Noble Energy, Inc. Announces Second Quarter 2003 Results

Press Release

Jul 23, 2003
Noble Energy, Inc. Announces Second Quarter 2003 Results

Noble Energy, Inc. Announces Second Quarter 2003 ResultsNet Income and Discretionary Cash Flow Increase 70 Percent and 26 Percent, Respectively

HOUSTON, July 23 /PRNewswire-FirstCall/ -- Noble Energy, Inc. (NYSE: NBL) today reported second quarter net income increased 70 percent to $29.1 million, or 51 cents per share, compared to net income of $17.1 million, or 30 cents per share, for the same period last year. Discretionary cash flow (see Determination of Discretionary Cash Flow and Reconciliation schedule) for the second quarter 2003 increased 26 percent to $152.3 million compared to $121.0 million last year.

Discontinued operations reported a net loss of $2.0 million, which included a non-cash, after-tax charge of $3.2 million to write down the assets held for sale to their estimated fair value. Excluding the effect of the non- cash write down of assets held for sale, net income would have been $32.3 million, or 56 cents per share.

Noble Energy has five property packages identified for disposition. During the second quarter, certain properties in two of these packages were classified as held for sale, written down to fair value and reported in discontinued operations (see Discontinued Operations Summary schedule). Following disposition of these two packages, a net gain on sale will be recognized in the third quarter. The book value of certain properties in the remaining packages may be adjusted in future quarters.

The increase in reported net income and discretionary cash flow versus the second quarter last year primarily reflected higher realized commodity prices. The company's improved financial performance also resulted from the recent start-up of two significant international projects, production from the Cheng Dao Xi (CDX) field in south Bohai Bay in China and production from the company's offshore Amistad natural gas field and associated electrical power production in Ecuador. As a result, Noble Energy experienced strong year-on- year financial and operating improvements.

Realized natural gas prices for the second quarter 2003 were $4.11 per thousand cubic feet (Mcf), 34 percent above last year's $3.07 per Mcf. Realized crude oil prices were $25.84 per barrel (Bbl), an increase of six percent compared to $24.40 per Bbl for the second quarter 2002. Realized methanol prices were 72 cents per gallon (Gal) for the second quarter 2003, an increase of 85 percent over 39 cents per Gal for the same period last year.

Charles D. Davidson, the company's Chairman, President and CEO, said, "The company continues to generate improved operating and financial results. Our domestic drilling and production programs maintained the momentum begun in the first quarter, as reflected in our strong quarter-to-quarter production growth. Likewise, international operations continued to show strong results, while our natural gas project in Israel and expansion in Equatorial Guinea rapidly approach start-up later this year. In addition, the company's solid first half earnings and cash flow have led to a continual strengthening of our balance sheet."

Reported production, net of adjustments for discontinued operations, increased over two percent compared to the first quarter 2003, to 101,055 barrels of oil equivalent per day (Boepd) from 98,859 Boepd. Reported domestic operations had a quarter-to-quarter production increase of six percent compared to the first quarter 2003, with increased production of both natural gas and oil. International volumes decreased four percent compared to the first quarter 2003, primarily reflecting a seasonal reduction in electricity dispatch and consequent reduction in natural gas volumes in Ecuador, as well as lower North Sea natural gas volumes. Partially offsetting lower volumes in Ecuador and the North Sea was an increase in crude oil volumes in the Bohai Bay in China. Overall production volumes for the second quarter, adding back the production associated with discontinued operations, were 103,466 Boepd.

Second quarter 2003 reported production volumes increased seven percent to 101,055 Boepd from 94,051 Boepd for the same period last year. The increase in volumes was attributable to the start-up of production in China and Ecuador, as well as a substantial increase in production volumes in Equatorial Guinea, partially offset by lower domestic volumes.

Reported oil and gas operating costs for the three months ending June 30, 2003 were $4.50 per barrel of oil equivalent (BOE) compared to $3.18 per BOE for the same period last year. The quarter-on-quarter increase in per BOE oil and gas operating costs was primarily due to increased production taxes resulting from higher natural gas and crude oil prices and increased ad valorem taxes. The start-up of new international properties and their associated costs also contributed to higher operating costs.

Reported depreciation, depletion and amortization increased to $8.59 per BOE, compared to $8.19 per BOE in the second quarter of 2002. The increase was primarily due to higher finding costs in the Gulf of Mexico shallow shelf in prior years and the initial capital carry associated with the company's joint venture with Aspect Energy. Adoption of SFAS No. 143 as of January 1, 2003, which relates to accounting for abandonment costs, also contributed to higher depreciation, depletion and amortization.

