal plays in the DJ Basin and Marcellus, and from the Gulf of Mexico largely due to the addition of Galapagos. Natural production declines were experienced in the remaining non-core U.S. assets.
Sales volumes from international assets were 106 MBoe/d for the final quarter of 2012, an increase of 9 percent from the fourth quarter of 2011, excluding volumes from discontinued operations in the UK. The increase was due to production from the Aseng oil project offshore Equatorial Guinea offset slightly by lower natural gas sales in Israel.
Crude oil prices averaged $97.98 per barrel, down 2 percent versus the fourth quarter 2011. Natural gas realizations in the U.S. averaged $3.09 per thousand cubic feet (Mcf), down 10 percent from the fourth quarter of 2011, and averaged $5.29 per Mcf in Israel. Natural gas liquid pricing in the U.S. averaged $36.86 per barrel for the quarter, representing 40 percent of the Company's average U.S. crude oil realization.
Total production costs per barrel of oil equivalent (Boe), including lease operating expense (LOE), production and ad valorem taxes, and transportation were $7.97 per Boe, up 1 percent from the last quarter of 2011. LOE and depreciation, depletion, and amortization (DD&A) per Boe were $5.20 and $16.33, respectively. LOE rates were impacted primarily by an increase in facilities costs in the Gulf of Mexico. The increase in DD&A rates were due to increased liquids production from the DJ Basin and Gulf of Mexico, as well as the addition of natural gas production from the Noa and Pinnacles fields offshore Israel. Exploration expense for the fourth quarter 2012 was $86 million, which included costs associated with seismic acquisition in Nevada and offshore Falkland Islands. General and administrative expenses were up primarily due to increased staffing for major development and exploration activities. The Company recorded a $31 million asset impairment related to Mari-B offshore Israel. The adjusted effective tax rate for the fourth quarter 2012 was 19 percent with 45 percent deferred.
OPERATIONS UPDATE
In the DJ Basin, production averaged 86 MBoe/d for the fourth quarter, a 15 percent increase over last quarter. The horizontal program accounted for 39 MBoe/d of production, 45 percent of the total. Crude oil and other liquid sales rose to 51 thousand barrels of oil per day (MBbl/d) or 59 percent. In the quarter, 53 wells were drilled and 63 were completed - contributing to full year totals of 200 wells drilled and 193 completed. Six of the wells drilled in the quarter were extended-reach lateral wells. Average production from three initial extended-reach lateral wells is showing minimal decline and appears to be exceeding the 750 thousand Boe type curve. All 15 wells in the 40-acre spacing pilot program were completed and are in early stages of flowback operations. The Company operated eight rigs in the DJ Basin with two in Northern Colorado and six in the Greater Wattenberg Area. To support the development programs in Northern Colorado, the Company sanctioned the development of the Keota Gas Plant with a processing capacity of 30 million cubic feet per day (MMcf/d). Noble Energy will operate the plant, which is scheduled to start up in the second quarter of 2014.
In the Marcellus Shale, net production averaged 121 MMcfe/d for the fourth quarter, up 19 percent from last quarter. The Company operated three horizontal rigs in the wet gas area where 20 wells from three pads are online. Production from the wet gas area was 14 MMcfe/d net for the quarter. In the dry gas area, Consol operated two rigs and production averaged 107 MMcf/d net for the quarter. Noble Energy
and Consol drilled a total of 25 wells and brought 13 online during the quarter contributing to full year totals of 89 and 71 wells, respectively.
In the Eastern Mediterranean, contribution from the Noa and Pinnacles fields resulted in production of 118 MMcf/d net, essentially unchanged from the previous quarter. The Tamar jacket and topside facilities were installed in December and commissioning operations have begun. Initial production is scheduled to commence in April and be combined with Mari-B platform production to meet the growing domestic demand. The appraisal of Leviathan continues with the Leviathan 4 well currently drilling.
PROVED RESERVES
Estimated reserves at year-end 2012 were approximately 1.2 billion barrels of oil equivalent (BBoe), up 3 percent after adjusting for non-core asset divestitures. Reserves in the U.S. accounted for 49 percent of the total, with International contributing the remaining 51 percent. Reserves are split 30 percent global liquids, 42 percent international natural gas, and 28 percent U.S. natural gas.
