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Noble Energy Announces Third Quarter 2012 Results

October 25, 2012

HOUSTON, Oct. 25, 2012 /PRNewswire/ — Noble Energy, Inc. (NYSE: NBL) reported today third quarter 2012 net income of $221 million, or $1.23 per share diluted, and net income from continuing operations(1) of $164 million, or $0.91 per share diluted. Excluding the impact of unrealized commodity derivative losses and certain other items, third quarter 2012 adjusted net income from continuing operations(2) was $167 million, or $0.93 per share diluted. Net income from continuing operations for the third quarter 2011 was $491 million, or $2.67 per share diluted and adjusted net income from continuing operations(2) was $191 million, or $1.01 per share diluted.

Discretionary cash flow from continuing operations(2) for the third quarter 2012 was a record $714 million, compared to $563 million for the same quarter in 2011. Net cash provided by operating activities was $924 million, and capital expenditures were $724 million.

Key highlights for the third quarter 2012 include:

  • Record quarterly sales volume of 242 MBoe/d, up 11 percent year over year
  • Horizontal net production within the DJ Basin increased to 31 MBoe/d, up 29 percent from last quarter and more than double from the third quarter of 2011
  • Marcellus production grew to 102 MMcfe/d, an increase of 38 percent over last quarter
  • Initiated production from the wet gas area of the Marcellus Shale that indicates a portion of our acreage is within the “super rich” area of the play
  • Entered into new positions offshore Falkland Islands and Sierra Leone
  • Secured a service contract for a new-build drillship capable of both reaching deep oil targets in the Eastern Mediterranean and supporting our global drilling program
  • Received over $1.1 billion in proceeds from divestments of non-core assets
  • Exercised option to increase credit facility from $3 billion to $4 billion, enhancing the Company’s strong liquidity position

Charles D. Davidson, Noble Energy’s Chairman and CEO, commented, “Strong liquids growth in both the DJ Basin and Gulf of Mexico contributed to our standout performance this quarter. Discretionary cash flow grew to a record level, up 27 percent over the comparable period last year, driven by a 42 percent increase in crude oil sales. Despite the impact of Hurricane Isaac in the Gulf of Mexico and unscheduled third party downtime in the DJ Basin, volumes grew by eight percent over last quarter and 11 percent year over year. Our major international projects at Tamar and Alen remain on schedule, and we expect to initiate sales from Tamar in less than six months.”

Third quarter 2012 sales volumes from continuing operations totaled 242 thousand barrels of oil equivalent per day (MBoe/d), up 11 percent from the third quarter 2011. Production volumes from continuing operations for the quarter were 247 MBoe/d, with the difference attributable to the timing of crude oil liftings in Equatorial Guinea. Sales volumes of crude oil and natural gas liquids increased 42 percent and 10 percent respectively, while natural gas declined 3 percent. Overall volumes consisted of 35 percent crude oil, 10 percent natural gas liquids, 25 percent international natural gas and 30 percent domestic natural gas.

U.S. sales volumes were 141 MBoe/d, up 25 percent from the third quarter last year. The growth was primarily attributable to the acceleration of the Company’s horizontal drilling program in the DJ Basin, the addition of the Marcellus Shale and the startup of Galapagos in the Gulf of Mexico. Divestments and natural production declines in non-core onshore properties offset a portion of the gains.

International sales volumes totaled 101 MBoe/d for the quarter, down five percent from the same period last year. The impact was primarily driven by lower natural gas sales in Israel partially offset by strong operational performance of the Aseng field in Equatorial Guinea.

The average realized price for crude oil and condensate was $99.30 per barrel for the third quarter, up three percent from the prior year period. Natural gas realizations in the U.S. averaged $2.61 per thousand cubic feet (Mcf) and $4.43 per Mcf in Israel. Natural gas liquids pricing in the U.S. averaged $29.71 per barrel, which equates to 32 percent of the average price for West Texas Intermediate (WTI – NYMEX) crude oil.

