We reiterate our Neutral recommendation on
Noble Energy, Inc.
). In the first quarter of 2012, the company's earnings surpassed
the Zacks Consensus Estimate and the year-ago quarter earnings.
This year-over-year growth was primarily driven by higher sales
volume in both U.S. and international operations.
Noble Energy's revenue and operating results greatly depend on
crude oil and natural gas prices. The volatility in their prices
directly impacts the company's financial results and the price of
its common stock.
Noble Energy has a balanced portfolio of high-quality oil and
gas properties across the U.S. and several international
territories. In the U.S., the onshore assets provide steady
performance while offshore assets in the deepwater Gulf of Mexico
offer considerable growth opportunities in the medium and longer
term. As far as international operations are concerned, the company
has a significant presence in Equatorial Guinea and Israel with
low-cost of operations and a long-term production base.
In addition, Noble Energy is modernizing its drilling
activities, which include water storage, infield transport lines
and storage ponds. Subsequently, these upgrade programs will enable
the company to curtail its production costs related to minimization
of transportation and procurement costs.
On the flip side, Noble Energy's operations are concentrated in
certain regions of the U.S. and foreign countries. These core
energy resource areas are the key areas for exploration activities.
In the event of disruption of business at any of these locations
owing to government intervention, accidents or natural disasters
would adversely affect the company's future production and cash
The company expects second quarter and full year 2012 average
sales volume to be in the range of 224-232 thousand barrels of oil
equivalent per day ("MBoe/d") and 244-256 MBoe/d, respectively. As
per the Zacks Consensus Estimates, Noble Energy's second quarter
and full year 2012 earnings are pegged at $1.29 and $6.25 per
Noble Energy, Inc. currently retains a Zacks #3 Rank (short-term
Hold rating). The company competes with
Anadarko Petroleum Corporation
Based in Houston, Texas, Noble Energy, Inc. operates
internationally and engages in the acquisition, exploration,
development, production, and marketing of crude oil, natural gas
and natural gas liquids.
ANADARKO PETROL (APC): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis Report
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