Noble Energy Inc.
) reported adjusted earnings per share of 69 cents for the second
quarter 2013, lagging the Zacks Consensus Estimate by 5.5%. The
quarterly results, however, increased by a whopping 91.7% from
year-ago earnings of 36 cents per share.
Earnings outperformed on the back of higher sales from the
U.S. onshore plays as well as a rise in natural gas sales from
the company's Tamar field.
GAAP earnings during the quarter were $1.04 compared with 79
cents in the year-ago period. The difference between GAAP and
operating figures during the quarter was due to a 44 cent gain
from unrealized commodity derivative instruments, 5 cents gain
from discontinued operations and a 3 cent loss from other
adjustments. Income tax adjustment accounted for 11 cents.
Noble Energy's total revenue increased 19.1% year over year to
$1,149.0 million in the second quarter of 2013. Quarterly revenue
nevertheless fell short of the Zacks Consensus Estimate by
The year-over-year rise in revenue stemmed from upswing in
crude oil and condensates as well as natural gas sales volume
compared to the year-ago quarter.
Noble Energy's sales volume in the quarter surged 24% year
over year to 260 thousand barrels of oil equivalent per day
(MBoe/d). Domestic sales volumes expanded and outstripped
domestic production due to the timing of liftings. The sales
volume mix comprised 44% natural gas liquids, 30% international
gas and 26% U.S. gas.
In the U.S., Marcellus and Denver/Julesburg ("DJ") once again
were the key growth drivers. Total domestic volumes in the
second quarter 2013 upped 14% year over year to 140 MBoe/d.
Production was partially tempered by third-party facility
downtime in the deepwater Gulf of Mexico and late winter storms
International volumes followed suit increasing sharply by 33%
year over year to 120 MBoe/d owing to sales initiation from the
Tamar prospect, offshore Israel.
Production costs including lease operating expenses,
production and ad valorem taxes, and transportation were up 8% to
$8.88 per barrel of oil equivalent (Boe) from the second quarter
Total operating expenses for Noble Energy shrank 4.7% year
over year to $788.0 million due to a 46.1% fall in exploration
Noble Energy's operating income in the quarter shot up 161.6%
to $361.0 million from the year-ago period. The combination of
revenue upturn and plummeting cost led Noble Energy to book
Realized oil prices for Noble Energy in the quarter declined
2.9% year over year to $96.84 per barrel owing to continued
weakness in crude oil prices in the U.S. and China.
Natural gas realizations for the company jumped 74.7% year
over year to $3.18 per thousand cubic feet due to the almost
doubling of U.S. natural gas prices.
Realized prices for natural gas liquids suffered a setback,
slipping 9.1% to $30.05 per barrel from $33.06 per barrel in the
Noble Energy's cash and cash equivalents as of Jun 30, 2013
were $706.0 million versus $1,387.0 million as of Dec 31,
Long-term debts as of Jun 30, 2013 were $3,547.0 million
versus $3,736.0 million as of Dec 31, 2012.
Discretionary cash flow for the second quarter was $765.0
million versus $640.0 million in the prior-year quarter.
Noble Energy retained its 2013 sales volume forecast in the
range of 270 MBoe/d to 282 MBoe/d. The company projects third
quarter volume to average 285 MBoe/d to 295 MBoe/d. Noble Energy
is expected to benefit from sales from the Tamar prospect,
operational start-up at Alen and acceleration in horizontal
programs in the DJ and Marcellus basins.
Other Oil & Gas Company Releases
Anadarko Petroleum Corporation
) is expected to release second quarter results on Jul 30, 2013.
The Zacks Consensus Estimate for the quarter is 91 cents.
Quicksilver Resources Inc.
) earnings are set to release on Aug 5, 2013. The Zacks Consensus
Estimate for the quarter is at a loss of 3 cents per share.
EPL Oil & Gas Inc.
) is expected to bring out second quarter results on Jul 29,
2013. The Zacks Consensus Estimate for the quarter is 96 cents
Although Noble Energy's second quarter results trailed our
estimates, the superior operational performance from the domestic
and overseas exploration plays is definitely encouraging. We
believe the production start-up at the Alen natural gas field in
Equatorial New Guinea will boost Noble Energy's returns in the
Moreover, Israel's growing appetite for natural gas will offer
a ready market for the production from the Tamar play. This will
be further supported by the successful discovery of the Karish
prospect which has brought the total discovered estimated gross
mean resource to 38 trillion cubic feet in the Levant basin.
Noble Energy currently retains a Zacks Rank #3 (Hold).
ANADARKO PETROL (APC): Free Stock Analysis
EPL OIL&GAS INC (EPL): Free Stock Analysis
QUICKSILVER RES (KWK): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
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