Total production costs per barrel of oil equivalent (Boe), including lease operating expense (LOE), production and ad valorem taxes, and transportation and gathering expenses were $7.10 per Boe, up slightly from the third quarter of 2011. LOE was $4.63 per Boe and depreciation, depletion, and amortization (DD&A) was $16.53 per Boe. The unit rates were impacted mostly by the growing contribution from new high-value crude oil production in the Gulf of Mexico and West Africa. Exploration expense includes leasehold costs associated with our exit from Senegal and dry hole cost associated with the Trema well, offshore Cameroon. The Company’s adjusted effective tax rate for the third quarter 2012 was 33 percent, with 60 percent deferred.

OPERATIONS UPDATE

In the DJ Basin, the horizontal development program delivered strong performance in the third quarter with net production reaching 31 MBoe/d, a 29 percent increase from the second quarter of 2012. Total basin net volumes averaged 75 MBoe/d of which 59 percent was comprised of crude oil and other liquids. Production this quarter was adversely effected by 5 MBoe/d related to third-party processing plant downtime and hot weather. During the quarter, 57 horizontal wells were completed, up from the 43 wells last quarter. Three recent extended-reach lateral wells have been online over 60 days and are tracking a 750 MBoe type curve. In a new development area in Northern Colorado, 11 wells are online producing 5,500 Boe/d with 80 percent oil content. Three of the wells, part of an 80-acre pilot test, have 30-day production rates averaging 720 Boe/d. Operated rig count is expected to end the year at eight rigs with three working in the extension area and two in the core area of Wattenberg, and the remaining three in northern Colorado.

In the Marcellus Shale, activity continued to be focused in the highest return areas of the play. Volumes for the quarter were up 38 percent from the previous quarter and averaged 102 million cubic feet equivalent per day (MMcfe/d) net. Wet gas production began from the Company’s first pad, SHL-1, in late July and the SHL-3 pad in early September. Both liquid yield, which ranged from 65 to 80 barrels per million cubic feet, and natural gas rates were higher than expected from these pads. With the addition of two new-build rigs, operated rig count stands at three, two in the Majorsville area and one delineating a large JV acreage position in the Normantown area of West Virginia. In the dry gas area, our partner is operating two rigs in southwest Pennsylvania and continues completion operations in central Pennsylvania and Northern West Virginia.

In the Gulf of Mexico, production was shut-in for several weeks related to Hurricane Isaac lowering third quarter volumes by nearly 7 MBoe/d to an average of 21 MBoe/d. The Company’s Gulf of Mexico production has returned to pre-hurricane levels. Big Bend, an exploration well located on Mississippi Canyon 698, commenced drilling in September and is expected to reach total depth before year end.

In West Africa, the Aseng field produced an average of 64 thousand barrels per day (MBbl/d) or 22 MBbl/d net for the quarter, with minimal downtime. The Alba field performed as expected and had one lifting in the third quarter versus two in the second quarter. Overall underlifting for the third quarter was 5 MBbl/d in West Africa.

In the Eastern Mediterranean, Noa and Pinnacles performed better than expected and, combined with Mari-B, average production for the quarter was 116 million cubic feet per day (MMcf/d) net. The Tamar platform left Corpus Christi en route to Israel for installation in the fourth quarter and is on schedule to begin sales in less than six months.

UPDATED GUIDANCE

Noble Energy expects fourth quarter 2012 volumes to average 248 to 252 MBoe/d. In the U.S., crude oil volumes will be up from the third quarter 2012 with continued activity in the DJ Basin. Domestic natural gas and natural gas liquids will be reduced by the onshore divestments that closed in the third quarter. Internationally, crude oil volumes in Equatorial Guinea will be higher as compared to the underlifted third quarter while natural gas sales in Israel and Equatorial Guinea are expected to be down slightly.

The Company provided the following fourth quarter cost guidance:

    Lease Operating Expense ($/Boe)  5.15 - 5.45
    DD&A ($/Boe)                    17.10 - 17.60
    Exploration Expense ($MM)         160 - 200
             (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

SUPPLEMENTAL OPERATIONS INFORMATION

For additional information on Noble Energy’s operations, please refer to the third quarter earnings slides that are accessible on the ‘Investors’ page at www.nobleenergyinc.com.

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 888-438-5493 and 719-457-2081, passcode 6437891. 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.

This news release contains certain non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating the company’s overall financial performance. These non-GAAP measures help facilitate comparison of company operating performance across periods and with peer companies.

