On May 17, 2013 shares of
Noble Energy Inc.
) soared to a new 52-week high of $121.36. The company's series
of property sales and solid exploration ventures thrust the stock
to a new high.
The key earnings drivers for Noble Energy were the Leviathan
and Tamar prospect in the Eastern Mediterranean and Galapagos in
the Gulf of Mexico (GoM). The 15-year long-term natural gas
supply commitment to meet rising power demand in Israel proved to
be a major turning point for Noble Energy.
Further, the company accrued a sizeable $1.15 billion from its
Kansas, Dumbarton and Lochranza, Permian and Mid-Continent asset
sales. This allowed Noble Energy the financial flexibility to
invest in its growth-centric projects.
Other noteworthy steps that acted as a catalyst were the stake
purchase in the Falkland Oil and Gas Limited's licensed areas of
around 10 million acres. Exploration companies like Noble Energy
thrive on reserve accretion and escalating exploration options.
At the end of 2012, Noble Energy discovered the Big Bend prospect
in deepwater GoM.
Going forward, the company's investments in the new venture
exploration program will generate substantial returns.
The recent quarterly dividend increase of 12% to 28 cents per
share from 25 cents came on the back of a favorable balance sheet
position. This would certainly arrest investors' confidence in
The present valuation makes the shares of Noble Energy look
attractive. The forward price/earnings (P/E) multiple of 17.9x is
lower than the industry average of 19.7x, reflecting a discount
of 9.1%. In addition, Return on Equity ("ROE") of the company is
10.8%, higher than the peer group average of 7.1%.
Presently, Noble Energy carries a Zacks Rank #3 (Hold).
However, other exploration operators with a Zacks Rank #1 are
Abraxas Petroleum Corporation
EPL Oil & Gas, Inc.
Sandridge Mississippian Trust II
). Based in Houston, Texas, Noble Energy operates internationally
and engages in the acquisition, exploration, development,
production, and marketing of crude oil, natural gas and natural
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
EPL OIL&GAS INC (EPL): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
SANDRDG MS T II (SDR): Free Stock Analysis
To read this article on Zacks.com click here.