Noble Energy Inc.
) revised its outlook for the fourth quarter 2012 and provided
guidance for capital outlay for 2013. Exploration activities are
expected to be the highlight of the company's 2013 capital
program which includes seeking material options for business
The company estimates fourth quarter sales volume from
continuing operations to be above the high end of the previously
estimate range of 248-252 thousand barrels of oil equivalent per
day (MBoe/d). Currently, Noble Energy expects average sales in
the range of 252-256 MBoe/d, reflecting a 4 MBoe/d upside from
the earlier estimate. Continued ramp-up in production at the
Denver/Julesburg (DJ) basin in Colorado led the company to push
up its sales outlook.
For the fourth quarter 2012, exploration expenses witnessed a
dip in its guidance level to the range of $110-$130 million from
the prior $160-$200 million on the back of favorable drilling
results in the Carla appraisal well in Equatorial Guinea and the
Big Bend discovery in the deepwater Gulf of Mexico. The drilling
costs for offshore Falkland based Scotia prospect were not
provided by the company as the well is presently under
Fiscal Year 2013 Guidance
Excluding the final installment pay of $328 million related to
the Marcellus purchase, Noble Energy's targeted capital
investment is set at $3.9 billion for the year 2013. Overseas
exploration and appraisal activity will get 15% of the entire
capital. The company's onshore U.S. plays will receive 60% of the
total capital while 6%, 15% and 10% will go to deepwater Gulf of
Mexico, West Africa and Eastern Mediterranean prospects,
respectively. The company's Falkland, Nevada and Nicaragua
operations have also secured a place in the capital program.
The company's West African and Eastern Mediterranean prospects
represent $500 million and $400 million in investment,
respectively. At the Alen liquid play, the company estimates
first production to come sooner than scheduled. Presently, Noble
Energy anticipates the West African project to come online in the
third quarter 2013. In addition, the company plans to appraise
its liquids-rich Carla and Diega assets in West Africa. In
eastern Mediterranean, the Tamar natural gas prospect is expected
to come online by April 2013. Additionally, the company plans to
go ahead with a Mesozoic oil test and appraisal work as well as
conduct flow tests at Leviathan along with evaluation of other
natural gas prospects.
In domestic operations, DJ Basin holds the maximum share in
the company's capital outlay. The basin will see investments
worth $1.7 billion to expedite the pace of Noble's horizontal
Niobrara drilling program in 2013. Noble Energy intends to add 60
extended-reach lateral wells in the Wattenberg play. A planned
expenditure of $750 million in the Marcellus shale will help in
drilling 140 joint venture wells along with a targeted 85 wells
in the liquids concentrated area. The deepwater Gulf of Mexico
will get $250 million for the execution of its exploration
programs and appraisal drilling of Gunflint through a one-rig
With these broad investment initiatives, Noble Energy expects
sales volumes for 2013 to average in the band of 270-282 MBoe/d
indicating a 20% year-over-year increase at the midpoint of the
range excluding gains from domestic property sales in 2012.
Overall crude oil and natural gas sales volume will witness 23%
and 16% growth, respectively. Liquids volume will contribute 46%
of the total volume in 2013 whereas international operations are
expected to grow 20%.
We believe the company will accrue a substantial return from
these assets in the future. The ongoing developments at the
various prospects bear evidence to Noble Energy's effective
project execution capabilities.
Noble Energy currently retains a short-term Zacks #3 Rank
(Hold rating). The Zacks Consensus Estimates for the fourth
quarter and full year 2012 are presently pegged at $1.01 per
share and $4.52 per share, respectively.
Another exploration and production operator with a Zacks #3
Anadarko Petroleum Corporation
). Recently, the company provided an operational update on its
core assets - Wattenberg in Colorado, Eagleford Shale in Texas,
Greater Natural Buttes in Utah and Marcellus Shale in
Pennsylvania - with output from each surpassing the gross
production mark of 100,000 barrels of oil equivalent per day
(BOE/d) during November 2012.
Noble Energy is an independent exploration and production
company, having high-grade hydrocarbon assets across the U.S. and
several international locations.
ANADARKO PETROL (APC): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
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