Noble Energy added total proved reserves of 121 million barrels of oil equivalent (MMBoe) in 2012, including revisions. These additions replaced 136 percent of 2012 production.
U.S. net additions of 105 MMBoe resulted in 207 percent replacement of U.S. production and were driven by the horizontal drilling programs in the DJ Basin and Marcellus Shale. These net additions included negative revisions of 94 MMBoe associated with the termination of the vertical program in Wattenberg and 26 MMBoe associated with dry gas fields due to lower natural gas prices.
The international portfolio added net 16 MMBoe of reserves, or 42 percent replacement of international production, with most of the additions due to strong reservoir performance at Aseng and further appraisal of Tamar. No proved reserves have been booked for major projects expected to be sanctioned in 2013, including Leviathan.
UPDATED GUIDANCE
The full year volume guidance range for 2013 remains unchanged at 270 to 282 MBoe/d. First quarter 2013 volumes are expected to average 238 to 242 MBoe/d. The volume forecast for the first quarter includes over 4 thousand barrels of oil per day underliftings in West Africa and the impact of maintenance at Swordfish in the Gulf of Mexico. Volumes will ramp up throughout the year with the initiation of production at Tamar in April and at Alen in the third quarter, as well as from the continued acceleration of activity in the DJ Basin and the Marcellus Shale wet gas area.
Expense guidance ranges for the year are also unchanged. Unit rates in the first quarter for LOE are expected to average $6.20 to $6.60 per Boe.
(1) | Noble Energy has divested the majority of its North Sea properties and has reclassified the results of its entire North Sea operations as discontinued operations for all accounting periods presented in this release. See Schedule 7 for a financial summary of discontinued operations. |
(2)A Non-GAAP measure, see attached Reconciliation Schedules
(3)Capital expenditures exclude the second installment payment associated with the Marcellus acquisition
WEBCAST AND CONFERENCE CALL INFORMATION
Noble Energy, Inc. will host a webcast and conference call at 9:00 a.m. Central time today. The webcast is accessible on the 'Investors' page at www.nobleenergyinc.com. Conference call numbers for participation are 888-293-6979 or 719-325-2289 with the passcode 4391329. A replay will be available on the website.
Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.
Investor Contacts:
David Larson
(281) 872-3125 dlarson@nobleenergyinc.com
Eric Schneider, CFA
(281) 872-2640 eschneider@nobleenergyinc.com
Media Inquiries:
Communications and Government Relations
(281) 876-8873 media@nobleenergyinc.com
This news release contains certain “forward-looking statements” within the meaning of federal securities law. Words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy' s current views about future events. They include estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this news release will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's business that are discussed in its most recent annual report on Form 10-K and in other reports on file with the Securities and Exchange Commission. These reports are also available from Noble Energy's offices or website, http://www.nobleenergyinc.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not
assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
This news release also contains certain historical and forward-looking non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Energy's overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please also see Noble Energy's website at http://www.nobleenergyinc.com under “Investors” for reconciliations of the differences between any historical non-GAAP measures used in this news release and the most directly comparable GAAP financial measures. The GAAP measures most comparable to the forward-looking non-GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort.
Schedule 1
Noble Energy, Inc.
