Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2018

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NOBLE ENERGY, INC.
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
Delaware
 
001-07964
 
73-0785597
(State or other jurisdiction of
incorporation or organization)
 
Commission
File Number
 
(I.R.S. Employer
Identification No.)
 
 
1001 Noble Energy Way,
Houston, Texas
 
 
 
77070
(Address of principal executive offices)
 
 
 
(Zip Code)
Registrant’s telephone number, including area code: (281) 872-3100
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02. Results of Operations and Financial Condition.
On August 3, 2018 Noble Energy, Inc. (the “Company”) issued a press release announcing results for the fiscal quarter ended June 30, 2018. A copy of the press release issued by the Company is furnished as Exhibit 99.1 to this Current Report and will be published on the Company’s website at www.nblenergy.com.
The Company’s press release announcing its financial results for its fiscal quarter ended June 30, 2018 contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. The Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
In accordance with General Instruction B.2. of Form 8-K, the information set forth herein and in the press release is deemed to be “furnished” and shall not be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 7.01. Regulation FD Disclosure.
On August 3, 2018, we will present certain information in connection with our call with shareholders, analysts and others relating to our results of operations discussed above.  Attached hereto as Exhibit 99.2 are slides that will be presented at that time.
The information included in this Current Report under Item 7.01, including Exhibit 99.2, is deemed to be “furnished” and shall not be “filed” for purposes of Section 18 of the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits. The following exhibit is furnished as part of this Current Report on Form 8-K:
Exhibit No.
 
Description
99.1
 
99.2
 





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
NOBLE ENERGY, INC.
 
 
 
 
Date:
August 3, 2018
 
 
By: 
 
/s/ Kenneth M. Fisher
 
 
 
 
 
 
Kenneth M. Fisher
 
 
 
 
 
 
Executive Vice President, Chief Financial Officer



Exhibit
Exhibit 99.1

 
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NEWS RELEASE
 
 
 
 
 
 
 

NOBLE ENERGY ANNOUNCES SECOND QUARTER 2018 RESULTS

HOUSTON (August 3, 2018) -- Noble Energy, Inc. (NYSE: NBL) (“Noble Energy” or the "Company”) today announced second quarter 2018 financial and operating results. Highlights include:

Delivered sales volumes of 346 MBoe/d, including quarterly records for both U.S. onshore oil production and gross natural gas sales from Israel
Increased U.S. onshore oil production to 105 MBbl/d, up 22 percent(1) compared to the second quarter of 2017, with growth driven by the Delaware and DJ Basins
Sold on average more than 1 Bcf/d, gross, primarily from Tamar, offshore Israel, to domestic and export customers
Installed two additional central gathering facilities in the Delaware Basin and initial gathering infrastructure for the Mustang development area in the DJ Basin
Secured long-term Permian oil takeaway to the Gulf Coast, with access to export markets
Executed Heads of Agreement establishing the framework for development of natural gas from the Alen field, offshore Equatorial Guinea
Completed the divestment of the Gulf of Mexico business and sold 7.5 million units of CNX Midstream Partners
Progressed the share buyback program, repurchasing 1.8 million outstanding Noble Energy shares, and reduced Noble Energy debt by $379 million

David L. Stover, Noble Energy’s Chairman, President and CEO, commented, “Noble Energy is executing well against our multi-year objectives and we’ve delivered a number of key accomplishments within the first

1


half of the year. We achieved production records, enhanced our exploration portfolio and advanced our onshore and offshore development programs, including key infrastructure additions and takeaway agreements. We have also returned significant cash to shareholders through our ongoing share repurchase program and dividend increase, while reducing debt."

"Given industry constraints in the Permian, we plan to reallocate some near-term investment to our other U.S. onshore basins. Our diversified portfolio, with many high-return investment opportunities, provides a distinct competitive advantage and allows us to rapidly adjust in dynamic environments to enhance returns and cash flow growth.”

Second Quarter 2018 Results

The Company reported a second quarter net loss attributable to Noble Energy of $23 million, or $0.05 per diluted share. Excluding the impact of items not typically considered by analysts in formulating estimates, the Company generated adjusted net income(2) and adjusted net income per share(2) attributable to Noble Energy for the quarter of $81 million, or $0.17 per diluted share. The adjustment items were primarily the Company’s mark to market on unrealized commodity derivative positions and gains on divestitures. Adjusted EBITDAX(2) was $698 million.

