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Noble Energy (NBL)
Q3 2012 Earnings Call
October 25, 2012 10:00 am ET
David R. Larson - Vice President of Investor Relations
Charles D. Davidson - Chairman, Chief Executive Officer and Member of Environment, Health & Safety Committee
David L. Stover - President and Chief Operating Officer
Arun Jayaram - Crédit Suisse AG, Research Division
David W. Kistler - Simmons & Company International, Research Division
Leo P. Mariani - RBC Capital Markets, LLC, Research Division
Bob Brackett - Sanford C. Bernstein & Co., LLC., Research Division
Brian Singer - Goldman Sachs Group Inc., Research Division
John Malone - Global Hunter Securities, LLC, Research Division
Charles A. Meade - Johnson Rice & Company, L.L.C., Research Division
John P. Herrlin - Societe Generale Cross Asset Research
Eliot Javanmardi - Capital One Southcoast, Inc., Research Division
Irene O. Haas - Wunderlich Securities Inc., Research Division
Previous Statements by NBL
» Noble Energy Management Discusses Q2 2012 Results - Earnings Call Transcript
» Noble Energy's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Noble Energy's CEO Presents at Credit Suisse Energy Summit (Transcript)
David R. Larson
Thanks, Tim. Good morning, everyone. Welcome to Noble Energy's Third Quarter 2012 Earnings Call and Webcast. On the call today, we have Chuck Davidson, Chairman and CEO; Dave Stover, President, COO; and Ken Fisher, CFO.
Earlier this morning, we issued our earnings release for the third quarter, and hopefully you all have had a chance to review our results. A few supplemental slides were also posted on our website. You'll want to download the slides if you have not already done so, as we'll be referencing them in the call today.
Later today, we expect to be filing our 10-Q with the SEC and it will be available on our website at that time.
The agenda for today will begin with Chuck providing a quick overview of where Noble Energy stands now, then discussing the quarter and finishing up with some comments on our exploration activities. Dave will then give a more detailed overview of our operations and plans for the remainder of the year. We'll leave time for Q&A at the end and plan to wrap up the call in less than an hour. [Operator Instructions]
I want to remind everyone that this webcast and conference call contains projections and forward-looking statements based on our current views and most reasonable expectations. We provide no assurances on these statements, as a number of factors and uncertainties could cause actual results in future periods to differ materially from what we talk about today. You should read our full disclosure on forward-looking statements in our latest news release and SEC filings for a discussion of the risk factors that influence our business. We'll reference certain non-GAAP financial measures, such as adjusted net income or discretionary cash flow on the call today. When we refer to these items, it's because we believe they are good metrics to use in evaluating the company's performance. Be sure to see the reconciliations in our earnings release tables.
One other item before I hand the call to Chuck. Hopefully, you all are aware that we are hosting an analyst conference on December 6 in Houston. Please make sure to put that on your calendar. We'd love to -- we look forward to providing a significant update on our global asset portfolio and highlighting the significant growth that we believe sets us apart within the industry. Should you not be able to attend in person, the entire event will be webcast.
With that, let me turn the call over to Chuck.
Charles D. Davidson
Thanks, David, and good morning, everyone. I thought I'd depart from our normal format and start out by sharing my thoughts on where I believe Noble Energy is today and where we're headed. It's so easy to get entangled in the quarterly results that sometimes we lose the bigger picture. And it's that bigger picture regarding Noble Energy that I'm so excited about and I don't want us to lose track of.
Many of you have seen our annual report. It has the word "Now" across the cover. It's a word I've been using a lot lately in talking about our company. The periods of transforming, transitioning and preparing are over. For now, we're in the midst of a multiyear period of very substantial and very transparent growth, growth that is truly adding value. This growth is being supported by major accomplishment after major accomplishment. Our organization is truly shining as it demonstrates it's ability to execute really big projects extremely well.
Some that come to mind include the Aseng field in West Africa. It continues to perform extremely well after coming onstream 7 months early and under budget. Galapagos in the Deepwater Gulf, which came on earlier this year, producing at rates well above expectations. Tamar in Israel, perhaps one of the most impactful projects ever taken on by our company, which just sailed from its U.S. construction site. Even with its scale and complexity, Tamar is right on schedule for first production in less than 6 months. Tamar is followed next year by Alen in West Africa, which will be installed by some of the same equipment as is installing Tamar. And as Dave will mention, with Tamar moving so quickly, it makes it more likely that Alen can move up a bit.
Four major complicated offshore projects with projected gross costs totaling over $7.5 billion, all being executed with precision. In my mind, Noble's ability to execute major projects has developed quickly into a competitive advantage.
Jumping to the domestic onshore, the results in the DJ Basin continue to far exceed our expectations and set record after record. Our net horizontal production there was up 29% in the past quarter and more than double from a year ago. In March, we set a year-end target for horizontal production and we blew through it in August. Drilling times continue to come down, results continue to improve and the play area continues to expand. It's hard to see where the limits are right now. Also domestically, the Marcellus is delivering strong performance, with production up 38% from last quarter alone. But I also believe that Marcellus highlights another Noble competency, which is the ability to pull together, quickly integrate and deliver superior performance from major acquisitions.