Noble Energy, Inc. Announces Third Quarter 2003 Results

Press Release

Oct 29, 2003
Noble Energy, Inc. Announces Third Quarter 2003 Results

HOUSTON, Oct. 29 /PRNewswire-FirstCall/ -- Noble Energy, Inc. (NYSE: NBL) today reported third quarter net income of $35.1 million, or 62 cents per share, compared to a net loss of $1.2 million, or two cents per share, for the same period last year. Discretionary cash flow (see Determination of Discretionary Cash Flow and Reconciliation schedule) for the third quarter 2003 increased 33 percent to $153.2 million compared to $115.2 million for the same period last year.

Discontinued operations reported net income of $3.0 million. Net income from discontinued operations included two non-cash adjustments, an after-tax charge of $11.9 million to write down the assets held for sale to their estimated fair value and an after-tax gain on the disposition of assets during the third quarter of $6.4 million.

Excluding the effect of the after-tax gain on disposition of assets and the write down of assets held for sale, Noble Energy's net income would have been $40.6 million, or 72 cents per share.

The increase in reported net income and discretionary cash flow versus the third quarter last year primarily reflected higher realized commodity prices and lower exploration expense. Increased production also contributed to strong year-on-year financial and operating improvements.

Realized natural gas prices for the third quarter 2003 were $4.10 per thousand cubic feet (Mcf), 50 percent above last year's $2.73 per Mcf. Realized crude oil prices were $27.49 per barrel (Bbl), an increase of five percent compared to $26.19 per Bbl for the third quarter 2002. Realized methanol prices were 63 cents per gallon (Gal) for the third quarter 2003, an increase of 31 percent over 48 cents per Gal for the same period last year.

Charles D. Davidson, the company's Chairman, President and CEO, said, "The continuing strong commodity price environment has significantly enhanced our financial results. From an operating point of view, our international operations continued to show strong results, while our domestic drilling and production programs remained consistent with the first half of this year. Finally, after several years of substantial investment, I am pleased to be able to say our natural gas project in Israel and expansion in Equatorial Guinea are expected to begin operations this quarter."

During 2003, Noble Energy identified five property packages for disposition, and bids have now been received on all five packages. During the third quarter, closed property sales resulted in a pre-tax gain of $9.9 million.

Also during the third quarter, certain properties in two packages were classified as held for sale, written down by $18.3 million to fair value, pre- tax, and reported in discontinued operations (see Discontinued Operations Summary schedule). Subsequent to September 30, the remaining asset package met the criteria to be classified as held for sale. For the full year, property sales are expected to generate over $110 million in pre-tax proceeds.

Reported production, net of adjustments for discontinued operations, was 90,236 barrels of oil equivalent per day (Boepd), an increase of four percent compared to 86,807 Boepd for the same period last year. The increase in volumes was attributable to the start-up of production in China and a substantial increase in production volumes in Ecuador, partially offset by lower domestic and North Sea volumes. As a result of property sales, overall production declined by approximately 950 Boepd relative to the second quarter.

Third quarter 2003 reported production volumes declined compared to 94,275 Boepd for the second quarter of 2003. Increased natural gas volumes in Ecuador were offset by temporary maintenance related shut-ins in the North Sea, downtime for construction in Equatorial Guinea and minor curtailments in the U.S. Overall production for the third quarter 2003 was 99,111 Boepd after adding back the volumes associated with discontinued operations compared to 103,466 Boepd last quarter.

Reported oil and gas operating costs from continuing operations for the three months ending September 30, 2003 were $4.52 per barrel of oil equivalent (BOE) compared to $3.92 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 and ad valorem taxes resulting from higher natural gas and crude oil prices. Relatively high commodity prices are expected to continue for the remainder of 2003, which may cause aggregate oil and gas operating costs to exceed the company's original expectations for the year. The start-up of operations in China and the expansion in Equatorial Guinea and their associated costs also contributed to higher operating costs.

Reported depreciation, depletion and amortization increased to $8.81 per BOE, compared to $7.52 per BOE in the third 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.