For the first six months of 2003, net income was $63.9 million, or $1.12 per share, compared to net income of $2.0 million, or four cents per share, last year. Discretionary cash flow for the first half of 2003 was $328.3 million compared to $212.3 million for the same period last year. The year-on-year increase in net income and discretionary cash flow resulted from higher commodity prices and increased production volumes.

DOMESTIC OPERATIONS

Domestic operations reported operating income after discontinued operations for the second quarter of $44.7 million, including a $4.9 million non-cash, pre-tax charge for the write down of assets held for sale to their estimated fair value, compared to operating income of $38.0 million for the second quarter last year.

Domestic operations benefited from higher realized prices for crude oil and natural gas during the quarter, which increased ten percent and 58 percent, respectively, compared to the second quarter of 2002. The average domestic realized crude oil price was $26.20 per Bbl compared to $23.85 per Bbl during the second quarter of 2002. The average domestic realized natural gas price was $5.26 per Mcf compared to $3.32 per Mcf last year.

Compared to the first quarter 2003, domestic production volumes increased six percent to 69,033 Boepd from 65,351 Boepd. Onshore operations contributed to the volume increase with successful drilling results in early 2003 and timely pipeline hook-ups of these wells. With the start up of two large deepwater projects during the first quarter, Green Canyon 136 #8 (Shasta) and the Green Canyon 282 (Boris #1), Noble Energy's offshore operations also contributed to the quarter-to-quarter increase in volumes.

Domestic production volumes declined to 69,033 Boepd in the second quarter of 2003 from 71,412 Boepd last year. The decline in production volumes was primarily due to natural decline rates in the Gulf of Mexico and onshore Gulf Coast region.

In the deepwater Gulf of Mexico, Noble Energy announced a discovery on Green Canyon Block 199 (Lorien) in July. The Lorien well, in which Noble Energy has a 20 percent working interest, encountered over 120 feet of apparent oil in a high-quality reservoir interval. The company and its partners have temporarily suspended the well pending further appraisal of the hydrocarbon zone that has been encountered.

In May, Noble Energy announced a deep shelf discovery at Louisiana State Lease 340 #1 (Mound Point). The well was drilled and evaluated to a measured depth of 19,024 feet. Noble Energy and its partners are completing the Mound Point well, and production is expected to commence early in the fourth quarter of 2003. Noble Energy owns a 25 percent working interest in the well. In the traditional Gulf of Mexico shallow shelf, Vermillion 196 #A-2 (25 percent to Noble Energy) was completed as a discovery well in March 2003. Net to Noble Energy, the well is currently producing at a rate of 5 million cubic feet equivalent per day.

Noble Energy's domestic onshore operations remained active during the first half of 2003, drilling 38 exploration and development wells with 21 successes. The company plans to drill a total of 72 onshore wells in 2003, of which 37 are scheduled for the Gulf Coast area and 35 are scheduled for the Mid-continent and Rocky Mountain areas.

INTERNATIONAL OPERATIONS

International operations reported operating income for the second quarter of $22.5 million compared to operating income of $14.9 million in the second quarter last year. The quarter-on-quarter increase in international operations reflects an increase in liquids and natural gas production volumes, as well as methanol sales, in Equatorial Guinea. The start-up of production in China also contributed to improved quarter-on-quarter earnings, but was offset by a $10.4 million pre-tax exploration charge for the Hannah #1 well offshore Israel and the Joppa and Fleet wells in the North Sea.

International operations benefited from higher realized prices for crude oil during the quarter, which increased four percent compared to the second quarter of 2002. The average international realized crude oil price was $26.08 per Bbl compared to $24.97 per Bbl during the second quarter of 2002. The average international realized natural gas price, excluding Ecuador, decreased 35 percent to $1.00 per Mcf, compared to $1.53 per Mcf last year. The decrease in realized natural gas prices primarily resulted from a 153 percent quarter-on-quarter increase in natural gas sales in Equatorial Guinea at a sales price of 25 cents per MMBTU.

Second quarter 2003 international production volumes increased 41 percent to 32,022 Boepd from 22,639 Boepd last year. The increase in production volumes was primarily due to the start-up of crude oil production in China and natural gas production in Ecuador. Additional natural gas and condensate production in Equatorial Guinea also contributed to increased volumes.

