Noble Energy Announces 2013 Capital Program And Guidance, And Provides Fourth
Quarter 2012 Updates
HOUSTON, Dec. 6, 2012
HOUSTON, Dec. 6, 2012 /PRNewswire/ --Noble Energy, Inc. (NYSE: NBL) today
announced its 2013 capital program and guidance, and provided updates to the
fourth quarter of 2012.
Total capital expenditures are estimated at $3.9 billion for the year. The
capital program allocates 60 percent to onshore U.S., six percent to the
deepwater Gulf of Mexico, 15 percent to West Africa and 10 percent to the
Eastern Mediterranean. Global exploration and appraisal activity is expected
to receive 15 percent of the total capital.
These investments should enable 2013 sales volumes from continuing operations
to average between 270 to 282 thousand barrels of oil equivalent per day
(MBoe/d). The midpoint of this range represents a 20 percent increase over
2012, after adjusting for domestic property sales closed in 2012. The
projected volume increase reflects a 23 percent growth in crude oil and
condensate and a 16 percent growth in natural gas.
Charles D. Davidson, Noble Energy's Chairman and CEO, stated, "Noble Energy is
continuing to deliver our aggressive growth plans announced last year. For a
second straight year, production is projected to grow at strong double-digit
rates. We have accelerated our development in the DJ Basin, which will
receive the greatest portion of our capital program, as well as the drilling
program in the wet gas area of the Marcellus. The Tamar project remains on
target for first production in April of next year, and the schedule for the
Alen project in West Africa has accelerated with first production now expected
in the third quarter of next year. Exploration remains a key component of the
2013 program which will include the testing of several very material
Within the U.S., the Company expects to invest $1.7 billion in the DJ Basin to
accelerate the horizontal Niobrara drilling program to include 300 horizontal
wells in 2013. Approximately 90 wells are located in Northern Colorado and
another 60 will be extended-reach lateral wells focused in the oil window of
Wattenberg. In the Marcellus Shale, $750 million is planned to support the
drilling of 140 joint venture wells, targeting 85 operated wells in the
liquids-rich area of the play. In the deepwater Gulf of Mexico, the Company
expects to invest $250 million where a one-rig program is planned to conduct
appraisal drilling at Gunflint and execute the exploration program.
Noble Energy's international programs in West Africa and the Eastern
Mediterranean represent $500 million and $400 million, respectively. In West
Africa, plans are to bring the Alen liquid development project to production
and to appraise the Carla and Diega liquids discoveries. In the Eastern
Mediterranean, final commissioning at Tamar will be completed by April, while
other plans include a Mesozoic oil test, appraisal work and flow tests at
Leviathan and additional testing of natural gas prospects.
Capital has also been allocated to New Ventures opportunities in Nevada, the
Falkland Islands and Nicaragua. Excluded from the total capital amount is the
$328 million final installment payment associated with the Marcellus
Overall liquid volumes are expected to represent 46 percent of total volume in
2013 with the remaining product split estimated to be 28 percent U.S. natural
gas and 26 percent international natural gas. No adjustments have been made
for the potential divestiture of non-core onshore U.S. assets.
U.S. volumes are anticipated to be up about 23 percent from 2012. The
Company's onshore development programs in the DJ Basin and Marcellus Shale
account for the majority of this growth. The international portfolio is
expected to grow 20 percent from last year, largely due to the initiation of
production at Tamar and Alen.
UPDATED FOURTH QUARTER 2012 GUIDANCE
Noble Energy now expects fourth quarter 2012 sales volumes from continuing
operations to be above the upper limit of its prior estimate of 248 to 252
MBoe/d. Sales volumes for the quarter are estimated to average between 252
and 256 MBoe/d, an increase of approximately 4 MBoe/d from the prior estimate.
The increase is primarily a result of stronger production growth in the DJ
Exploration expense for the fourth quarter is now expected to average between
$110 and $130 million, down from the prior estimate of between $160 and $200
million. The reduction is a result of successful drilling at the Carla
appraisal well in Equatorial Guinea and the Big Bend discovery in the
deepwater Gulf of Mexico. Drilling costs for the Scotia well offshore
Falkland Islands have been placed into suspense pending further evaluation.