Total company sales volumes for the second quarter of 2018 were 346 thousand barrels of oil equivalent per day (MBoe/d), in the upper half of the Company’s guidance range. Compared to the second quarter of 2017, sales volumes increased by approximately 11 percent(1) due to higher volumes from each of the Company's U.S. onshore assets. U.S. production comprised approximately 71 percent of total volumes in the second quarter 2018, with Israel representing 11 percent, and West Africa 18 percent. Liquids comprised 56 percent of total sales volumes for the second quarter 2018.

The Company’s average reported U.S. onshore oil price for the second quarter 2018 was $64.62 per barrel. Noble Energy's crude oil sales from West Africa, which are linked to Brent pricing, averaged $72.79 per


2


barrel. The Company's U.S. onshore NGLs were sold at both Conway and Mt. Belvieu, averaging $24.39 per barrel for the period. Natural gas prices in the U.S. onshore business were $2.29 per thousand cubic feet (Mcf), reflecting wider differentials in both the Delaware and DJ Basins. These prices do not include the impact of the Company’s commodity hedges. Israel natural gas prices averaged $5.46 per Mcf.

Unit operating expenses for the second quarter 2018, including lease operating expenses (LOE), production and ad valorem taxes, gathering and transportation expenses, other royalty expense and marketing costs were consistent with expectations totaling $9.48 per barrel of oil equivalent (BOE).

Income from equity method investees for the quarter totaled $49 million, with nearly 75 percent coming from the Company’s operations in West Africa (methanol and LPG facilities) and over 20 percent related to the Company’s ownership interest in CNX Midstream Partners LP (NYSE: CNXM).

The results for Noble Midstream Partners LP ("NBLX") (NYSE: NBLX) are consolidated into Noble Energy’s financial statements. Midstream Services Revenue of $15 million for the quarter was primarily composed of NBLX's gathering revenue from unaffiliated third parties. The public’s 55 percent ownership of second quarter net income attributable to NBLX, $17 million, has been excluded from Noble Energy’s results.

Second quarter 2018 capital investments attributable to Noble Energy totaled $866 million and included certain scope changes for onshore facility projects as well as inflation in the U.S. onshore environment. Approximately 65 percent was allocated to U.S. upstream operations and 9 percent was directed towards U.S. onshore midstream assets. Approximately 25 percent of the total was spent in Israel on development of the Leviathan natural gas project. Consolidated capital included an additional $78 million in expenditures funded by NBLX.

Solid U.S. Onshore Operations
Total sales volumes from the Company’s U.S. onshore assets averaged 244 MBoe/d in the second quarter 2018. U.S. onshore oil volumes totaled a record 105 thousand barrels of oil per day (MBbl/d), up 22 percent(1)


3


from the second quarter of 2017, with the increase driven by the Company’s Delaware and DJ Basin assets. Second quarter oil mix of 43 percent also represented a record for the Company’s U.S. onshore assets.

The DJ Basin averaged 121 MBoe/d for the second quarter of 2018, with nearly 80 percent of the volumes from the Company's Wells Ranch and East Pony areas. Oil production represented more than 50 percent of total volumes, in accordance with the implementation of ASC 606 (oil represented approximately 55 percent for the second quarter had ASC 606 not been in effect). Combined Wells Ranch and East Pony volumes were higher by more than 15 percent as compared to the same quarter last year. In Wells Ranch, after 150 days online, gross production from the Kona pads is over 10 MBoe/d (60 percent oil) from seven wells utilizing enhanced proppant concentrations. The Company brought 16 operated wells online within the second quarter, nine in Wells Ranch, two in East Pony, and the remainder in the Mustang area. Production from the Mustang wells commenced late in the second quarter, exhibiting strong early performance.

Sales volumes from the Company's Delaware Basin assets totaled 47 MBoe/d, with an oil mix of nearly 70 percent. Compared to the second quarter of last year, sales volumes increased by over 100 percent. Production for the quarter was impacted by unplanned third-party facility downtime, as well as the timing of artificial lift installation. The Company brought 23 operated wells online in the second quarter, 21 in the Wolfcamp A and two in the Third Bone Spring. The Wolfcamp A wells produced an average IP-30 rate of 1,380 Boe/d. The majority of the wells that commenced production in the second quarter 2018 were brought online late in the quarter following infrastructure completion. In July 2018, the Company’s Delaware Basin production averaged approximately 55 MBoe/d.

