Noble Energy Announces 2013 Capital Program And Guidance, And
Provides Fourth Quarter 2012 Updates
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 opportunities."
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
acquisition.
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
Basin.
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.
2013 GUIDANCE
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 revenues
|
|
|
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 $160 million.
Other
Items
|
|
Effective
tax rate
|
24 - 28%
|
Deferred
tax ratio
|
45 - 55%
|
Outstanding shares – diluted
|
179 - 181 million
|
Tax guidance is applicable to earnings before unrealized
mark-to-market gain / loss on commodity derivatives and other items
typically not factored in by analysts.
Commodity Hedges - 2013
The Company has hedged 48 percent of its global oil production and
48 percent of its U.S. natural gas volumes.
Noble Energy has entered into the following crude oil and
natural gas derivative instruments for 2013.
|
|
|
|
|
|
|
|
|
|
Crude Oil
Hedges
|
|
|
|
Swaps
|
Collars
|
|
|
|
Average
|
Average
|
Average
|
Average
|
|
|
Volume
|
Price
|
Put
Price
|
Floor
Price
|
Ceiling
Price
|
Type of
Contract
|
Index
|
(Bbl/d)
|
($/Bbl)
|
($/Bbl)
|
($/Bbl)
|
($/Bbl)
|
|
|
|
|
|
|
|
Fixed
Price Swaps
|
WTI
|
6,000
|
$88.50
|
|
|
|
Fixed
Price Swaps
|
Brent
|
3,000
|
$98.03
|
|
|
|
Two-Way
Collars
|
WTI
|
5,000
|
|
|
$95.00
|
$115.00
|
Three-Way
Collars
|
WTI
|
7,000
|
|
$63.57
|
$83.57
|
$109.04
|
Three-Way
Collars
|
Brent
|
26,000
|
|
$82.88
|
$100.86
|
$127.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
Gas Hedges
|
|
|
|
Swaps
|
Collars
|
|
|
|
Average
|
Average
|
Average
|
Average
|
|
|
Volume
|
Price
|
Put
Price
|
Floor
Price
|
Ceiling
Price
|
Type of
Contract
|
Index
|
(MMBtu/d)
|
($/MMBtu)
|
($/MMBtu)
|
($/MMBtu)
|
($/MMBtu)
|
|
|
|
|
|
|
|
Fixed
Price Swaps
|
NYMEX
|
60,000
|
$4.58
|
|
|
|
Two-Way
Collars
|
NYMEX
|
40,000
|
|
|
$3.25
|
$5.14
|
Three-Way
Collars
|
NYMEX
|
100,000
|
|
$3.88
|
$4.75
|
$5.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Noble Energy