Equatorial Guinea

Total operating income in Equatorial Guinea, which includes results from field operations and methanol, for the second quarter of 2003 was $21.7 million compared to $3.6 million last year.

Liquid petroleum gas (LPG), natural gas and condensate sales accounted for $9.8 million, or 45 percent, of operating income from Equatorial Guinea. Second quarter 2003 production volumes averaged 13,607 Boepd, a 71 percent increase over last year, primarily because the methanol plant was shut down for repairs for 65 days during the second quarter of 2002. The average realized price for liquids during the second quarter was $25.28 per Bbl compared to $22.90 per Bbl for the same period last year. Natural gas was sold to the Atlantic Methanol Production Company (AMPCO) at a price of 25 cents per MMBTU.

AMPCO, an unconsolidated subsidiary in which the company owns a 45 percent interest, produced $11.9 million of operating income net to Noble Energy's interest. AMPCO results are reported as income from unconsolidated subsidiaries. Second quarter realized methanol prices averaged 72 cents per Gal compared to 39 cents per Gal last year. The company's share of AMPCO methanol sales volumes more than doubled to 29.8 million Gal compared to 13.9 million Gal for the second quarter of 2002, primarily reflecting a full quarter of production versus last year's 65 day shutdown for repairs.

North Sea

In the North Sea, operating income for the second quarter of 2003 was $2.6 million compared to $10.8 million last year. The quarter-on-quarter decline in operating income primarily reflects increased exploration expense resulting from the Joppa and Fleet exploration wells, which were determined to be non-commercial.

North Sea production for the second quarter of 2003 was 9,677 Boepd compared to 11,286 Boepd last year, reflecting natural field decline.

Noble Energy participated in a successful well in U.K. block 15/20a (Jura). Studies are underway to determine the optimum development scenarios. An appraisal well may be drilled in the future. Noble Energy has a 30 percent working interest in this well.

Other International

Other international includes operating results from Argentina, China, Ecuador, Israel and Vietnam.

In south Bohai Bay offshore China, production commenced from the CDX field on January 13, 2003. Production for the second quarter 2003 averaged 3,600 barrels of oil per day, net to Noble Energy. The company expects production volumes to increase gradually as wells and facility operations are optimized. Noble Energy has a 57 percent working interest in this project.

Noble Energy's Machala power plant reported an operating loss of $0.9 million during the second quarter 2003. During the quarter, 111,666 megawatts (MW) were produced at an average sales price of 8.3 cents per kilowatt hour (Kwh), compared to 223,206 MW produced at an average sales price of 8.7 cents during the first quarter. For the second quarter 2003, Noble Energy produced 12.7 million cubic feet per day (MMcfpd) of natural gas from the Amistad field at an average price of $3.88 per Mcf. Second quarter 2003 natural gas volumes declined 51 percent compared to 25.7 MMcfpd for the first quarter. The quarter-to-quarter decline in MW produced and natural gas volumes was due to the onset of the rainy season in Ecuador, which resulted in increased reliance on hydroelectric power production, and scheduled maintenance on the Machala power facility.

Noble Energy is one of the nation's leading independent energy companies and operates throughout major basins in the United States including the Gulf of Mexico, as well as internationally, in Argentina, China, Ecuador, Equatorial Guinea, the Mediterranean Sea, the North Sea and Vietnam. Noble Energy markets natural gas and crude oil through its subsidiary, Noble Energy Marketing, Inc.

This news release may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Noble Energy's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, the volatility in commodity prices for oil and gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other action, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's business that are detailed in its Securities and Exchange Commission filings.

                     NOBLE ENERGY, INC. AND SUBSIDIARIES
                       CONSOLIDATED SUMMARY OF RESULTS
                 (Unaudited) (In thousands, except per share)

                                    Three Months Ended     Six Months Ended
                                   6/30/2003  6/30/2002  6/30/2003  6/30/2002
    REVENUES
    Oil and Gas Sales and
     Royalties                      $226,384   $175,966    468,177    317,645
    Gathering, Marketing and
     Processing                       19,880     13,876     37,780     28,657
    Electricity Sales                  9,181                28,506
    Income (Loss) From
     Unconsol. Subs.                  11,874     (3,480)    24,606     (3,905)
    Other Income (Loss)               (5,866)      (135)    (5,697)     2,872
                                     261,453    186,227    553,372    345,269