Reconciliation of Net Income to Adjusted Net Income from Continuing Operations
(in millions, except per share amounts, unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
2012 | Per Share, Diluted | 2011 | Per Share, Diluted | 2012 | Per Share, Diluted | 2011 | Per Share, Diluted | |||||||||||||||||||||||||
Net Income | $ | 251 | $ | 1.39 | $ | (296 | ) | $ | (1.67 | ) | $ | 1,027 | $ | 5.71 | $ | 453 | $ | 2.54 | ||||||||||||||
Discontinued Operations, Net of Tax | 26 | 0.15 | (18 | ) | (0.10 | ) | (62 | ) | (0.34 | ) | (41 | ) | (0.23 | ) | ||||||||||||||||||
Income from Continuing Operations | 277 | 1.54 | (314 | ) | (1.77 | ) | 965 | 5.37 | 412 | 2.31 | ||||||||||||||||||||||
Unrealized (gains) losses on commodity derivative instruments | (36 | ) | (0.20 | ) | 162 | 0.91 | (109 | ) | (0.61 | ) | 22 | 0.12 | ||||||||||||||||||||
(Gain) loss on divestitures [1] | 13 | 0.07 | 1 | 0.01 | (154 | ) | (0.85 | ) | (25 | ) | (0.14 | ) | ||||||||||||||||||||
Asset impairments [2] | 31 | 0.18 | 620 | 3.48 | 104 | 0.58 | 757 | 4.24 | ||||||||||||||||||||||||
Drilling rig expense [3] | — | — | — | — | — | — | 18 | 0.10 | ||||||||||||||||||||||||
Other adjustments | — | — | (1 | ) | (0.01 | ) | — | — | 4 | 0.02 | ||||||||||||||||||||||
Total adjustments before tax | 8 | 0.05 | 782 | 4.39 | (159 | ) | (0.88 | ) | 776 | 4.34 | ||||||||||||||||||||||
Income Tax Effect of Adjustments [4] | 11 | 0.06 | (191 | ) | (1.07 | ) | 83 | 0.46 | (284 | ) | (1.59 | ) | ||||||||||||||||||||
Adjusted Net Income from Continuing Operations | $ | 296 | $ | 1.65 | $ | 277 | $ | 1.55 | $ | 889 | $ | 4.95 | $ | 904 | $ | 5.06 | ||||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||||||||||||||
Diluted | 180 | 177 | 180 | 179 | ||||||||||||||||||||||||||||
NOTE: | Adjusted net income from continuing operations should not be considered a substitute for net income as reported in accordance with GAAP. Adjusted net income from continuing operations is provided for comparison to earnings forecasts prepared by analysts and other third parties. Our management believes, and certain investors may find, that adjusted net income from continuing operations is beneficial in evaluating our financial performance as it excludes the impact of significant non-cash items. We believe such measures can facilitate comparisons of operating performance between periods and with our peers. See Schedule 2: Summary Statement of Operations |
[1] | During the third quarter of 2012, we completed the sale of certain non-core onshore U.S. properties as well as certain North Sea properties. During the second quarter of 2011, we completed the transfer of assets and exit from Ecuador. |
[2] | Amount for 2012 represents impairments of our South Raton assets in the Deepwater Gulf of Mexico, due to declines in near-term crude oil prices, our Piceance development onshore U.S., because of recent declines in realized natural gas prices, and the fourth quarter impairment of our Mari-B, Pinnacles and Noa fields, offshore Israel due to end-of-field life declines in production. Amount for 2011 represents impairments of certain of our onshore U.S. developments, primarily in East Texas due to field performance combined with a significant decline in natural gas prices, specifically during fourth quarter 2011. |
[3] | Amount for 2011 represents stand-by rig expense incurred prior to receiving permits to resume drilling activities, which were suspended under the Federal Deepwater Moratorium, in the deepwater Gulf of Mexico. |
[4] | The net tax effects are determined by calculating the tax provision for GAAP Net Income, which includes the adjusting items, and comparing the results to the tax provision for adjusted earnings from continuing operations, which excludes the adjusting items. The difference in the tax provision calculations represents the tax impact of the adjusting items listed here. The calculation is performed at the end of each quarter and, as a result, the tax rates for each discrete period may be different. |
Schedule 2
Noble Energy, Inc.