During the second quarter, the fourth and fifth central gathering facilities ("CGFs") commenced operations in the Delaware Basin, operated by NBLX. Total oil gathering capacity through the five CGFs is 90 MBbl/d.

Sales volumes from the Eagle Ford totaled 76 MBoe/d for the second quarter, an increase of 10 percent as compared to the second quarter of last year. The Company brought online a total of nine operated wells in

4


the northwestern portion of Gates Ranch, with seven in the Lower Eagle Ford and two in the Upper Eagle Ford.

During the second quarter, Noble Energy averaged nine operated drilling rigs (two DJ, six Delaware and one Eagle Ford) and six operated frac crews (three DJ and three Delaware).

Securing Oil Takeaway in the Permian

During the second quarter, Noble Energy finalized an agreement with EPIC Pipeline, LP to transport crude oil from the Company’s Delaware Basin position to Corpus Christi, Texas. The Company has secured firm capacity for 100 MBbl/d, gross, and the pipeline is anticipated to commence operations in the fourth quarter of 2019. The Company also executed a five-year firm sales agreement to the Gulf Coast, beginning in July 2018 for at least 10 MBbl/d, gross, and increasing to 20 MBbl/d, gross, in October 2018 and for the remainder of the contract.

Strong Natural Gas Demand in Israel Drives Record Gross Sales

Second quarter gross sales volumes in Israel represented a quarterly record of more than 1 billion cubic feet of natural gas equivalent per day, primarily from the Tamar field, driven by increased local demand. Net sales volumes totaled 227 million cubic feet of natural gas equivalent per day during the second quarter of 2018.

The Leviathan project is now nearly 60 percent complete, with anticipated first sales on schedule by the end of 2019. The final two wells were drilled to total depth, completion activities are underway, and pipeline installation has been completed for infield flowlines and main gathering lines.

Reliable Offshore Performance and Advancing Future Developments


5


Sales volumes from West Africa in the second quarter of 2018 were more than 61 MBoe/d (31 percent oil), slightly higher than produced volumes. In May 2018, the Company announced the execution of a Heads of Agreement with the Government of the Republic of Equatorial Guinea and necessary third-parties, establishing the framework for natural gas development at the Alen field. Production from the project will access global LNG markets.

The Gulf of Mexico contributed 3 MBoe/d in the second quarter 2018. The divestiture of the Gulf of Mexico assets was closed on April 12, 2018.

Progress on Financial Initiatives

The Company has continued to prioritize direct shareholder returns through the share repurchase program and dividend increase. During the quarter, the Company repurchased 1.8 million shares of Noble Energy stock, bringing the total year to date to 4 million shares, or 17 percent of the authorized $750 million share repurchase program. In addition, the Company announced a 10 percent increase to its quarterly dividend beginning with the May 2018 dividend payment.

Total financial liquidity at the end of the second quarter was $4.6 billion, comprised of $621 million in cash and Noble Energy's undrawn $4 billion credit facility borrowing capacity. In May 2018, the Company redeemed $379 million in outstanding senior notes, bringing total Noble Energy debt reduction for 2018 to approximately $610 million.

In June 2018, the Company realized proceeds of approximately $135 million through the sale of 7.5 million common units of CNX Midstream Partners LP. The units sold represented 35 percent of the units held by Noble Energy, and the Company recorded a pre-tax gain of $109 million on the transaction.


Updated Guidance


6


Third quarter sales volumes are estimated to range between 335 and 345 MBoe/d. As compared to the second quarter of 2018, U.S. onshore oil volumes in the third quarter are higher by nearly 10 MBbl/d driven by growth from the Delaware and DJ Basins. Israel sales volumes are anticipated to be slightly higher than the second quarter with West Africa lower, driven equally by natural gas decline and the timing of oil liftings. Full year 2018 sales volumes are estimated to be towards the lower end of the Company's full year range, 350 to 360 MBoe/d, resulting from deferred completion activity in the Delaware and Eagle Ford declines.

