Balanced View on Noble Energy - Analyst Blog


On May 13, we have issued an updated research report on Noble Energy, Inc. ( NBL ). The oil & gas operator continues to advance with its exploration and production activities in the U.S. and other international locations. The company's constant efforts at exploiting new exploration prospects will enrich its reserves' portfolio.

However, disruption of operations on account of accidents and natural disaster remain a matter of concern. Moreover, oil and gas price volatilities might continue to act as headwinds.

Noble Energy, a Zacks Rank #3 (Hold) stock, posted strong results in first-quarter 2014. Quarterly earnings as well as revenue outpaced the Zacks Consensus Estimates. On a year-over-year basis, top and bottom line also outperformed on the back of the rising production volumes in the U.S. and overseas.

Going forward, operations at the company's resource-rich Denver/Julesburg (DJ) and Marcellus Shale formations will likely expand by 25% in the latter half of 2014 as more wells are anticipated to be operational. The start-up of several pipeline and gas processing facilities will further spur Noble Energy's growth momentum in these domestic prospects.

Besides its onshore assets, Noble Energy's offshore projects are shaping up well with additional discoveries in the deepwater Gulf of Mexico. On the international front, capacity installations at Tamar and excellent progress of the Leviathan prospect in the Eastern Mediterranean will enable the company to continue its supply in the natural gas hungry market of Israel. Noble Energy's large-scale gas development operations have attracted potential customers from other Middle East countries like Jordan and Egypt.

So better days lie ahead for the company as this wide spectrum of exploration and production options will help it to attain its targeted production of 629 thousand barrels of oil equivalent per day (Mboe/d) in the next five years.

On the flip side, proposed fracking regulations by the US Department of Interiors, which are likely to be finalized by the end of 2014, could create cost challenges for Noble Energy's key domestic operations.

Key Picks from the Sector

Other better-ranked stocks in this sector include Athlon Energy Inc. ( ATHL ), Encana Corp. ( ECA ) and RSP Permian, Inc. ( RSPP ). All the above oil and gas stocks currently carry a Zacks Rank #1 (Strong Buy).

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NOBLE ENERGY (NBL): Free Stock Analysis Report

RSP PERMIAN INC (RSPP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ATHL , NBL , RSPP

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