    COST AND EXPENSES
    Oil and Gas Operations            41,416     27,254     84,869     57,709
    Transportation                     3,580      4,444      7,119      9,217
    Oil and Gas Exploration           34,676     20,233     70,078     56,638
    Gathering, Marketing and
     Processing                       15,538     11,850     33,982     24,935
    Electricity Generation            10,035                23,621
    Depreciation, Depletion and
     Amortization                     78,988     70,090    157,779    141,988
    Selling, General and
     Administrative                   14,945     12,083     28,574     23,406
    Interest Expense                  17,782     16,694     35,572     32,113
    Interest Capitalized              (3,253)    (4,732)    (5,183)    (9,083)
                                     213,707    157,916    436,411    336,923

    INCOME (LOSS) BEFORE
     INCOME TAXES                     47,746     28,311    116,961      8,346

    INCOME TAX PROVISION (BENEFIT)
    Current                           21,560      5,762     45,802      1,720
    Deferred                          (4,899)     5,836        226      4,276
                                      16,661     11,598     46,028      5,996

    INCOME (LOSS) BEFORE DISCONTINUED
     OPERATIONS AND CUMULATIVE
     EFFECT OF CHANGE IN ACCOUNTING
     PRINCIPLE                        31,085     16,713     70,933      2,350

    DISCONTINUED OPERATIONS (NET OF
     TAX)                             (2,015)       406     (1,167)      (329)

    CUMULATIVE EFFECT OF CHANGE IN
     ACCOUNTING PRINCIPLE, NET
     OF TAX                                                 (5,839)

    NET INCOME (LOSS)                $29,070    $17,119    $63,927     $2,021

    INCOME (LOSS) PER SHARE BEFORE
     DISCONTINUED OPERATIONS AND
     CUMULATIVE EFFECT OF CHANGE
     IN ACCOUNTING PRINCIPLE           $0.54      $0.29      $1.24      $0.04

    INCOME (LOSS) PER SHARE FROM
     DISCONTINUED OPERATIONS          $(0.04)     $0.01     $(0.02)    $(0.01)

    INCOME (LOSS) PER SHARE FROM
     CUMULATIVE EFFECT OF CHANGE
     IN ACCOUNTING PRINCIPLE            $---       $---     $(0.10)      $---

    NET INCOME (LOSS) PER SHARE        $0.51      $0.30      $1.12      $0.04

    AVERAGE SHARES OUTSTANDING        57,181     57,171     57,278     57,094


                     NOBLE ENERGY, INC. AND SUBSIDIARIES
         DETERMINATION OF DISCRETIONARY CASH FLOW AND RECONCILIATION
                          (Unaudited) (In thousands)

                                    Three Months Ended     Six Months Ended
                                   6/30/2003  6/30/2002  6/30/2003  6/30/2002

    Net Income (Loss)                $29,070    $17,119    $63,927     $2,021
    Depreciation, Depletion and
     Amortization (DD&A)              78,988     70,090    157,779    141,988
    Power Project DD&A                 4,716                12,281
    Oil and Gas Exploration           34,676     20,233     70,078     56,638
    Interest Capitalized              (3,253)    (4,732)    (5,183)    (9,083)
    Undistributed (Earnings) Loss
     From Unconsol. Subs.            (11,874)     3,480    (24,606)     3,905
    Distribution From
     Unconsol. Subs.                  15,750      5,988     28,125      5,988
    Discontinued Operations            6,838      2,959     10,323      6,563
    Change in Accounting Principle                           5,839
    Allowance for Doubtful Accounts                          4,936
    Deferred Income Tax Provision
     (Benefit)                        (4,899)     5,836        226      4,276
    Accretion of Interest Expense -
     SFAS 143                          2,281                 4,614

    DISCRETIONARY CASH FLOW *       $152,293   $120,973   $328,339   $212,296

    Adjustments to Reconcile:
       Working Capital               $(4,774)   $26,973   $(11,515)    $4,939
       Cash Exploration Costs        (10,392)    (9,092)   (19,678)   (18,677)
       Capitalized Interest            3,253      4,732      5,183      9,083
       Deferred Tax, Misc. Credits
        and Other                      9,455    (30,314)     5,879    (20,198)

    Net Cash Provided by
     Operating Activities           $149,835   $113,272   $308,208   $187,443

    *  The table above reconciles discretionary cash flow to net cash provided
       by operating activities.  While discretionary cash flow is not a GAAP
       measure of financial performance, management believes it is a good tool
       for internal use and the investment community in evaluating the
       company's overall financial performance.  Among management,
       professional research analysts, portfolio managers and investors
       following the oil and gas industry, discretionary cash flow is broadly
       used as an indicator of a company's ability to fund exploration and
       production activities and meet financial obligations.  Discretionary
       cash flow is also commonly used as a basis to value and compare
       companies in the oil and gas industry.