This news release contains certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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, 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.

                                                                                                                            Schedule 1
                                                                                                                        Noble Energy, Inc.
                                                                                           Reconciliation of Net Income to Adjusted Earnings from Continuing Operations
                                                                                                        (in millions, except per share amounts, unaudited)

                                                                  Three Months Ended                                     Nine Months Ended
                                                                    September 30,                                          September 30,
                                                                    -------------                                          -------------
                                                                            2012     Per Diluted                                     2011                   Per Diluted        2012  Per Diluted        2011  Per Diluted
                                                                                        Share                                                                Share [6]                Share [6]                Share [6]
                                                                                        -----                                                                 --------                 --------                 --------
    Net Income                                                              $221                   $1.23                             $441                               $2.39  $776              $4.30  $749              $4.12
    Discontinued Operations, Net of Tax                                      (57)                  (0.32)                              50                                0.28   (89)             (0.49)  (22)             (0.13)
                                                                             ---                   -----                              ---                                ----   ---              -----   ---              -----
    Income from Continuing Operations                                        164                    0.91                              491                                2.67   687               3.81   727               3.99
    Unrealized (gains) losses on commodity derivative instruments            131                    0.73                             (300)                              (1.66)  (74)             (0.42) (140)             (0.78)
    Gain on divestitures [1]                                                (157)                  (0.87)                               -                                   -  (167)             (0.93)  (26)             (0.14)
    Asset impairments [2]                                                      -                       -                                -                                   -    73               0.41   137               0.77
    Drilling rig expense [3]                                                   -                       -                               (1)                              (0.01)    -                  -    18               0.10
    Other adjustments                                                          -                       -                                -                                   -     1               0.01     5               0.03
                                                                             ---                     ---                              ---                                 ---   ---               ----   ---               ----
    Total adjustments before tax                                             (26)                  (0.14)                            (301)                              (1.67) (167)             (0.93)   (6)             (0.02)
    Income Tax Effect of Adjustments [4]                                      29                    0.16                                1                                0.01    73               0.40   (95)             (0.53)
                                                                             ---                    ----                              ---                                ----   ---               ----   ---              -----
    Adjusted Earnings from Continuing Operations [5]                        $167                   $0.93                             $191                               $1.01  $593              $3.28  $626              $3.44
                                                                            ----                   -----                             ----                               -----  ----              -----  ----              -----

    Weighted average number of shares outstanding
    Diluted                                                                  180                                                      180                                       180                      179
    [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, as well as our Piceance development
     onshore U.S., because of recent declines in realized natural gas prices. Amount for 2011
     represents primarily impairments of certain of our onshore U.S. developments, primarily in East
     Texas due to field performance combined with a low natural gas price environment.

    [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.

    [5] Adjusted earnings from continuing operations should not be considered a substitute for net
     income as reported in accordance with GAAP. Adjusted earnings 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 earnings 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.

    [6] The diluted earnings per share calculation for the nine months ended September 30, 2012
     includes a decrease to net income of $1 million, net of tax, and the three and nine months ended
     September 30, 2011 includes decreases to net income of $12 million and $10 million, net of tax,
     respectively, related to deferred compensation gains from NBL shares held in a rabbi trust.
     Consistent with GAAP, when dilutive, the deferred compensation gain or loss, net of tax, is
     excluded from net income while the NBL shares held in the rabbi trust are included in the diluted
     sharecount.

                                                                        Schedule 2
                                                                    Noble Energy, Inc.
                                                              Summary Statement of Operations
                                                    (in millions, except per share amounts, unaudited)

