Noble Energy Announces 2011 Capital Program and Guidance

February 10, 2011

HOUSTON, Feb. 10, 2011 /PRNewswire/ — Noble Energy, Inc. (NYSE: NBL) announced today its 2011 capital program and guidance. The Company’s total capital program is estimated at $2.7 billion, with investment split relatively evenly between the United States and international operations. Approximately 42 percent of the program is going toward major project investments, 18 percent for exploration and appraisal activities, and the remaining 40 percent for ongoing maintenance and near-term growth opportunities. Major project investments include the Company’s development activities in the horizontal Niobrara, deepwater Gulf of Mexico, West Africa, and Eastern Mediterranean.

“Our plans for 2011 place Noble Energy on the threshold of accelerating growth in production and cash flow. Driven by multiple years of record exploration success, the impacts from our inventory of major development projects are rapidly approaching. Our 2011 drilling program in the horizontal Niobrara play is expected to more than double over 2010 as we expand development in the Wattenberg area, while appraising the northern portions of the play. First production at Galapagos in the deepwater Gulf and Aseng in Equatorial Guinea is in the near future, and the sanctioning of Tamar and Alen in 2010 has added two more major projects to the development queue. Our strong balance sheet and cash flows from existing assets will allow us to execute this full array of programs, including a continuation of a very material exploration effort,” said Charles D. Davidson, Noble Energy’s Chairman and CEO.

The Company anticipates investing $875 million in the Central DJ basin. In addition to the existing vertical well program in Wattenberg, Noble Energy intends to expand horizontal Niobrara drilling activity, targeting around 70 horizontal wells in 2011. In the deepwater Gulf of Mexico, the Company’s $275 million program is focused on progressing near-term oil developments at Galapagos and Raton South. It also includes three exploration wells with expectations to resume drilling at the moratorium-suspended Santiago and Deep Blue wells, along with a first appraisal well at the Gunflint discovery.

Noble Energy’s core international programs in West Africa and the Eastern Mediterranean represent approximately $575 million and $650 million, respectively. In West Africa, the Company plans to advance liquid developments at Aseng and Alen, and to resume oil exploration with two to three tests in the region. The first test will be an appraisal well in the Carmen-Diega area in Equatorial Guinea. A large portion of the Eastern Mediterranean expenditures will be the development of the Tamar natural gas field, offshore Israel. Exploration plans in the Eastern Mediterranean include three to four wells, which will include at least one appraisal well at the Leviathan discovery.

The remainder of the capital program is set aside for other opportunities onshore in the United States, as well as in the North Sea and China. Excluded from the capital program is $70 million of non-cash capital to be accrued for the Aseng FPSO capital lease.

Sales volumes for 2011 are projected to range from 208 to 218 thousand barrels of oil equivalent per day (MBoe/d). The midpoint of the range is up about three percent compared to 2010, after excluding 2010 volumes associated with the United States onshore property sales (5 MBoe/d) and the termination of a production sharing contract in Ecuador (4 MBoe/d). Product split is estimated to be 40 percent crude oil, condensate and natural gas liquids, 30 percent international natural gas, and 30 percent domestic natural gas.

United States volumes are anticipated to be up about two percent versus adjusted 2010. The Company’s ongoing development program in the Central DJ basin is projected to more than offset the natural declines expected from other non-core onshore gas properties and deepwater Gulf of Mexico. The international portfolio is expected to grow approximately four percent from adjusted 2010, largely due to higher liquids and natural gas volumes in Equatorial Guinea. Increased natural gas volumes in Israel, driven by further power generation needs, are also anticipated to contribute to the Company’s growth.


Additional detailed operational and financial information representing the 2011 Guidance is included on the following pages.