                     CONSOLIDATED CONDENSED BALANCE SHEET
                          (Unaudited) (In thousands)

                                                  06-30-03          12-31-02
    ASSETS
      Current Assets                              $352,573          $310,374
      Property, Plant and Equipment              4,512,817         4,334,015
      Less:  Accumulated Depreciation           (2,261,838)       (2,194,230)
                                                 2,250,979         2,139,785
      Investment In Unconsol. Subs.                230,922           234,668
      Other                                         40,947            45,188

                                                $2,875,421        $2,730,015

    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities                         $514,587          $471,754
      Long-term Debt                               940,933           977,116
      Deferred Income Taxes,
        Other Deferred Credits and
         Noncurrent Liabilities                    385,594           271,759
      Shareholders' Equity                       1,034,307         1,009,386

                                                $2,875,421        $2,730,015


                                NOBLE ENERGY, INC.
                            INCOME BEFORE INCOME TAXES
                        (Unaudited) (Dollars in thousands)

                           Three Months Ended 06/30/03

                                  Consolidated      Domestic       North Sea

    REVENUES
      Oil Sales                       $93,611        $45,927         $17,490
      Gas Sales [C]                   132,773        127,428           4,295
      Gathering, Marketing and              -
       Processing Revenue              19,880
      Electricity Sales                 9,181
      Income from Unconsolidated            -
       Subsidiaries                    11,874
      Other                            (5,866)        (4,898)            202
        Total Revenues                261,453        168,457          21,987

    COSTS AND EXPENSES
      Oil and Gas Operations           41,416         29,644           2,788
      Transportation                    3,580                          2,315
      Oil and Gas Exploration          34,676         21,683           6,847
      Gathering, Marketing and              -
       Processing Expense              15,538
      Electricity Generation           10,035
      DD&A                             78,988         64,880           7,414
      SG&A                             14,945          4,419
      Interest Expense (net)           14,529
        Total Costs and Expenses      213,707        120,626          19,364

    OPERATING INCOME (LOSS)           $47,746        $47,831          $2,623

      Discontinued Operations          (3,100)        (3,100)

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS          $44,646        $44,731          $2,623

      Key Statistics
        Daily Production
          Liquids (Bbl)                39,804         19,711           7,438
          Natural Gas (Mcf)           367,506        295,930          13,431

        Average Realized Price
          Liquids                      $25.84         $26.20          $25.84
          Natural Gas                   $4.11          $5.26           $3.51


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                   Three Months Ended 06/30/03 (Continued)

                                 Equatorial      Other            Corporate
                                    Guinea  International [A]   and Other [B]

    REVENUES
      Oil Sales                     $14,259       $15,935
      Gas Sales [C]                   1,011            39
      Gathering, Marketing and
       Processing Revenue                                            19,880
      Electricity Sales                             9,181
      Income from Unconsolidated
       Subsidiaries                  11,874
      Other                                          (426)             (744)
        Total Revenues               27,144        24,729            19,136

    COSTS AND EXPENSES
      Oil and Gas Operations          3,882         4,258               844
      Transportation                                1,265
      Oil and Gas Exploration             4         5,698               444
      Gathering, Marketing and
       Processing Expense                                            15,538
      Electricity Generation                       10,035
      DD&A                            1,431         4,689               574
      SG&A                               97           641             9,788
      Interest Expense (net)                                         14,529
        Total Costs and Expenses      5,414        26,586            41,717

    OPERATING INCOME (LOSS)         $21,730       $(1,857)         $(22,581)

      Discontinued Operations

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS        $21,730       $(1,857)         $(22,581)

      Key Statistics
        Daily Production
          Liquids (Bbl)               6,198         6,457
          Natural Gas (Mcf)          44,455        13,690

        Average Realized Price
          Liquids                    $25.28        $27.12
          Natural Gas                 $0.25         $0.41


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                         Three Months Ended 06/30/02