Selling, general and administrative expenses for the third quarter were $1.51 per BOE compared to $1.86 per BOE for the third quarter of 2002. The decrease primarily reflects lower legal expenses.

For the first nine months of 2003, net income was $99.0 million, or $1.74 per share, compared to net income of $0.8 million, or one cent per share, last year. Discretionary cash flow for the first three quarters of 2003 was $481.6 million compared to $327.5 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 third quarter of $41.8 million, compared to an operating loss of $3.2 million for the same period last year. Domestic operating income included a non-cash charge of $8.4 million. The total non-cash charge included a write down of assets held for sale to fair value, partially offset by a realized gain on sale of assets.

Domestic operations benefited from higher realized prices for crude oil and natural gas during the quarter, which increased four percent and 50 percent, respectively, compared to the third quarter of 2002. The average domestic realized crude oil price was $26.55 per Bbl compared to $25.48 per Bbl during the third quarter of 2002. The average domestic realized natural gas price was $4.70 per Mcf compared to $3.14 per Mcf last year.

Compared to the second quarter 2003, domestic production volumes, excluding discontinued operations, decreased to 59,301 Boepd from 62,253 Boepd. The production decline was primarily due to temporarily reduced volumes at Green Canyon 282 (Boris) and pipeline maintenance at Main Pass 305/306. Adding back production from discontinued operations, domestic production during the third quarter was 68,176 Boepd. During the quarter, domestic properties with production volumes by approximately 950 Boepd were sold.

Domestic production volumes declined to 59,301 Boepd in the third quarter of 2003 from 61,073 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, Boris #2 began production during the third quarter. Gross production from the Boris #1 and #2 wells is currently curtailed at 16,500 barrels of oil per day (Bopd) and 26 million cubic feet per day (MMcfpd). Noble Energy has a 25 percent working interest in Boris.

In September, production began at South Timbalier 316 #A-1 (Roaring Fork) at an initial rate of 6,000 Bopd and 13.2 MMcfpd. Noble Energy owns a 40 percent working interest in Roaring Fork. Production began at Louisiana State Lease 340 #1 (Mound Point) in October at an initial rate of 33 million cubic feet equivalent per day (MMcfepd). Noble Energy owns a 25 percent working interest in Mound Point.

Noble Energy's domestic onshore operations were active during the first three quarters of 2003, drilling 50 exploration and development wells with 29 successes. The company plans to drill a total of 85 onshore wells in 2003, of which 49 are scheduled for the Gulf Coast area and 36 are scheduled for the Mid-continent and Rocky Mountain regions.

INTERNATIONAL OPERATIONS

International operations reported operating income for the third quarter of $29.4 million compared to operating income of $11.4 million in the third quarter last year. The quarter-on-quarter increase in international operations reflects higher commodity prices, increased production and lower exploration expense. The start-up of production in China also contributed to improved quarter-on-quarter earnings.

International operations benefited from higher realized prices for crude oil during the quarter, which increased five percent compared to the third quarter of 2002. The average international realized crude oil price was $28.29 per Bbl compared to $26.83 per Bbl during the third quarter of 2002. The average international realized natural gas price, excluding Ecuador production that is eliminated as inter-company sales, was $1.03 per Mcf compared to 93 cents per Mcf last year.

Third quarter 2003 international production volumes increased 20 percent to 30,935 Boepd from 25,734 Boepd last year. The increase in production volumes was primarily due to the start-up of crude oil production in China and significantly increased natural gas production in Ecuador. Maintenance related shut downs in the North Sea and construction downtime in Equatorial Guinea combined to partially offset increased international production.

In Israel, Noble Energy has completed all construction necessary to begin natural gas production. The company expects to start production during the fourth quarter of 2003.

Equatorial Guinea

Total operating income in Equatorial Guinea, which includes results from field operations and methanol, for the third quarter of 2003 was $17.9 million compared to $12.8 million last year.