                                    Three Months Ended                  Nine Months Ended
                                       September 30,                      September 30,
                                       -------------                      -------------
                                                     2012                               2011             2012    2011
                                                     ----                               ----             ----    ----
    Revenues
    Crude oil and condensate                         $751                               $513           $2,339  $1,464
    Natural gas                                       159                                246              429     670
    NGLs                                               44                                 70              157     194
    Income from equity method
     investees                                         51                                 50              137     146
    Other revenues                                      1                                  -                -      33
                                                      ---                                ---              ---     ---
    Total revenues                                  1,006                                879            3,062   2,507
                                                    -----                                ---            -----   -----
    Operating Expenses
    Lease operating expense                           103                                 89              309     251
    Production and ad valorem taxes                    31                                 38              112     108
    Transportation and gathering
     expense                                           24                                 15               71      47
    Exploration expense                                95                                 56              322     193
    Depreciation, depletion and
     amortization                                     368                                215              987     619
    General and administrative                         93                                 89              286     253
    Gain on divestitures                             (157)                                 -             (167)    (26)
    Asset impairments                                   -                                  -               73     137
    Other operating (income)
     expense, net                                      (1)                                 2               19      45
                                                      ---                                ---              ---     ---
    Total operating expenses                          556                                504            2,012   1,627
                                                      ---                                ---            -----   -----
    Operating Income                                  450                                375            1,050     880
    Other (Income) Expense
    (Gain) Loss on commodity
     derivative instruments                           135                               (322)             (46)   (179)
    Interest, net of amount
     capitalized                                       36                                 14               95      51
    Other (income) expense, net                         4                                (16)               2     (16)
                                                      ---                                ---              ---     ---
    Total other (income) expense                      175                               (324)              51    (144)
                                                      ---                               ----              ---    ----
    Income from Continuing
     Operations Before Taxes                          275                                699              999   1,024
    Income Tax Provision                              111                                208              312     297
                                                      ---                                ---              ---     ---
    Income from Continuing
     Operations                                       164                                491              687     727
    Discontinued Operations, Net of
     Tax [1]                                           57                                (50)              89      22
                                                      ---                                ---              ---     ---
    Net Income                                       $221                               $441             $776    $749
                                                     ----                               ----             ----    ----
    Earnings Per Share
    Basic
    Income from continuing
     operations                                     $0.92                              $2.78            $3.87   $4.11
    Discontinued operations, net of
     tax                                             0.32                              (0.28)            0.50    0.14
                                                     ----                              -----             ----    ----
    Net Income                                      $1.24                              $2.50            $4.37   $4.25
                                                    -----                              -----            -----   -----
    Diluted
    Income from continuing
     operations                                     $0.91                              $2.67            $3.81   $3.99
    Discontinued operations, net of
     tax                                             0.32                              (0.28)            0.49    0.13
                                                     ----                              -----             ----    ----
    Net Income                                      $1.23                              $2.39            $4.30   $4.12
                                                    -----                              -----            -----   -----
    Weighted average number of
     shares outstanding
    Basic                                             178                                177              178     176
    Diluted                                           180                                180              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              Nine Months Ended
                                        September 30,                  September 30,
                                        -------------                  -------------
                                                       2012                           2011    2012   2011
                                                       ----                           ----    ----   ----
    Crude Oil and Condensate Sales
     Volumes (MBbl/d)
    United States                                        52                             38      47     37
    Equatorial Guinea                                    27                             15      32     13
    China                                                 3                              4       4      4
                                                        ---                            ---     ---    ---
    Total consolidated operations                        82                             57      83     54
    Equity method investee                                2                              2       2      2
                                                        ---                            ---     ---    ---
    Total sales volumes                                  84                             59      85     56
                                                        ---                            ---     ---    ---
    Crude Oil and Condensate
     Realized Prices ($/Bbl)
    United States                                    $93.67                         $91.21  $96.20 $95.10
    Equatorial Guinea                                108.90                         108.11  110.68 108.40
    China                                            107.61                         108.57  117.44 104.99
                                                     ------                         ------  ------ ------
    Consolidated average realized
     prices                                          $99.30                         $96.82 $102.90 $98.98
                                                     ------                         ------ ------- ------
    Natural Gas Sales Volumes (MMcf/
     d)
    United States                                       440                            358     435    373
    Equatorial Guinea                                   251                            250     232    244
    Israel                                              116                            228      95    180
                                                        ---                            ---     ---    ---
    Total consolidated operations                       807                            836     762    797
                                                        ---                            ---     ---    ---
    Natural Gas Realized Prices
     ($/Mcf)
    United States                                     $2.61                          $3.98   $2.44  $4.09
    Equatorial Guinea                                  0.27                           0.27    0.27   0.27
    Israel                                             4.43                           5.15    4.67   4.80
                                                       ----                           ----    ----   ----
    Consolidated average realized
     prices                                           $2.14                          $3.18   $2.06  $3.11
                                                      -----                          -----   -----  -----
    Natural Gas Liquids (NGL) Sales
     Volumes (MBbl/d)
    United States                                        16                             16      16     14
    Equity method investee                                7                              5       6      5
                                                        ---                            ---     ---    ---
    Total sales volumes                                  23                             21      22     19
                                                        ---                            ---     ---    ---
    Natural Gas Liquids Realized
     Prices ($/Bbl)
    United States                                    $29.71                         $49.57  $34.87 $49.19
    Barrels of Oil Equivalent
     Volumes (MBoe/d)
    United States                                       141                            113     135    114
    Equatorial Guinea                                    70                             57      71     54
    Israel                                               19                             38      16     30
    China                                                 3                              4       4      4
                                                        ---                            ---     ---    ---
    Total consolidated operations                       233                            212     226    202
    Equity method investee                                9                              7       8      7
                                                        ---                            ---     ---    ---
    Total barrels of oil equivalent
     from continuing operations                         242                            219     234    209
    Total barrels of oil equivalent
     from discontinued operations                         5                              5       7      9
                                                        ---                            ---     ---    ---
    Total barrels of oil equivalent                     247                            224     241    218
                                                        ---                            ---     ---    ---