                                   Consolidated      Domestic      North Sea

    REVENUES
      Oil Sales                       $74,139         $36,946       $18,591
      Gas Sales                       101,827          96,996         4,721
      Gathering, Marketing and              -
       Processing Revenue              13,876
      Electricity Sales                   ---
      Income from Unconsolidated            -
       Subsidiaries                    (3,480)
      Other                              (135)         (1,403)          322
        Total Revenues                186,227         132,539        23,634

    COSTS AND EXPENSES
      Oil and Gas Operations           27,254          22,367         2,819
      Transportation                    4,444                         2,288
      Oil and Gas Exploration          20,233           9,375           876
      Gathering, Marketing and              -
       Processing Expense              11,850
      Electricity Generation              ---
      DD&A                             70,090          58,996         6,650
      SG&A                             12,083           4,468           228
      Interest Expense (net)           11,962
        Total Costs and Expenses      157,916          95,206        12,861

    OPERATING INCOME (LOSS)           $28,311         $37,333       $10,773

      Discontinued Operations             625             625

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS          $28,936         $37,958       $10,773

    Key Statistics
      Daily Production
        Liquids (Bbl)                  33,393          17,030         8,179
        Natural Gas (Mcf)             363,949         326,291        18,643

      Average Realized Price
        Liquids                        $24.40          $23.85        $24.98
        Natural Gas                     $3.07           $3.32         $2.78


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                   Three Months Ended 06/30/02 (Continued)

                               Equatorial        Other            Corporate
                                 Guinea     International [A]   and Other [B]

    REVENUES
      Oil Sales                  $10,504           $8,084               $14
      Gas Sales                      397              110              (397)
      Gathering, Marketing and
       Processing Revenue                                            13,876
      Electricity Sales
      Income from Unconsolidated
       Subsidiaries               (3,480)
      Other                                            72               874
        Total Revenues             7,421            8,266            14,367

    COSTS AND EXPENSES
      Oil and Gas Operations       2,411             (762)              419
      Transportation                                2,156
      Oil and Gas Exploration        (38)           2,431             7,589
      Gathering, Marketing and
       Processing Expense                                            11,850
      Electricity Generation
      DD&A                           927            2,929               588
      SG&A                           517              957             5,913
      Interest Expense (net)                                         11,962
        Total Costs and Expenses   3,817            7,711            38,321

    OPERATING INCOME (LOSS)       $3,604             $555          $(23,954)

      Discontinued Operations

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS      $3,604             $555          $(23,954)

    Key Statistics
      Daily Production
        Liquids (Bbl)              5,040            3,144
        Natural Gas (Mcf)         17,592            1,423

      Average Realized Price
        Liquids                   $22.90           $28.25
        Natural Gas                $0.25            $0.85


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                          Six Months Ended 06/30/03

                                  Consolidated      Domestic        North Sea

    REVENUES
      Oil Sales                      $190,511        $87,001          $41,089
      Gas Sales [C]                   277,666        265,975            9,644
      Gathering, Marketing and              -
       Processing Revenue              37,780
      Electricity Sales                28,506
      Income from Unconsolidated            -
       Subsidiaries                    24,606
      Other                            (5,697)        (5,927)             179
        Total Revenues                553,372        347,049           50,912

    COSTS AND EXPENSES
      Oil and Gas Operations           84,869         59,713            5,723
      Transportation                    7,119                           4,583
      Oil and Gas Exploration          70,078         42,904            7,452
      Gathering, Marketing and              -
       Processing Expense              33,982
      Electricity Generation           23,621
      DD&A                            157,779        129,273           15,141
      SG&A                             28,574          8,607
      Interest Expense (net)           30,389
        Total Costs and Expenses      436,411        240,497           32,899

    OPERATING INCOME (LOSS)          $116,961       $106,552          $18,013

      Discontinued Operations          (1,796)        (1,796)

      Cumulative Effect of SFAS 143    (8,983)        (8,983)

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS
     AND CUMULATIVE EFFECT           $106,182        $95,773          $18,013

      Key Statistics
        Daily Production
          Liquids (Bbl)                38,179         18,516            7,515
          Natural Gas (Mcf)           370,707        292,120           14,495

        Average Realized Price
          Liquids                      $27.57         $28.36           $30.21
          Natural Gas                   $4.36          $4.93            $3.68


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                    Six Months Ended 06/30/03 (Continued)

                                  Equatorial       Other           Corporate
                                    Guinea    International [A]  and Other [B]