Liquid petroleum gas (LPG), natural gas and condensate sales accounted for $9.3 million, or 52 percent, of operating income from Equatorial Guinea. Although the Alba field was shut in for approximately ten days for construction tie-ins, third quarter 2003 production volumes averaged 11,758 Boepd, a one percent increase over last year. The average realized price for liquids during the third quarter 2003 was $27.10 per Bbl compared to $25.62 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 $8.6 million of operating income net to Noble Energy's interest. AMPCO results are reported as income from unconsolidated subsidiaries. Third quarter realized methanol prices averaged 63 cents per Gal compared to 48 cents per Gal last year. The company's share of AMPCO methanol sales volumes was 28.4 million Gal compared to 31.3 million Gal for the third quarter of 2002, reflecting facility downtime associated with the construction shut-ins.

The Phase 2A condensate expansion project is expected to start-up during the fourth quarter of 2003. Phase 2A is expected to add gross production of 6,000 Bopd upon start-up, which is expected to occur in the first week of December. The project will reach its full incremental production of 29,000 Bopd in the first quarter of next year. Noble Energy has a 34 percent working interest in Phase 2A.

North Sea

In the North Sea, operating income for the third quarter of 2003 was $9.7 million compared to $10.5 million last year. North Sea production for the third quarter of 2003 was 8,773 Boepd compared to 9,803 Boepd last year, reflecting the temporary maintenance related shut-in of production at the Cook field.

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 third quarter 2003 averaged 3,919 Bopd, net to Noble Energy. Noble Energy has a 57 percent working interest in this project.

Noble Energy's Machala power plant operated at breakeven during the third quarter 2003. During the quarter, 184,470 megawatts (MW) were produced at an average sales price of 8.3 cents per kilowatt hour (Kwh). For the third quarter 2003, Noble Energy produced 21.2 MMcfpd of natural gas from the Amistad field at an average price of $3.73 per Mcf. The volume of natural gas and MW produced in Ecuador is related to thermal electricity demand in that country. Early in the third quarter, Ecuador had sufficient rainfall to allow hydroelectric power producers to provide base load power, while Noble Energy provided electricity to meet peak demand. As seasonal rains subsided during the third quarter, Noble Energy experienced increasing demand for thermal electricity.

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    Nine Months Ended
                                   09/30/2003 09/30/2002 09/30/2003 09/30/2002
    REVENUES
    Oil and Gas Sales and
     Royalties                       $205,650   $156,548   $632,192  $443,758
    Gathering, Marketing and
     Processing                        16,877     18,940     54,657    47,597
    Electricity Sales                  12,855      3,931     41,361     3,931
    Income From Unconsol. Subs.         8,584      5,184     33,190     1,278
    Other Income (Loss)                (1,850)    (1,901)    (7,547)      972
                                      242,116    182,702    753,853   497,536

    COST AND EXPENSES
    Oil and Gas Operations             37,508     31,289    111,719    79,911
    Transportation                      3,451      4,010     10,570    13,227
    Oil and Gas Exploration            25,481     50,628     95,559   107,266
    Gathering, Marketing and
     Processing                        14,708     15,216     48,690    40,151
    Electricity Generation             12,818      3,117     36,439     3,117
    Depreciation, Depletion and
     Amortization                      73,155     60,076    217,690   184,590
    Selling, General and
     Administrative                    12,495     14,835     41,069    38,241
    Accretion of Asset Retirement
     Obligation                         2,401                 7,015
    Interest Expense                   15,405     14,979     46,363    47,092
    Interest Capitalized               (4,395)    (4,649)    (9,578)  (13,732)
                                      193,027    189,501    605,536   499,863

    INCOME (LOSS) BEFORE INCOME
     TAXES                             49,089     (6,799)   148,317    (2,327)

    INCOME TAX PROVISION (BENEFIT)
    Current                            18,434     (1,603)    58,029    (1,238)
    Deferred                           (1,465)    (1,493)    (1,239)    2,783
                                       16,969     (3,096)    56,790     1,545