Additional detailed operational and financial information representing the
2013 Guidance is included on the following pages.
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.
This news release contains certain "forward-looking statements" within the
meaning of the federal securities law. Words such as "expects," "predicts,"
"estimates," "anticipates," "believes," "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.
2013 Operational and Financial Guidance
Volumes and Prices
Total volumes from continuing operations are estimated to average between 270
to 282 MBoe/d, which includes equity method investment volumes. The breakdown
of our estimated annual average daily volumes by product and area is:
Crude Oil and Condensate (MBbl/d)
United States 63 - 71
Equatorial Guinea 31 - 38
Equatorial Guinea – equity method investment 1 - 2
China 3 - 5
The price of our crude oil in the U.S. is expected to be at a discount to WTI
of $1.00 to $3.00 per barrel. Crude oil in Equatorial Guinea and the North
Sea is based off dated Brent. Prices of Equatorial Guinea barrels are expected
to be at a discount from $2.00 to $4.00 per barrel. In China, the crude oil
price is expected to be at parity with Brent. All price estimates exclude the
impact of hedge results.
Natural Gas (MMcf/d)
United States 435 - 480
Equatorial Guinea 225 - 245
Israel 185 - 220
The natural gas price for the U.S. is expected to range from zero to $0.20 per
thousand cubic feet (Mcf) below NYMEX Henry Hub. Price realizations for West
Africa are estimated to be $0.27 per Mcf. Israel natural gas prices are
anticipated to range from $5.00 to $5.30 per Mcf which reflects the blended
price of multiple Tamar and Mari-B contracts. All price estimates exclude the
impact of hedge results.
Natural Gas Liquids (MBbl/d)
United States 14 - 16
Equatorial Guinea – equity method investment 5 - 7
The natural gas liquid (NGL) price realizations for the U.S. should average 30
to 40 percent of WTI.
Equity method investments include income generated from the methanol
operations, and the condensate and NGLs recovered at the LPG plant in
Equatorial Guinea, both which vary with production levels and liquid prices.
Equity method income for 2013 is estimated at $150 to $180 million.
Costs and Expenses
Lease operating $ 5.20 - $ 5.80 per Boe
Transportation and gathering $ 1.05 - $ 1.25 per Boe
Depreciation, depletion and amortization $15.90 - $16.50 per Boe
Production and ad valorem taxes 3.3 - 3.7% of oil, gas and NGL
Exploration $450 - $550 million
General and administrative $410 - $460 million
Interest (net) $115 - $135 million
Included in costs and expenses is approximately $70 million of stock-based
compensation. Capitalized interest is estimated to be $140 to $160 million.
Effective tax rate 24 - 28%
Deferred tax ratio 45 - 55%
Outstanding shares – diluted 179 - 181 million
Tax guidance is applicable to earnings before unrealized mark-to-market gain /
loss on commodity derivatives and other items typically not factored in by
Commodity Hedges - 2013
The Company has hedged 48 percent of its global oil production and 48 percent
of its U.S. natural gas volumes.
Noble Energy has entered into the following crude oil and natural gas
derivative instruments for 2013.
Crude Oil Hedges
Average Average Average Average
Volume Price Put Price Floor Price Ceiling Price
Type of Contract Index (Bbl/d) ($/Bbl) ($/Bbl) ($/Bbl) ($/Bbl)
Fixed Price WTI 6,000 $88.50
Fixed Price Brent 3,000 $98.03
Two-Way Collars WTI 5,000 $95.00 $115.00
Three-Way WTI 7,000 $63.57 $83.57 $109.04
Three-Way Brent 26,000 $82.88 $100.86 $127.32
Natural Gas Hedges
Average Average Average Average
Volume Price Put Price Floor Price Ceiling Price
Type of Contract Index (MMBtu/d) ($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu)
Fixed Price NYMEX 60,000 $4.58
Two-Way Collars NYMEX 40,000 $3.25 $5.14
Three-Way NYMEX 100,000 $3.88 $4.75 $5.63
SOURCE Noble Energy
Contact: David Larson, +1-281-872-3125, firstname.lastname@example.org; Eric
Schneider, CFA, +1-281-872-2640, email@example.com
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