Summary Statement of Operations
(in millions, except per share amounts, unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues | ||||||||||||||||
Crude oil and condensate | $ | 866 | $ | 571 | $ | 3,205 | $ | 2,034 | ||||||||
Natural gas | 191 | 213 | 620 | 883 | ||||||||||||
NGLs | 55 | 67 | 212 | 262 | ||||||||||||
Income from equity method investees | 55 | 46 | 186 | 193 | ||||||||||||
Other revenues | — | — | — | 32 | ||||||||||||
Total revenues | 1,167 | 897 | 4,223 | 3,404 | ||||||||||||
Operating Expenses | ||||||||||||||||
Lease operating expense | 122 | 96 | 431 | 346 | ||||||||||||
Production and ad valorem taxes | 39 | 38 | 151 | 146 | ||||||||||||
Transportation and gathering expense | 26 | 19 | 91 | 66 | ||||||||||||
Exploration expense | 86 | 85 | 409 | 277 | ||||||||||||
Depreciation, depletion and amortization | 383 | 259 | 1,370 | 878 | ||||||||||||
General and administrative | 98 | 87 | 384 | 339 | ||||||||||||
(Gain) loss on divestitures | 13 | 1 | (154 | ) | (25 | ) | ||||||||||
Asset impairments | 31 | 620 | 104 | 757 | ||||||||||||
Other operating (income) expense, net | 8 | 39 | 25 | 86 | ||||||||||||
Total operating expenses | 806 | 1,244 | 2,811 | 2,870 | ||||||||||||
Operating Income | 361 | (347 | ) | 1,412 | 534 | |||||||||||
Other (Income) Expense | ||||||||||||||||
(Gain) Loss on commodity derivative instruments | (29 | ) | 136 | (75 | ) | (42 | ) | |||||||||
Interest, net of amount capitalized | 30 | 14 | 125 | 65 | ||||||||||||
Other (income) expense, net | 4 | 25 | 6 | 9 | ||||||||||||
Total other (income) expense | 5 | 175 | 56 | 32 | ||||||||||||
Income (Loss) from Continuing Operations Before Taxes | 356 | (522 | ) | 1,356 | 502 | |||||||||||
Income Tax Provision (Benefit) | 79 | (208 | ) | 391 | 90 | |||||||||||
Income (Loss) from Continuing Operations | 277 | (314 | ) | 965 | 412 | |||||||||||
Discontinued Operations, Net of Tax [1] | (26 | ) | 18 | 62 | 41 | |||||||||||
Net Income (Loss) | $ | 251 | $ | (296 | ) | $ | 1,027 | $ | 453 | |||||||
Earnings Per Share | ||||||||||||||||
Basic | ||||||||||||||||
Income (Loss) from continuing operations | $ | 1.56 | $ | (1.77 | ) | $ | 5.43 | $ | 2.34 | |||||||
Discontinued operations, net of tax | (0.15 | ) | 0.10 | 0.34 | 0.23 | |||||||||||
Net Income (Loss) | $ | 1.41 | $ | (1.67 | ) | $ | 5.77 | $ | 2.57 | |||||||
Diluted | ||||||||||||||||
Income (Loss) from continuing operations | $ | 1.54 | $ | (1.77 | ) | $ | 5.37 | $ | 2.31 | |||||||
Discontinued operations, net of tax | (0.15 | ) | 0.10 | 0.34 | 0.23 | |||||||||||
Net Income (Loss) | $ | 1.39 | $ | (1.67 | ) | $ | 5.71 | $ | 2.54 | |||||||
Weighted average number of shares outstanding | ||||||||||||||||
Basic | 178 | 177 | 178 | 176 | ||||||||||||
Diluted | 180 | 177 | 180 | 179 | ||||||||||||
[1] | Represents our North Sea operations reclassified as held for sale at June 30, 2012. See Schedule 7: Discontinued Operations. |
Schedule 3
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Crude Oil and Condensate Sales Volumes (MBbl/d) | ||||||||||||||||
United States | 58 | 39 | 49 | 38 | ||||||||||||
Equatorial Guinea | 34 | 19 | 33 | 14 | ||||||||||||
China | 4 | 4 | 4 | 4 | ||||||||||||
Total consolidated operations | 96 | 62 | 86 | 56 | ||||||||||||