                                   Schedule 4
                               Noble Energy, Inc.
                            Condensed Balance Sheets
                            (in millions, unaudited)

                                  September 30,              December 31,
                                  -------------              ------------
                                                        2012                 2011
                                                        ----                 ----
    Assets
    Current Assets
    Cash and cash
     equivalents                                      $1,617               $1,455
    Accounts receivable,
     net                                                 686                  783
    Other current assets                                 422                  180
                                                         ---                  ---
    Total current assets                               2,725                2,418
    Net property, plant and
     equipment                                        12,875               12,782
    Goodwill                                             635                  696
    Other noncurrent assets                              625                  548
                                                         ---                  ---
    Total Assets                                     $16,860              $16,444
                                                     -------              -------
    Liabilities and
     Shareholders' Equity
    Current Liabilities
    Accounts payable-trade                            $1,243               $1,343
    Other current
     liabilities                                       1,014                  925
                                                       -----                  ---
    Total current
     liabilities                                       2,257                2,268
    Long-term debt                                     3,747                4,100
    Deferred income taxes                              2,157                2,059
    Other noncurrent
     liabilities                                         691                  752
                                                         ---                  ---
    Total Liabilities                                  8,852                9,179
    Total Shareholders'
     Equity                                            8,008                7,265
                                                       -----                -----
    Total Liabilities and
     Shareholders' Equity                            $16,860              $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                   Nine Months Ended
                                                   September 30,                       September 30,
                                                   -------------                       -------------
                                                                 2012                                  2011                                  2012    2011
                                                                 ----                                  ----                                  ----    ----
    Adjusted Earnings from Continuing
     Operations [1]                                              $167                                  $191                                  $593    $626
    Adjustments to reconcile adjusted
     earnings from continuing operations
     to discretionary cash flow from
     continuing operations:
    Depreciation, depletion and
     amortization                                                 368                                   215                                   987     619
    Exploration expense                                            95                                    56                                   322     192
    (Income)/Dividends from equity method
     investments, net                                              11                                    28                                     4      23
    Deferred compensation (income)
     expense                                                        7                                   (18)                                   (1)    (15)
    Deferred income taxes                                          49                                    78                                   117     173
    Stock-based compensation expense                               16                                    15                                    49      43
    Other                                                           1                                    (2)                                   (1)      -
                                                                  ---                                   ---                                   ---     ---
    Discretionary Cash Flow from
     Continuing Operations [2]                                   $714                                  $563                                $2,070  $1,661
                                                                 ----                                  ----                                ------  ------
    Reconciliation to Operating Cash
     Flows
    Net changes in working capital                                205                                    40                                   141     103
    Cash exploration costs                                        (29)                                  (44)                                 (141)   (138)
    Current tax expense of earnings
     adjustments                                                   (4)                                  (41)                                  (18)     (5)
    Drilling rig expense [3]                                        -                                     1                                     -     (18)
    Impact of Discontinued Operations                              31                                    25                                    94     162
                                                                  ---                                   ---                                   ---     ---
    Other adjustments                                               7                                    12                                    25      20
                                                                  ---                                   ---                                   ---     ---
    Net Cash Provided by Operating
     Activities                                                  $924                                  $556                                $2,171  $1,785
                                                                 ----                                  ----                                ------  ------

