Noble Energy Inc.
) reported adjusted earnings from continuing operations of 50
cents per share for the fourth quarter of 2013, failing to meet
the Zacks Consensus Estimate by 24.2%. The quarterly results also
dropped by a wide 35.9% from year-ago earnings of 78 cents per
share, mainly due to a surge in operating expenses.
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However, full year 2013 earnings increased 20.4% year over year
to $2.89 per share, buoyed by record production volumes. Yet, the
figure missed our expectation by 5.6%. The year-over-year
improvement mainly stemmed from increased production activities
in the domestic plays as well as higher sales from Noble Energy's
Tamar natural gas field and Alen condensate field in offshore
Israel and Equatorial New Guinea, respectively.
Noble Energy's total revenue jumped 13.8% year over year to
$1,328.0 million in the fourth quarter. Quarterly revenue scraped
through the Zacks Consensus Estimate of $1,326.0 million.
The year-over-year rise in revenue was attributable to an 8.2%
and an 18.3% jump in crude oil and condensates as well as natural
gas sales, respectively, compared to the year-ago quarter.
In 2013, total revenue was $5,015.0 million, an increase of 18.8%
from the year-ago level of $4,223.0 million and 1.2% from our
projection of $4,955.0 million.
After adjusting for asset divestitures, Noble Energy's sales
volume from continuing operations in the quarter surged 16% year
over year to 293 thousand barrels of oil equivalent per day
(MBoe/d). Production volumes outstripped sales volume due to the
timing of liftings in Equatorial New Guinea. The sales volume mix
comprised 45% natural gas liquids, 29% international gas and 26%
In the U.S., Marcellus and Denver/Julesburg ("DJ") basins
continued with its production streak. Total domestic
volumes in the fourth quarter 2013 upped 14% year over year to
International volumes followed suit, increasing sharply by 19%
year over year to 127 MBoe/d owing to major contribution from the
Tamar natural gas play.
Total operating expenses increased 21.6% year over year to $980.0
million due to a substantial 137.2% rise in exploration expenses
during the quarter. As a result, the company's quarterly
operating income dropped 3.6% to $348.0 million from the year-ago
Realized oil prices in the quarter rose to $98.09 per barrel from
$97.98 per barrel in the fourth quarter of 2012 owing to
favorable crude oil prices in the U.S and Equatorial Guinea.
Natural gas realizations escalated 14.5% year over year to $2.93
per thousand cubic feet due to strong gas prices in the U.S.
Realized prices for natural gas liquids moved up 6.8% to $39.38
per barrel from $36.86 per barrel in the year-ago quarter.
Noble Energy's cash and cash equivalents as of Dec 31, 2013 were
$1,117.0 million versus $1,387.0 million as of Dec 31, 2012.
Long-term debts as of Dec 31, 2013 were $4,566.0 million versus
$3,736.0 million as of Dec 31, 2012.
Discretionary cash flow for the fourth quarter was $925.0 million
versus $841.0 million in the prior-year quarter.
In Dec 2013, Noble Energy unveiled its 2014 total sales volumes
and capital expenditure guidance.
For 2014, Noble Energy expects total average sales volumes in the
range of 302-322 MBoe/d. Out of this, liquid, U.S. natural gas
and international natural gas are expected to comprise 46%, 29%
and 25%, respectively. At the midpoint of the guidance, total
average sales volumes will likely be 18% higher than the 2013
level on the heels of strong contribution from the Tamar and the
DJ Basin operations. Successful horizontal programs at the
Marcellus Shale will also contribute to the surge in volumes.
For 2014, Noble Energy projects capital investment of $4.8
billion. Of the total investment planned, the company intends to
invest $3.2 billion for U.S. onshore development activities and
$1.5 billion for Global Deepwater programs. The rest will be
assigned for corporate activities. In addition, the company
provided its 2014 exploration expenses guidance in the range of
At the end of 2013, Noble Energy had approximately 1,406 million
barrels of oil equivalent (Bboe), up 18.8% from 2012. In 2013,
U.S. reserves accounted for 55% of the total, while the balance
45% came from International reserves. Of the total proved
reserves, 60.4% were of the developed category.
Other Oil & Gas Company Release
Anadarko Petroleum Corporation
) posted fourth-quarter 2013 adjusted earnings of 74 cents per
share, missing the Zacks Consensus Estimate by 20.4%. Quarterly
earnings were also 18.7% lower than the year-ago level, primarily
due to a decrease in revenues, higher total costs and expenses
and an increase in outstanding shares.
Noble Energy reported mixed financial results in the fourth
quarter of 2013 with the top line beating the Zacks Consensus
Estimate and the bottom line missing the same. The DJ and
Marcellus basins will continue to act as key sales drivers for
the company. Moreover, its exploration ventures in Eastern
Mediterranean are expected to fetch lucrative returns. Noble
Energy currently retains a Zacks Rank #3 (Hold). However, other
better-ranked stocks from the same industry include
Athlon Energy Inc.
Cabot Oil & Gas Corporation
), each with a Zacks Rank #1 (Strong Buy).