Equity method investee | 2 | 2 | 2 | 2 | ||||||||||||
Total sales volumes | 98 | 64 | 88 | 58 | ||||||||||||
Crude Oil and Condensate Realized Prices ($/Bbl) | ||||||||||||||||
United States | $ | 91.08 | $ | 95.45 | $ | 94.69 | $ | 95.19 | ||||||||
Equatorial Guinea | 108.62 | 105.90 | 110.14 | 107.57 | ||||||||||||
China | 106.06 | 109.37 | 114.54 | 106.19 | ||||||||||||
Consolidated average realized prices | $ | 97.98 | $ | 99.62 | $ | 101.52 | $ | 99.17 | ||||||||
Natural Gas Sales Volumes (MMcf/d) | ||||||||||||||||
United States | 447 | 432 | 438 | 388 | ||||||||||||
Equatorial Guinea | 245 | 250 | 235 | 245 | ||||||||||||
Israel | 118 | 150 | 101 | 173 | ||||||||||||
Total consolidated operations | 810 | 832 | 774 | 806 | ||||||||||||
Natural Gas Realized Prices ($/Mcf) | ||||||||||||||||
United States | $ | 3.09 | $ | 3.42 | $ | 2.61 | $ | 3.90 | ||||||||
Equatorial Guinea | 0.27 | 0.27 | 0.27 | 0.27 | ||||||||||||
Israel | 5.29 | 5.10 | 4.85 | 4.86 | ||||||||||||
Consolidated average realized prices | $ | 2.56 | $ | 2.78 | $ | 2.19 | $ | 3.00 | ||||||||
Natural Gas Liquids (NGL) Sales Volumes (MBbl/d) | ||||||||||||||||
United States | 17 | 16 | 16 | 15 | ||||||||||||
Equity method investee | 5 | 6 | 5 | 5 | ||||||||||||
Total sales volumes | 22 | 22 | 21 | 20 | ||||||||||||
Natural Gas Liquids Realized Prices ($/Bbl) | ||||||||||||||||
United States | $ | 36.86 | $ | 46.11 | $ | 35.36 | $ | 48.35 | ||||||||
Barrels of Oil Equivalent Volumes (MBoe/d) | ||||||||||||||||
United States | 149 | 127 | 139 | 117 | ||||||||||||
Equatorial Guinea | 75 | 61 | 72 | 56 | ||||||||||||
Israel | 20 | 25 | 17 | 29 | ||||||||||||
China | 4 | 4 | 4 | 4 | ||||||||||||
Total consolidated operations | 248 | 217 | 232 | 206 | ||||||||||||
Equity method investee | 7 | 7 | 7 | 7 | ||||||||||||
Total barrels of oil equivalent from continuing operations | 255 | 224 | 239 | 213 | ||||||||||||
Total barrels of oil equivalent from discontinued operations [1] | 2 | 9 | 5 | 9 | ||||||||||||
Total barrels of oil equivalent | 257 | 233 | 244 | 222 | ||||||||||||
[1] | Represents our North Sea operations reclassified as held for sale at June 30, 2012. See Schedule 7: Discontinued Operations. |
Schedule 4
Noble Energy, Inc.
Condensed Balance Sheets
(in millions)
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 1,387 | $ | 1,455 | ||||
Accounts receivable, net | 964 | 783 | ||||||
Other current assets | 420 | 180 | ||||||
Total current assets | 2,771 | 2,418 | ||||||
Net property, plant and equipment | 13,551 | 12,782 | ||||||
Goodwill | 635 | 696 | ||||||
Other noncurrent assets | 597 | 548 | ||||||
Total Assets | $ | 17,554 | $ | 16,444 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable - trade | $ | 1,508 | $ | 1,343 | ||||
Other current liabilities | 1,024 | 925 | ||||||
Total current liabilities | 2,532 | 2,268 | ||||||
Long-term debt | 3,736 | 4,100 | ||||||
Deferred income taxes | 2,218 | 2,059 | ||||||
Other noncurrent liabilities | 810 | 752 | ||||||
Total Liabilities | 9,296 | 9,179 | ||||||
Total Shareholders’ Equity | 8,258 | 7,265 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 17,554 | $ | 16,444 | ||||
Schedule 5
Noble Energy, Inc.