    INCOME (LOSS) BEFORE
     DISCONTINUED OPERATIONS
     AND CUMULATIVE EFFECT OF
     CHANGE IN ACCOUNTING
     PRINCIPLE                         32,120     (3,703)    91,527    (3,872)

    DISCONTINUED OPERATIONS NET OF
     TAX                                2,996      2,513     13,355     4,703

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

    NET INCOME (LOSS)                 $35,116    $(1,190)   $99,043      $831

    INCOME (LOSS) PER SHARE BEFORE
     DISCONTINUED OPERATIONS AND
     CUMULATIVE EFFECT OF CHANGE
     IN ACCOUNTING PRINCIPLE            $0.57     $(0.06)     $1.61    $(0.07)

    INCOME PER SHARE FROM
     DISCONTINUED OPERATIONS            $0.05      $0.04      $0.23     $0.08

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

    NET INCOME (LOSS) PER SHARE -
     BASIC AND DILUTED                  $0.62     $(0.02)     $1.74     $0.01

    AVERAGE SHARES OUTSTANDING         56,494     57,287     57,014    57,159


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

                                     Three Months Ended    Nine Months Ended
                                   09/30/2003 09/30/2002 09/30/2003 09/30/2002

    Net Income (Loss)                 $35,116    $(1,190)   $99,043      $831
    Depreciation, Depletion and
     Amortization (DD&A)               73,155     60,076    217,690   184,590
    Power Project DD&A                  6,900      1,567     19,180     1,567
    Oil and Gas Exploration            25,481     50,628     95,559   107,266
    Interest Capitalized               (4,395)    (4,649)    (9,578)  (13,732)
    Undistributed Earnings From
     Unconsol. Subs.                   (8,584)    (5,184)   (33,190)   (1,278)
    Distribution From Unconsol. Subs.   9,450      4,875     37,575    10,863
    DD&A - Discontinued Operations      6,751     10,561     25,404    34,598
    Non-cash Loss on Asset Disposition  8,422                13,336
    Change in Accounting Principle,
     net of tax                                               5,839
    Allowance for Doubtful Accounts                           4,936
    Deferred Income Tax Provision
     (Benefit)                         (1,465)    (1,493)    (1,239)    2,783
    Accretion of Asset Retirement
     Obligation                         2,401                 7,015

    DISCRETIONARY CASH FLOW *        $153,232   $115,191   $481,570  $327,488

    Adjustments to Reconcile:
      Working Capital                 $25,333    $(5,771)   $13,818     $(832)
      Cash Exploration Costs          (11,426)   (10,953)   (31,104)  (29,630)
      Capitalized Interest              4,395      4,649      9,578    13,732
      Deferred Tax, Misc. Credits
       and Other                      (11,954)    20,641     (2,879)   (5,615)

    Net Cash Provided by Operating
     Activities                      $159,580   $123,757   $470,983  $305,143

     *  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)

                                                09/30/2003        12/31/2002
    ASSETS
      Current Assets                              $476,821          $310,374
      Property, Plant and Equipment              4,054,927         4,334,015
      Less:  Accumulated Depreciation           (1,880,879)       (2,194,230)
                                                 2,174,048         2,139,785
      Investment In Unconsol. Subs.                229,383           234,668
      Other                                         48,762            45,188

                                                $2,929,014        $2,730,015

    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities                         $524,650          $471,754
      Long-term Debt                               945,977           977,116
      Deferred Income Taxes,
        Other Deferred Credits and
        Noncurrent Liabilities                     373,907           271,759
      Shareholders' Equity                       1,084,480         1,009,386

                                                $2,929,014        $2,730,015


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

                         Three Months Ended 09/30/03

                                   Consolidated    Domestic       North Sea


    REVENUES
      Oil Sales                       $88,630       $39,217        $18,305
      Gas Sales [C]                   117,020       112,224          3,914
      Gathering, Marketing and
       Processing Revenue              16,877
      Electricity Sales                12,855
      Income from Unconsolidated
       Subsidiaries                     8,584
      Other                            (1,850)       (4,481)          (473)
        Total Revenues                242,116       146,960         21,746

