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Released July 29, 2014 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Noble Energy Incorporated (NYSE:NBL) (Houston, Texas), a leading independent oil and gas production and exploration company, reported strong operational results for the second quarter of 2014. Onshore horizontal drilling set a quarterly volume record, with performance improving dramatically in the Marcellus Shale and Denver-Jules Basin, and progress continued in the Gulf of Mexico and offshore Israel. As part of its Global Oil & Gas Project Database, Industrial Info is tracking several active projects involving Noble in the U.S., Africa and the Middle East.
The largest is Phase I of Delek Group Limited's (Haifa, Israel) subsea natural gas pipeline, which will run from the Leviathan gas field, which is off the coast of Israel, to the Vasilikos Power Station, which is on the southeastern coast of Cyprus. The $3.5 billion, 200-kilometer pipeline will have an annual capacity of between 700 million and 950 million cubic meters of natural gas. Noble Energy Mediterranean Limited (Tel Aviv, Israel), a subsidiary of Noble, is serving as project manager. The project is slated to kick off in mid-2015.
View Plant Profile - 3121893 1044818
View Project Report - 300165191
Net income was reported to be $192 million, compared with $377 million in second-quarter 2013. However, Noble executives said in a quarterly press release that results were more representative of the company's operational performance when excluding the income tax effects of adjustments; asset impairments; gains on divestitures; and gains and losses on commodity derivatives. Using this measurement, which Noble calls "adjusted income," earnings stood at $318 million for second-quarter 2014, compared with $250 million in second-quarter 2013.
Total revenues stood at $1.38 billion, a 20.37% increase from second-quarter 2013. Sales volumes averaged 290 million barrels of oil equivalent per day, a 14% increase, with liquid sales up 18%. Sales volumes grew 25% in the U.S. alone, strongly influenced by rapid growth in the Marcellus Shale and Denver-Jules Basin. Volumes in the Marcellus Shale more than doubled to a record 249 million cubic feet of natural gas per day, with Noble and its joint venture partner, CONSOL Energy (NYSE:CNX) (Cecil Township, Pennsylvania), drilling 24 wells in the area and initiating production at another 12.
Production in the Gulf of Mexico averaged 19 million barrels of oil equivalent, almost 88% of which consisted of liquids. In June, Noble announced that it would seek a bigger role in the deepwater Gulf of Mexico by acquiring a 50% interest in 17 deepwater exploration leases from BP plc (NYSE:BP) (London, England); among these is the Bright prospect, which Noble estimates holds between 90 million and 350 million barrels of oil equivalent. Bright is expected to reach its total depth in the third quarter.
Capital expenditures in the quarter were reported to be $1.27 billion, compared with $1.14 billion in second-quarter 2013. For the first half of the year, capital expenditures stood at $2.22 billion, compared with $2.04 billion for the first half of 2013.
"In the Marcellus, strong legacy production combined with new well out-performance in our operated areas as driving an increase in our type curves for wells with standard completion designs," said Charles B. Davidson, the chairman and chief executive officer of Noble, in a conference call. "Highlighting our continued performance improvement is the West Finley 6 pad in Majorsville, which began production during the second quarter. Results there are outstanding, performing more than 50% of our type curves for the area. We're also extremely encouraged by results from new completion designs in both core areas that look very positive for both resource and production upside."
Noble executives expect volumes for the third quarter to be between 290 million and 305 million barrels of oil equivalent per day, and the fourth-quarter volumes to be between 310 million to 330 million. They curbed estimates slightly because of infrastructure and upgrade projects in the Denver-Jules Basin; production volumes in the basin were slightly lower than expected in the second quarter due to upgrades, third-party processing plant downtimes, and longer drilling lead times, much of which is expected to continue throughout the second half of the year.
Executives also pared their expectations for natural gas sales in Israel as a result of the ongoing conflict. (The company's sales volumes in Israel averaged 200 million cubic feet equivalent per day in the second quarter.) Still, Noble signed two letters of intent to sell natural gas to regional customers during the quarter: one for 700 million cubic feet per day from the Leviathan field, and another for 440 million cubic feet per day from the Tamar gas field, also off the coast of Israel.