Discretionary Cash Flow from Continuing Operations and Reconciliation to Operating Cash Flow
(in millions, unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Adjusted Net Income from Continuing Operations [1] | $ | 296 | $ | 277 | $ | 889 | $ | 904 | ||||||||
Adjustments to reconcile adjusted net income from continuing operations to discretionary cash flow from continuing operations: | ||||||||||||||||
Depreciation, depletion and amortization | 383 | 259 | 1,370 | 878 | ||||||||||||
Exploration expense | 86 | 86 | 409 | 277 | ||||||||||||
(Income)/Dividends from equity method investments, net | 3 | 7 | 7 | 30 | ||||||||||||
Deferred compensation (income) expense | 8 | 23 | 6 | 8 | ||||||||||||
Deferred income taxes | 32 | 34 | 149 | 207 | ||||||||||||
Stock-based compensation expense | 16 | 15 | 65 | 58 | ||||||||||||
Other | — | 9 | (1 | ) | 10 | |||||||||||
Discretionary Cash Flow from Continuing Operations | $ | 824 | $ | 710 | $ | 2,894 | $ | 2,372 | ||||||||
Reconciliation to Operating Cash Flows | ||||||||||||||||
Net changes in working capital | (7 | ) | (259 | ) | 134 | (156 | ) | |||||||||
Cash exploration costs | (66 | ) | (35 | ) | (193 | ) | (173 | ) | ||||||||
Current tax expense of earnings adjustments | 18 | 5 | — | — | ||||||||||||
Drilling rig expense [2] | — | — | — | (18 | ) | |||||||||||
Impact of Discontinued Operations | (9 | ) | (36 | ) | 82 | 126 | ||||||||||
Other adjustments | 2 | — | 16 | 19 | ||||||||||||
Net Cash Provided by Operating Activities | $ | 762 | $ | 385 | $ | 2,933 | $ | 2,170 | ||||||||
Capital expenditures (accrual based) | $ | 1,083 | $ | 1,041 | $ | 3,626 | $ | 3,026 | ||||||||
Marcellus Shale Asset Acquisition [3] | — | 75 | — | 1,308 | ||||||||||||
Increase in FPSO lease obligation | — | 10 | — | 66 | ||||||||||||
Total Capital Expenditures (Accrual Based) | $ | 1,083 | $ | 1,126 | $ | 3,626 | $ | 4,400 | ||||||||
NOTE: | The table above reconciles discretionary cash flow from continuing operations to net cash provided by operating activities. While discretionary cash flow from continuing operations is not a GAAP measure of financial performance, our management believes it is a useful tool for evaluating our overall financial performance. Among our management, research analysts, portfolio managers and investors, discretionary cash flow from continuing operations is broadly used as an indicator of a company’s ability to fund exploration and production activities and meet financial obligations. Discretionary cash flow from continuing operations is also commonly used as a basis to value and compare companies in the oil and gas industry. |
[1] | See Schedule 1: Reconciliation of Net Income to Adjusted Net Income from Continuing Operations. |
[2] | Amount for 2011 represents stand-by rig expense incurred prior to receiving permits to resume drilling activities, which were suspended under the Federal Deepwater Moratorium, in the deepwater Gulf of Mexico. |
[3] | Includes $73 million representing our initial investment in CONE Gathering LLC for year-ended 2011. |
Schedule 6
Noble Energy, Inc.
Effect of Commodity Derivative Instruments
(in millions, unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Gain) Loss on Commodity Derivative Instruments | ||||||||||||||||
Crude Oil | ||||||||||||||||
Realized | $ | 15 | $ | 8 | $ | 83 | $ | 44 | ||||||||
Unrealized | (24 | ) | 173 | (120 | ) | 5 | ||||||||||
Total Crude Oil | (9 | ) | 181 | (37 | ) | 49 | ||||||||||
Natural Gas | ||||||||||||||||
Realized | (9 | ) | (33 | ) | (49 | ) | (108 | ) | ||||||||
Unrealized | (12 | ) | (11 | ) | 11 | 17 | ||||||||||
Total Natural Gas | (21 | ) | (44 | ) | (38 | ) | (91 | ) | ||||||||
Total (Gain) Loss on Commodity Derivative Instruments | $ | (30 | ) | $ | 137 | $ | (75 | ) | $ | (42 | ) | |||||
Schedule 7
Noble Energy, Inc.