    COSTS AND EXPENSES
      Oil and Gas Operations           37,508        25,339          2,407
      Transportation                    3,451                        1,837
      Oil and Gas Exploration          25,481        21,596            764
      Gathering, Marketing and
       Processing Expense              14,708
      Electricity Generation           12,818
      DD&A                             73,155        59,007          7,087
      SG&A                             12,495         3,852
      Interest Expense (net)           13,411
        Total Costs and Expenses      193,027       109,794         12,095

    OPERATING INCOME (LOSS)           $49,089       $37,166         $9,651

      Discontinued Operations           4,609         4,609

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS          $53,698       $41,775         $9,651

      Key Statistics
        Daily Production
          Liquids (Bbl)                35,038        16,053          6,692
          Natural Gas (Mcf)           331,188       259,487         12,483

        Average Realized Price
          Liquids                      $27.49        $26.55         $29.73
          Natural Gas                   $4.10         $4.70          $3.41


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

    REVENUES
      Oil Sales                       $13,685       $17,423
      Gas Sales  [C]                      860            22
      Gathering, Marketing and
       Processing Revenue                                           16,877
      Electricity Sales                              12,855
      Income from Unconsolidated
       Subsidiaries                     8,584
      Other                                            (394)         3,498
        Total Revenues                 23,129        29,906         20,375

    COSTS AND EXPENSES
      Oil and Gas Operations            3,798         5,235            729
      Transportation                                  1,614
      Oil and Gas Exploration               1         2,679            441
      Gathering, Marketing and
       Processing Expense                                           14,708
      Electricity Generation                         12,818
      DD&A                              1,286         5,061            714
      SG&A                                182           642          7,819
      Interest Expense (net)                                        13,411
        Total Costs and Expenses        5,267        28,049         37,822

    OPERATING INCOME (LOSS)           $17,862        $1,857       $(17,447)

      Discontinued Operations

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS          $17,862        $1,857       $(17,447)

      Key Statistics
        Daily Production
          Liquids (Bbl)                 5,488         6,805
          Natural Gas (Mcf)            37,622        21,596

        Average Realized Price
          Liquids                      $27.10        $27.83
          Natural Gas                   $0.25         $0.68


                         Three Months Ended 09/30/02

                                  Consolidated     Domestic       North Sea

    REVENUES
      Oil Sales                       $72,928       $35,078        $18,041
      Gas Sales                        83,620        79,859          3,812
      Gathering, Marketing and
       Processing Revenue              18,940
      Electricity Sales                 3,931
      Income from Unconsolidated
       Subsidiaries                     5,184
      Other                            (1,901)       (2,561)           196
        Total Revenues                182,702       112,376         22,049

    COSTS AND EXPENSES
      Oil and Gas Operations           31,289        23,816          2,522
      Transportation                    4,010                        2,429
      Oil and Gas Exploration          50,628        36,489            414
      Gathering, Marketing and
       Processing Expense              15,216
      Electricity Generation            3,117
      DD&A                             60,076        50,328          5,986
      SG&A                             14,835         8,844            184
      Interest Expense (net)           10,330
        Total Costs and Expenses      189,501       119,477         11,535

    OPERATING INCOME (LOSS)           $(6,799)      $(7,101)       $10,514

      Discontinued Operations           3,867         3,867

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS          $(2,932)      $(3,234)       $10,514

      Key Statistics
        Daily Production
          Liquids (Bbl)                30,271        14,965          7,418
          Natural Gas (Mcf)           339,215       276,650         14,310

        Average Realized Price
          Liquids                      $26.19        $25.48         $26.44
          Natural Gas                   $2.73         $3.14          $2.90


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

    REVENUES
      Oil Sales                       $11,483        $8,249            $77
      Gas Sales                           922                         (973)
      Gathering, Marketing and
       Processing Revenue                                           18,940
      Electricity Sales                               3,931
      Income from Unconsolidated
       Subsidiaries                     5,184
      Other                                            (296)           760
        Total Revenues                 17,589        11,884         18,804