View Plant Profile - 3081872
"Clearly, the humanitarian impacts of this conflict have been tragic," Davidson said in the conference call. "A number of our employees and contractors have been affected, including several that have been called into service. We have experienced this before in our long tenure in the region and as in the past. Our team has continued to perform superbly under adversity providing an uninterrupted supply of natural gas to Israel. I'm extremely proud of them and we all hope for a rapid resolution. Our facilities are well protected and they remain unaffected. However, we do feel it is appropriate to slightly reduce our estimates for near-term sales volumes there due to the situation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The largest is Phase I of Delek Group Limited's (Haifa, Israel) subsea natural gas pipeline, which will run from the Leviathan gas field, which is off the coast of Israel, to the Vasilikos Power Station, which is on the southeastern coast of Cyprus. The $3.5 billion, 200-kilometer pipeline will have an annual capacity of between 700 million and 950 million cubic meters of natural gas. Noble Energy Mediterranean Limited (Tel Aviv, Israel), a subsidiary of Noble, is serving as project manager. The project is slated to kick off in mid-2015.
View Plant Profile - 3121893 1044818
View Project Report - 300165191
Net income was reported to be $192 million, compared with $377 million in second-quarter 2013. However, Noble executives said in a quarterly press release that results were more representative of the company's operational performance when excluding the income tax effects of adjustments; asset impairments; gains on divestitures; and gains and losses on commodity derivatives. Using this measurement, which Noble calls "adjusted income," earnings stood at $318 million for second-quarter 2014, compared with $250 million in second-quarter 2013.
Total revenues stood at $1.38 billion, a 20.37% increase from second-quarter 2013. Sales volumes averaged 290 million barrels of oil equivalent per day, a 14% increase, with liquid sales up 18%. Sales volumes grew 25% in the U.S. alone, strongly influenced by rapid growth in the Marcellus Shale and Denver-Jules Basin. Volumes in the Marcellus Shale more than doubled to a record 249 million cubic feet of natural gas per day, with Noble and its joint venture partner, CONSOL Energy (NYSE:CNX) (Cecil Township, Pennsylvania), drilling 24 wells in the area and initiating production at another 12.
Production in the Gulf of Mexico averaged 19 million barrels of oil equivalent, almost 88% of which consisted of liquids. In June, Noble announced that it would seek a bigger role in the deepwater Gulf of Mexico by acquiring a 50% interest in 17 deepwater exploration leases from BP plc (NYSE:BP) (London, England); among these is the Bright prospect, which Noble estimates holds between 90 million and 350 million barrels of oil equivalent. Bright is expected to reach its total depth in the third quarter.
Capital expenditures in the quarter were reported to be $1.27 billion, compared with $1.14 billion in second-quarter 2013. For the first half of the year, capital expenditures stood at $2.22 billion, compared with $2.04 billion for the first half of 2013.
"In the Marcellus, strong legacy production combined with new well out-performance in our operated areas as driving an increase in our type curves for wells with standard completion designs," said Charles B. Davidson, the chairman and chief executive officer of Noble, in a conference call. "Highlighting our continued performance improvement is the West Finley 6 pad in Majorsville, which began production during the second quarter. Results there are outstanding, performing more than 50% of our type curves for the area. We're also extremely encouraged by results from new completion designs in both core areas that look very positive for both resource and production upside."
Noble executives expect volumes for the third quarter to be between 290 million and 305 million barrels of oil equivalent per day, and the fourth-quarter volumes to be between 310 million to 330 million. They curbed estimates slightly because of infrastructure and upgrade projects in the Denver-Jules Basin; production volumes in the basin were slightly lower than expected in the second quarter due to upgrades, third-party processing plant downtimes, and longer drilling lead times, much of which is expected to continue throughout the second half of the year.
Executives also pared their expectations for natural gas sales in Israel as a result of the ongoing conflict. (The company's sales volumes in Israel averaged 200 million cubic feet equivalent per day in the second quarter.) Still, Noble signed two letters of intent to sell natural gas to regional customers during the quarter: one for 700 million cubic feet per day from the Leviathan field, and another for 440 million cubic feet per day from the Tamar gas field, also off the coast of Israel.
View Plant Profile - 3081872
"Clearly, the humanitarian impacts of this conflict have been tragic," Davidson said in the conference call. "A number of our employees and contractors have been affected, including several that have been called into service. We have experienced this before in our long tenure in the region and as in the past. Our team has continued to perform superbly under adversity providing an uninterrupted supply of natural gas to Israel. I'm extremely proud of them and we all hope for a rapid resolution. Our facilities are well protected and they remain unaffected. However, we do feel it is appropriate to slightly reduce our estimates for near-term sales volumes there due to the situation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