Discontinued Operations
(in millions, except volume amounts, unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Summary Statement of Discontinued Operations: | ||||||||||||||||
Oil and gas revenues | $ | 14 | $ | 86 | $ | 208 | $ | 357 | ||||||||
Production expense | 5 | 15 | 44 | 58 | ||||||||||||
Exploration expense | 26 | — | 29 | 2 | ||||||||||||
Depreciation, depletion and amortization | — | 25 | 33 | 87 | ||||||||||||
General and administrative | 1 | — | 3 | 2 | ||||||||||||
Asset impairments | — | — | — | 2 | ||||||||||||
Other (income) expense, net | (3 | ) | (6 | ) | (2 | ) | (9 | ) | ||||||||
Income (Loss) Before Income Taxes | (15 | ) | 52 | 101 | 215 | |||||||||||
Current tax expense | 16 | 31 | 80 | 175 | ||||||||||||
Deferred tax expense (benefit) | (11 | ) | 3 | (25 | ) | (1 | ) | |||||||||
Operating Income (Loss), Net of Tax | (20 | ) | 18 | 46 | 41 | |||||||||||
Gain (Loss) on Sale, Net of Tax | (6 | ) | — | 16 | — | |||||||||||
Income (Loss) From Discontinued Operations | $ | (26 | ) | $ | 18 | $ | 62 | $ | 41 | |||||||
Volume and Price Statistics: | ||||||||||||||||
Crude Oil and Condensate Sales Volumes (MBbl/d) | 1 | 8 | 5 | 8 | ||||||||||||
Crude Oil and Condensate Realized Prices ($/Bbl) | $ | 109.56 | $ | 112.90 | $ | 112.94 | $ | 112.97 | ||||||||
Natural Gas Sales Volumes (MMcf/d) | 5 | 4 | 4 | 5 | ||||||||||||
Natural Gas Realized Prices ($/Mcf) | $ | 9.39 | $ | 9.09 | $ | 8.62 | $ | 8.11 | ||||||||
Schedule 8
Noble Energy, Inc.
Supplemental Data
(in millions, unaudited)
2012 Costs Incurred in Oil and Gas Activities | United States | Int’l [1] | Total | |||||||||
Unproved property acquisition costs | 68 | 28 | 96 | |||||||||
Exploration costs | 335 | 354 | 689 | |||||||||
Development costs [2] | 1,839 | 1,154 | 2,993 | |||||||||
Total costs incurred | $ | 2,242 | $ | 1,536 | $ | 3,778 | ||||||
Reconciliation to Capital Spending (accrual basis) | ||||||||||||
Total costs incurred | $ | 3,778 | ||||||||||
Exploration overhead | (110 | ) | ||||||||||
Lease rentals | (7 | ) | ||||||||||
Asset retirement obligations | (145 | ) | ||||||||||
Total oil and gas spending | 3,516 | |||||||||||
CONE LLC investment | 41 | |||||||||||
Other capital | 69 | |||||||||||
Total capital spending (accrual basis) | $ | 3,626 | ||||||||||
Proved Reserves [3] | United States | Int’l [4] | Total | |||||||||
Total Barrel Oil Equivalents (MMBoe) | ||||||||||||
Beginning reserves - December 31, 2011 | 573 | 636 | 1,209 | |||||||||
Revisions of previous estimates | (101 | ) | 4 | (97 | ) | |||||||
Extensions, discoveries and other additions | 206 | 12 | 218 | |||||||||
Purchase of minerals in place | — | — | — | |||||||||
Sale of minerals in place | (52 | ) | (5 | ) | (57 | ) | ||||||
Production | (51 | ) | (38 | ) | (89 | ) | ||||||
Ending reserves - December 31, 2012 | 575 | 609 | 1,184 | |||||||||
Proved Developed Reserves (MMBoe) | ||||||||||||
December 31, 2011 | 333 | 171 | 504 | |||||||||
December 31, 2012 | 303 | 158 | 461 | |||||||||
[1] | International includes Cameroon, China, Cyprus, Equatorial Guinea, Falkland Islands, Israel, the North Sea, Senegal/Guinea-Bissau, Nicaragua, Sierra Leone and other new ventures. |
[2] | Includes ARO costs of $73 million for United States and $72 million for Int'l. |
[3] | Netherland, Sewell & Associates, Inc. performed a reserves audit for 2012 and concluded that the Company's estimates of proved reserves were, in the aggregate, reasonable and have been prepared in accordance with Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. |
[4] | International includes China, Equatorial Guinea, Israel, and the North Sea. |