    COSTS AND EXPENSES
      Oil and Gas Operations            2,466         3,197           (712)
      Transportation                                  1,581
      Oil and Gas Exploration               4        13,500            221
      Gathering, Marketing and
       Processing Expense                                           15,216
      Electricity Generation                          3,117
      DD&A                              1,781         2,076            (95)
      SG&A                                572           310          4,925
      Interest Expense (net)                                        10,330
        Total Costs and Expenses        4,823        23,781         29,885

    OPERATING INCOME (LOSS)           $12,766      $(11,897)      $(11,081)

      Discontinued Operations

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS          $12,766      $(11,897)      $(11,081)

      Key Statistics
        Daily Production
          Liquids (Bbl)                 4,871         3,017
          Natural Gas (Mcf)            40,968         7,287

        Average Realized Price
          Liquids                      $25.62        $29.72
          Natural Gas                   $0.24         $0.96


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

                          Nine Months Ended 09/30/03

                                   Consolidated    Domestic      North Sea

    REVENUES
      Oil Sales                      $266,302      $113,379        $59,394
      Gas Sales [C]                   365,890       349,403         13,558
      Gathering, Marketing and
       Processing Revenue              54,657
      Electricity Sales                41,361
      Income from Unconsolidated
       Subsidiaries                    33,190
      Other                            (7,547)      (11,136)          (294)
        Total Revenues                753,853       451,646         72,658

    COSTS AND EXPENSES
      Oil and Gas Operations          111,719        74,394          8,130
      Transportation                   10,570                        6,420
      Oil and Gas Exploration          95,559        64,500          8,216
      Gathering, Marketing and
       Processing Expense              48,690
      Electricity Generation           36,439
      DD&A                            217,690       175,036         22,228
      SG&A                             41,069        12,459
      Interest Expense (net)           43,800
        Total Costs and Expenses      605,536       326,389         44,994

    OPERATING INCOME (LOSS)          $148,317      $125,257        $27,664

      Discontinued Operations          20,546        20,546

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

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS
     AND CUMULATIVE EFFECT           $159,880      $136,820        $27,664

      Key Statistics
        Daily Production
          Liquids (Bbl)                35,436        16,002          7,238
          Natural Gas (Mcf)           340,248       263,981         13,817

        Average Realized Price
          Liquids                      $27.53        $25.96         $30.06
          Natural Gas                   $4.18         $4.85          $3.59


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

    REVENUES
      Oil Sales                       $44,844       $48,685
      Gas Sales [C]                     2,841            88
      Gathering, Marketing and
       Processing Revenue                                           54,657
      Electricity Sales                              41,361
      Income from Unconsolidated
       Subsidiaries                    33,190
      Other                                            (982)         4,865
        Total Revenues                 80,875        89,152         59,522

    COSTS AND EXPENSES
      Oil and Gas Operations           11,965        14,322          2,908
      Transportation                                  4,150
      Oil and Gas Exploration              51        21,417          1,375
      Gathering, Marketing and
       Processing Expense                                           48,690
      Electricity Generation                         36,439
      DD&A                              4,892        13,788          1,746
      SG&A                                339         2,123         26,148
      Interest Expense (net)                                        43,800
        Total Costs and Expenses       17,247        92,239        124,667

    OPERATING INCOME (LOSS)           $63,628       $(3,087)      $(65,145)

      Discontinued Operations

      Cumulative Effect of SFAS 143

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS
     AND CUMULATIVE EFFECT            $63,628       $(3,087)      $(65,145)

      Key Statistics
        Daily Production
          Liquids (Bbl)                 5,978         6,218
          Natural Gas (Mcf)            41,817        20,633

        Average Realized Price
          Liquids                      $27.48        $28.68
          Natural Gas                   $0.25         $0.42