    Capital expenditures (accrual based)                         $724                                  $738                                $2,546  $1,985
    Marcellus Shale Asset Acquisition [4]                  $        -                                $1,233                         $           -  $1,233
                                                           ----------                                ------                         -------------  ------
    Increase in FPSO lease obligation                               -                                     5                                     -      56
    Total Capital Expenditures (Accrual
     Based)                                                      $724                                $1,976                                $2,546  $3,274
                                                                 ----                                ------                                ------  ------
    [1] See Schedule 1: Reconciliation
     of Net Income to Adjusted
     Earnings from Continuing
     Operations.

    [2] 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.

    [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] Includes $73 million
     representing our initial
     investment in CONE Gathering LLC.

                                                                Schedule 6
                                                            Noble Energy, Inc.
                                                Effect of Commodity Derivative Instruments
                                                         (in millions, unaudited)

                             Three Months Ended                 Nine Months Ended
                                September 30,                     September 30,
                                -------------                     -------------
                                             2012                                2011      2012   2011
                                             ----                                ----      ----   ----
    (Gain) Loss on Commodity
     Derivative Instruments
    Crude Oil
    Realized                                  $17                                  $4       $68    $36
    Unrealized                                112                                (292)      (97)  (168)
                                              ---                                ----       ---   ----
    Total Crude Oil                           129                                (288)      (29)  (132)
                                              ---                                ----       ---   ----
    Natural Gas
    Realized                                  (13)                                (26)      (40)   (75)
    Unrealized                                 19                                  (8)       23     28
                                              ---                                 ---       ---    ---
    Total Natural Gas                           6                                 (34)      (17)   (47)
                                              ---                                 ---       ---    ---
    Total (Gain) Loss on
     Commodity Derivative
     Instruments                             $135                               $(322)     $(46) $(179)
                                             ----                               -----      ----  -----

                                                                        Schedule 7
                                                                    Noble Energy, Inc.
                                                                 Discontinued Operations
                                                     (in millions, except volume amounts, unaudited)

                                     Three Months Ended                   Nine Months Ended
                                       September 30,                        September 30,
                                       -------------                        -------------
                                                      2012                                 2011         2012          2011
                                                      ----                                 ----         ----          ----
    Summary Statement of Operations:
    Oil and gas revenues                               $54                                  $45         $194          $271
    Production expense                                  14                                   11           39            43
    Exploration expense                                  -                                    1            3             2
    Depreciation, depletion and
     amortization                                        1                                   10           33            62
    General and administrative                           1                                    -            2             1
    Asset impairments                                    -                                    -            -             2
                                                       ---                                  ---          ---           ---
    Income Before Income Taxes                          38                                   23          117           161
    Current tax expense                                  3                                   69           64           144
    Deferred tax expense                                 -                                    4          (14)           (5)
                                                       ---                                  ---          ---           ---
    Operating Income, Net of Tax                       $35                                 $(50)         $67           $22
                                                       ---                                 ----          ---           ---
    Gain on Sale, Net of Tax                           $22                         $          -          $22  $          -
                                                       ---                         ------------          ---  ------------
    Income From Discontinued
     Operations                                        $57                                 $(50)         $89           $22
                                                       ---                                 ----          ---           ---
    Volume and Price Statistics:
    Crude Oil and Condensate Sales
     Volumes (MBbl/d)                                    5                                    4            6             8
    Crude Oil and Condensate
     Realized Prices ($/Bbl)                       $106.03                              $115.67      $113.11       $112.99
    Natural Gas Sales Volumes (MMcf/
     d)                                                  3                                    4            4             6
    Natural Gas Realized Prices
     ($/Mcf)                                         $8.37                                $8.41        $8.31         $7.90

SOURCE Noble Energy


Source: PR Newswire