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 888-471-3840 and 719-325-2392. 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, 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 includes projections and other “forward-looking statements” within the meaning of the federal securities laws. Such projections and statements reflect Noble Energy’s current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected, and actual results may differ materially from those projected. Risks, uncertainties and assumptions that could cause actual results to differ materially from those projected 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 action, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy’s business that are detailed in its Securities and Exchange Commission filings. Words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” and similar expressions may be used to identify forward-looking statements. Noble Energy assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

2011 Operational and Financial Guidance

    Volumes and Prices
    Total volumes are estimated to average between 208 to
     218 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                                    36    -   41
    Equatorial Guinea                                10    -   14
    Equatorial Guinea - equity
     method investment                                1    -    2
    North Sea                                         8    -   10
    China                                             4    -    5

    The price differential for crude oil in the United States
     is expected to range from $3.50 to $5.00 per barrel below
     WTI.  Crude oil differentials in Equatorial Guinea and
     North Sea are based off dated Brent and should range from
     $0.00 to $1.00 per barrel for Equatorial Guinea and a
     premium of $0.00 to $1.00 per barrel for the North Sea.
     In China, crude oil differentials should be $7.50 to
     $9.00 per barrel below WTI.  All price differentials
     exclude the impact of hedge results.

    Natural Gas (MMcf/d)
    United States                                   385    -     415
    Equatorial Guinea                               230    -     245
    Israel                                          125    -     155
    North Sea                                         5    -       8

    The natural gas price differential for the United States
     is expected to range from $0.10 to $0.35 per thousand
     cubic feet (Mcf) below NYMEX Henry Hub and includes a
     processing uplift where applicable.  Price realizations
     for West Africa are estimated to be $0.27 per Mcf.
     Israel natural gas prices are anticipated to range from
     $3.75 to $4.00 per Mcf.  All price differentials exclude
     the impact of hedge results.

    Natural Gas Liquids (MBbl/d)
    United States                                    10   -     12
    Equatorial Guinea - equity
     method investment                                5   -      7

    The natural gas liquid (NGL) price realizations for the
     United States should average around 45 to 55 percent of

    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.  The margin for 2011 is estimated at $125 to $145 million.

    Costs and Expenses
    Lease operating                 $4.95    -   $5.35  per Boe
    Transportation                  $0.90    -   $1.05  per Boe
    Depreciation, depletion and
     amortization                  $11.50    -  $12.00  per Boe

    Production and ad valorem               4.5 -4.8% of oil, gas and ngl
     taxes                                  revenues

    Exploration                      $340    -    $400  million
    General and administrative       $300    -    $320  million
    Interest (net)                    $30    -     $50  million

    Included in costs and expenses is approximately $55
     million of stock-based compensation.  Capitalized
     interest is estimated to be about $120 to $140 million.

    Other Items
    Effective tax rate                 28    -     32%
    Deferred tax ratio                 30    -     40%
    Outstanding shares
     - diluted                        177    -    179  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 analysts.

    Commodity Hedges - 2011
    The Company has hedged approximately 55 percent of its United States
     natural gas volumes with an average floor price of about $5.75 per
     million british thermal unit (Mmbtu).  Crude oil hedges totaling
     about 45 percent of the Company's oil production have an average
     floor price of approximately $80.25 per barrel.

    Noble Energy has entered into the following crude oil and natural gas
     derivative instruments for 2011.

                                              Crude Oil Hedges
                                     Swaps              Collars
                                   Average Average   Average    Average
                                              Put      Floor    Ceiling
                            Volume   Price   Price     Price     Price
    Type of Contract Index (Bbl/d) ($/Bbl) ($/Bbl)   ($/Bbl)    ($/Bbl)

    Fixed Price Swaps WTI  5,000 $   85.52
    Two-Way Collars   WTI 13,000                       $80.15    $94.63
    Three-Way Collars WTI 12,000             $58.33    $78.33   $100.71

                                            Natural Gas Hedges
                                       Swaps             Collars
                                       -----             -------
                                     Average   Average   Average     Average
                                                  Put      Floor     Ceiling
                             Volume    Price     Price     Price      Price
    Type of Contract  Index     d)   ($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu)
    ----------------  ----- -------- --------- --------- --------- ---------

    Fixed Price Swaps NYMEX   25,000     $6.41
    Two-Way Collars   NYMEX  140,000                         $5.95      $6.82
    Three-Way Collars NYMEX   50,000               $4.00     $5.00      $6.70

                                         Natural Gas Differential Hedges
                            Volume    Price
    Type of Contract  Index    d)   ($/MMBtu)
    ----------------  ----- ------- ---------

    Fixed Price Swaps  CIG  140,000    ($0.70)

SOURCE Noble Energy, Inc.

Source: newswire

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