                          Nine Months Ended 09/30/02

                                   Consolidated    Domestic      North Sea

    REVENUES
      Oil Sales                      $196,942       $90,355        $52,510
      Gas Sales                       246,816       232,439         14,253
      Gathering, Marketing and
       Processing Revenue              47,597
      Electricity Sales                 3,931
      Income from Unconsolidated
       Subsidiaries                     1,278
      Other                               972          (411)           197
        Total Revenues                497,536       322,383         66,960

    COSTS AND EXPENSES
      Oil and Gas Operations           79,911        64,643          7,695
      Transportation                   13,227                        7,167
      Oil and Gas Exploration         107,266        83,941          3,594
      Gathering, Marketing and
       Processing Expense              40,151
      Electricity Generation            3,117
      DD&A                            184,590       152,829         19,827
      SG&A                             38,241        24,577            457
      Interest Expense (net)           33,360
        Total Costs and Expenses      499,863       325,990         38,740

    OPERATING INCOME (LOSS)           $(2,327)      $(3,607)       $28,220

      Discontinued Operations           7,236         7,236

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS           $4,909        $3,629        $28,220

      Key Statistics
        Daily Production
          Liquids (Bbl)                30,486        14,492          7,940
          Natural Gas (Mcf)           339,564       287,017         17,291

        Average Realized Price
          Liquids                      $23.66        $22.84         $24.22
          Natural Gas                   $2.68         $2.97          $3.02


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

    REVENUES
      Oil Sales                       $31,540       $22,423           $114
      Gas Sales                         2,144                       (2,020)
      Gathering, Marketing and
       Processing Revenue                                           47,597
      Electricity Sales                               3,931
      Income from Unconsolidated
       Subsidiaries                     1,278
      Other                                            (199)         1,385
        Total Revenues                 34,962        26,155         47,076

    COSTS AND EXPENSES
      Oil and Gas Operations            6,973         3,540         (2,940)
      Transportation                                  6,060
      Oil and Gas Exploration               3        19,173            555
      Gathering, Marketing and
       Processing Expense                                           40,151
      Electricity Generation                          3,117
      DD&A                              3,852         7,353            729
      SG&A                              1,293           689         11,225
      Interest Expense (net)                                        33,360
        Total Costs and Expenses       12,121        39,932         83,080

    OPERATING INCOME (LOSS)           $22,841      $(13,777)      $(36,004)

      Discontinued Operations

    OPERATING INCOME AFTER
     DISCONTINUED OPERATIONS          $22,841      $(13,777)      $(36,004)

      Key Statistics
        Daily Production
          Liquids (Bbl)                 4,988         3,066
          Natural Gas (Mcf)            32,045         3,211

        Average Realized Price
          Liquids                      $23.16        $26.78
          Natural Gas                   $0.25         $0.94


                          AMPCO METHANOL OPERATIONS
                      (Unaudited) (Dollars in thousands)

                                    Three Months Ended     Nine Months Ended
                                   09/30/2003 09/30/2002 09/30/2003 09/30/2002

    REVENUES
        Methanol Sales               $18,035    $14,969    $62,069    $29,300
        Sales of Purchased
         Methanol                        964      2,283      3,825      4,731
        Other                          2,378       (342)     6,121      2,034
          Total Revenues              21,377     16,910     72,015     36,065

    COSTS AND EXPENSES
        Cost of Goods
         Manufactured                  8,842      6,067     26,026     19,643
        Cost of Purchased
         Methanol                      1,147      2,816      4,157      6,557
        DD&A                           2,310      2,467      7,090      7,350
        SG&A                             494        376      1,552      1,237
          Total Costs and
           Expenses                   12,793     11,726     38,825     34,787

    INCOME/(LOSS) FROM
     UNCONS. SUBS.                    $8,584     $5,184    $33,190     $1,278

      Methanol Sales (MGal)           28,419     31,295     92,746     76,156
      Average Realized Price
       ($/Gal)                         $0.63      $0.48      $0.67      $0.38


                           ECUADOR POWER OPERATIONS
                      (Unaudited) (Dollars in thousands)