    REVENUES
      Oil Sales                     $31,159        $31,262
      Gas Sales [C]                   1,981             66
      Gathering, Marketing and
       Processing Revenue                                             37,780
      Electricity Sales                             28,506
      Income from Unconsolidated
       Subsidiaries                  24,606
      Other                                           (588)              639
        Total Revenues               57,746         59,246            38,419

    COSTS AND EXPENSES
      Oil and Gas Operations          8,167          9,087             2,179
      Transportation                                 2,536
      Oil and Gas Exploration            50         18,738               934
      Gathering, Marketing and
       Processing Expense                                             33,982
      Electricity Generation                        23,621
      DD&A                            3,606          8,727             1,032
      SG&A                              157          1,481            18,329
      Interest Expense (net)                                          30,389
        Total Costs and Expenses     11,980         64,190            86,845

    OPERATING INCOME (LOSS)         $45,766        $(4,944)         $(48,426)

      Discontinued Operations

      Cumulative Effect of SFAS 143

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS
     AND CUMULATIVE EFFECT          $45,766        $(4,944)         $(48,426)

      Key Statistics
        Daily Production
          Liquids (Bbl)               6,227          5,921
          Natural Gas (Mcf)          43,949         20,143

        Average Realized Price
          Liquids                    $27.64         $29.17
          Natural Gas                 $0.25          $0.37


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                            Six Months Ended 06/30/02

                                  Consolidated     Domestic       North Sea

    REVENUES
      Oil Sales                      $133,537       $64,800        $34,468
      Gas Sales                       184,108       173,491         10,441
      Gathering, Marketing and              -
       Processing Revenue              28,657
      Electricity Sales                   ---
      Income from Unconsolidated            -
       Subsidiaries                    (3,905)
      Other                             2,872         1,544            449
        Total Revenues                345,269       239,835         45,358

    COSTS AND EXPENSES
      Oil and Gas Operations           57,709        47,237          5,174
      Transportation                    9,217                        4,737
      Oil and Gas Exploration          56,638        39,137          3,054
      Gathering, Marketing and              -
       Processing Expense              24,935
      Electricity Generation              ---
      DD&A                            141,988       119,527         13,841
      SG&A                             23,406         9,233            193
      Interest Expense (net)           23,030
        Total Costs and Expenses      336,923       215,134         26,999

    OPERATING INCOME (LOSS)            $8,346       $24,701        $18,359

      Discontinued Operations            (506)         (506)

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS           $7,840       $24,195        $18,359

      Key Statistics
        Daily Production
          Liquids (Bbl)                33,279        16,935          8,206
          Natural Gas (Mcf)           379,923       332,467         18,808

        Average Realized Price
          Liquids                      $22.16        $21.15         $23.20
          Natural Gas                   $2.68         $2.86          $3.07


                              NOBLE ENERGY, INC.
                          INCOME BEFORE INCOME TAXES
                      (Unaudited) (Dollars in thousands)

                    Six Months Ended 06/30/02 (Continued)

                                 Equatorial       Other           Corporate
                                   Guinea   International [A]   and Other [B]

    REVENUES
      Oil Sales                    $20,056        $14,174              $39
      Gas Sales                      1,222            176           (1,222)
      Gathering, Marketing and
       Processing Revenue                                           28,657
      Electricity Sales
      Income from Unconsolidated
       Subsidiaries                 (3,905)
      Other                              1             97              781
        Total Revenues              17,374         14,447           28,255

    COSTS AND EXPENSES
      Oil and Gas Operations         4,506            389              403
      Transportation                                4,480
      Oil and Gas Exploration           (2)         5,861            8,588
      Gathering, Marketing and
       Processing Expense                                           24,935
      Electricity Generation
      DD&A                           2,071          5,381            1,168
      SG&A                             721          1,149           12,110
      Interest Expense (net)                                        23,030
        Total Costs and Expenses     7,296         17,260           70,234

    OPERATING INCOME (LOSS)        $10,078        $(2,813)        $(41,979)

      Discontinued Operations

    PRETAX INCOME (LOSS) AFTER
     DISCONTINUED OPERATIONS       $10,078        $(2,813)        $(41,979)

      Key Statistics
        Daily Production
          Liquids (Bbl)              5,047          3,091
          Natural Gas (Mcf)         27,509          1,139

        Average Realized Price
          Liquids                   $21.95         $25.33
          Natural Gas                $0.25          $0.85