                                    Three Months Ended     Nine Months Ended
                                   09/30/2003 09/30/2002 09/30/2003 09/30/2002

    REVENUES
        Power Sales                  $10,831     $3,931    $35,799     $3,931
        Capacity Charge                2,024                 5,562
          Total Revenues              12,855      3,931     41,361      3,931

    COSTS AND EXPENSES
      Field
        Lease Operating                  832        483      2,161        483
        DD&A                           5,843      1,104     16,318      1,104
        SG&A                             454        517      2,138        517
        Interest                          (1)                   (1)
      Plant
        Fuel                           3,573        387     10,355        387
        Non-Fuel                       1,060        163      2,606        163
        Depreciation                   1,057        463      2,862        463
          Total Costs and
           Expenses                   12,818      3,117     36,439      3,117

    OPERATING INCOME                     $37       $814     $4,922       $814

      Natural Gas Production
       (Mcfpd) [C]                    21,235      6,171     19,856      2,079
      Average Natural Gas Price        $3.73      $3.44      $3.86      $3.44

      Power Production - Total MW    184,470     52,192    519,342     52,192
      Average Power Price ($/Kwh)     $0.083     $0.075     $0.080     $0.075

     [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)

                                             As Of September 30, 2003

                                                   Three Months Ended
                                       YTD  09/30/2003  06/30/2003  03/31/2003

    REVENUES
    Oil and Gas Sales and
     Royalties                      $78,386   $24,112     $24,363    $29,911

    COST AND EXPENSES
    Write down to Market Value &

     Realized (Gain)/Loss            13,336     8,422       4,914
    Oil and Gas Operations           19,100     4,330       7,278      7,492
    Depreciation, Depletion and
     Amortization                    25,404     6,751       7,582     11,071
                                     57,840    19,503      19,774     18,563
    INCOME (LOSS) BEFORE INCOME
     TAXES                           20,546     4,609       4,589     11,348

    INCOME TAX PROVISION (BENEFIT)
    Current                           7,191     1,613       1,606      3,972
    Deferred
                                      7,191     1,613       1,606      3,972
    NET INCOME (LOSS)               $13,355    $2,996      $2,983     $7,376

    KEY STATISTICS:
      Daily Production
        Liquids (Bbl)                 3,599     3,215       3,792      3,797
        Natural Gas (Mcf)            33,116    33,958      32,393     32,988

      Average Realized Price
        Liquids ($/Bbl)              $27.67    $27.94      $25.51     $29.61
        Natural Gas ($/Mcf)           $5.66     $5.07       $5.28      $6.67


                                             As Of September 30, 2002

                                                   Three Months Ended
                                       YTD  09/30/2003  06/30/2003  03/31/2003
    REVENUES
    Oil and Gas Sales and
     Royalties                      $61,665   $21,443     $22,296    $17,926

    COST AND EXPENSES
    Write down to Market Value &
     Realized (Gain)/Loss
    Oil and Gas Operations           19,831     7,015       6,168      6,648
    Depreciation, Depletion and
     Amortization                    34,598    10,561      10,700     13,337
                                     54,429    17,576      16,868     19,985
    INCOME (LOSS) BEFORE INCOME
     TAXES                            7,236     3,867       5,428     (2,059)

    INCOME TAX PROVISION (BENEFIT)
    Current                           2,533     1,354       1,900       (721)
    Deferred
                                      2,533     1,354       1,900       (721)
    NET INCOME (LOSS)                $4,703    $2,513      $3,528    $(1,338)

    KEY STATISTICS:
      Daily Production
        Liquids (Bbl)                 3,968     4,069       3,939      3,893
        Natural Gas (Mcf)            48,985    43,867      48,064     55,150

      Average Realized Price
        Liquids ($/Bbl)              $20.97    $23.99      $20.76     $17.95
        Natural Gas ($/Mcf)           $2.91     $3.09       $3.40      $2.34

SOURCE Noble Energy, Inc.