                          AMPCO METHANOL OPERATIONS
                      (Unaudited) (Dollars in thousands)

                                  Three Months Ended       Six Months Ended
                                 6/30/2003   6/30/2002   6/30/2003  6/30/2002
    REVENUES
        Methanol Sales             $21,439      $5,496     $44,034    $14,331
        Sales of Purchased
         Methanol                      803       2,448       2,861      2,448
        Other                        2,108       1,275       3,743      2,376
          Total Revenues            24,350       9,219      50,638     19,155

    COSTS AND EXPENSES
        Cost of Goods Manufactured   8,607       6,043      17,184     13,576
        Cost of Purchased Methanol     994       3,741       3,010      3,741
        DD&A                         2,372       2,471       4,780      4,883
        SG&A                           503         444       1,058        860
          Total Costs and Expenses  12,476      12,699      26,032     23,060

    INCOME (LOSS) FROM
     UNCONS. SUBS.                 $11,874     $(3,480)    $24,606    $(3,905)

      Methanol Sales (MGal)         29,841      13,920      64,327     44,861
      Average Realized
       Price ($/Gal)                 $0.72       $0.39       $0.68      $0.32


                           ECUADOR POWER OPERATIONS
                      (Unaudited) (Dollars in thousands)

                                 Three Months Ended       Six Months Ended
                               6/30/2003   6/30/2002   6/30/2003   6/30/2002
    REVENUES
        Power Sales               $7,473                 $24,968
        Capacity Charge            1,708                   3,538
        Other                                      1                      17
          Total Revenues           9,181           1      28,506          17

    COSTS AND EXPENSES
      Field
        Lease Operating              690                   1,329
        DD&A                       3,750          31      10,475          62
        SG&A                       1,141                   1,684
        Interest                                (945)                 (1,827)
      Plant
        Fuel                       2,723                   6,782
        Non-Fuel                     767                   1,546
        Depreciation                 964          15       1,805          27
        Interest                              (4,819)                 (5,863)
          Total Costs and
           Expenses               10,035      (5,718)     23,621      (7,601)

    OPERATING (LOSS) INCOME        $(854)     $5,719      $4,885      $7,618

      Natural Gas Production
       (Mcfpd) [C]                12,651                  19,156
      Average Natural Gas Price    $3.88                   $3.94

      Power Production -
       Total MW                  111,666                 334,872
      Average Power Price
       ($/Kwh)                    $0.083                  $0.085

    [A]  Other international includes operations in Argentina, China, Ecuador,
         Israel and Vietnam.
    [B]  Corporate and Other includes corporate overhead, intercompany
         eliminations and marketing.
    [C]  Ecuador natural gas volumes are included in Other International and
         Consolidated production, but are not included in natural gas sales
         revenue for either.  Because the gas-to-power project in Ecuador is
         100 percent owned by Noble Energy, intercompany natural gas sales are
         eliminated for accounting purposes.


                     NOBLE ENERGY, INC. AND SUBSIDIARIES
                       DISCONTINUED OPERATIONS SUMMARY
                 (Unaudited) (In thousands, except per share)

                                    Three Months Ended     Six Months Ended
                                   6/30/2003  6/30/2002  6/30/2003  6/30/2002
    REVENUES
    Oil and Gas Sales and Royalties   $5,937     $5,393    $12,640     $9,786

    COST AND EXPENSES
    Write down to Market Value         4,914                 4,914
    Oil and Gas Operations             2,199      1,809      4,113      3,729
    Depreciation, Depletion and
     Amortization                      1,924      2,959      5,409      6,563
                                       9,037      4,768     14,436     10,292

    INCOME (LOSS) BEFORE INCOME TAXES (3,100)       625     (1,796)      (506)

    INCOME TAX PROVISION (BENEFIT)
    Current                           (1,085)       219       (629)      (177)
    Deferred
                                      (1,085)       219       (629)      (177)

     INCOME (LOSS) FROM DISCONTINUED
      OPERATIONS                     $(2,015)      $406    $(1,167)     $(329)


    KEY STATISTICS:
      Daily Production
        Liquids (Bbl)                  1,286      1,248      1,254      1,233
        Natural Gas (Mcf)              6,746     10,682      6,834     11,405

      Average Realized Price
        Liquids ($/Bbl)               $25.49     $19.75     $26.80     $18.85
        Natural Gas ($/Mcf)            $4.81      $3.24      $5.30      $2.70


SOURCE Noble Energy, Inc.