The Company’s full year capital expectation has been revised to be approximately $3 billion, reflecting increased onshore facility spend from the first half of 2018 and inflation in the U.S. onshore as a result of the higher commodity price environment.

Detailed guidance has been provided in the quarterly supplement on the Company’s website, www.nblenergy.com.

(1)
Pro forma for asset acquisitions and divestitures.
(2)
A Non-GAAP measure, please see the respective earnings release schedules included herein for reconciliations.

Webcast and Conference Call Information

Noble Energy, Inc. will host a live audio webcast and conference call at 8:00 a.m. Central Time on August 3, 2018. The webcast link is accessible on the 'Investors' page at www.nblenergy.com. A replay will be available on the website. Conference call numbers for participation during the question and answer session are:

Toll Free Dial in: 888-224-1005
International Dial in: 323-994-2093
Conference ID: 4132701


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Noble Energy (NYSE: NBL) is an independent oil and natural gas exploration and production company with a diversified high-quality portfolio of both U.S. unconventional and global offshore conventional assets. Founded more than 85 years ago, the Company is committed to safely and responsibly delivering our purpose: Energizing the World, Bettering People’s Lives®. For more information, visit www.nblenergy.com.

Investor Contacts
Brad Whitmarsh
(281) 943-1670
Brad.Whitmarsh@nblenergy.com

Megan Dolezal
(281) 943-1861
Megan.Dolezal@nblenergy.com

Media Contacts
Reba Reid
(713) 412-8441
media@nblenergy.com

Paula Beasley
(281) 876-6133
media@nblenergy.com

This news release contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates", "plans", "believes", "expects", "intends", "will", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy's current views about future events. Such forward-looking statements may include, but are not limited to, future financial and operating results, and other statements that are not historical facts, including estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations.  No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected.

8


These risks and uncertainties include, without limitation, the volatility in commodity prices for crude oil and natural 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 actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's businesses that are discussed in Noble Energy's most recent annual report on Form 10-K, and in other Noble Energy reports on file with the Securities and Exchange Commission (the "SEC"). These reports are also available from the sources described above. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not assume any obligation to update any forward-looking statements should circumstances or management’s estimates or opinions change.

This news release also contains certain historical non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Energy’s overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please see Noble Energy’s respective earnings release for reconciliations of the differences between any historical non-GAAP measures used in this news release and the most directly comparable GAAP financial measures.


9



Schedule 1
Noble Energy, Inc.
Summary Statement of Operations
(in millions, except per share amounts, unaudited) 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018 (1)
 
2017
 
2018 (1)
 
2017
Revenues
 
 
 
 
 
 
 
Oil, NGL and Gas Sales
$
1,100

 
$
1,017

 
$
2,273

 
$
2,011

Sales of Purchased Oil and Gas
66

 

 
119

 

Income from Equity Method Investees
49

 
38

 
96

 
80

Midstream Services Revenues – Third Party
15

 
4

 
28

 
4

Total Revenues
1,230

 
1,059

 
2,516

 
2,095

Operating Expenses
 
 
 
 
 
 
 
Lease Operating Expense
132

 
124

 
287

 
263

Production and Ad Valorem Taxes
50

 
32

 
104

 
73

Gathering, Transportation and Processing Expense
100

 
121

 
195

 
240

Other Royalty Expense
10

 
6

 
27

 
10

Marketing Expense
7

 
14

 
12

 
33

Exploration Expense
29

 
30

 
64

 
72

Depreciation, Depletion and Amortization
465

 
503

 
933

 
1,031

Loss on Marcellus Shale Upstream Divestiture

 
2,322

 

 
2,322

Purchased Oil and Gas
71

 

 
128

 

General and Administrative
105

 
103

 
209

 
202

Gain on Divestitures
(78
)
 

 
(666
)
 

Asset Impairments

 

 
168

 

Other Operating (Income) Expense, Net
(4
)
 
104

 
4

 
114

Total Operating Expenses
887

 
3,359

 
1,465

 
4,360

Operating Income (Loss)
343

 
(2,300
)
 
1,051

 
(2,265
)
Other Income
 
 
 
 
 
 
 
Loss (Gain) on Commodity Derivative Instruments
249

 
(57
)
 
328

 
(167
)
Interest, Net of Amount Capitalized
73

 
96

 
146

 
183

Other Non-Operating Expense (Income), Net
11

 
(5
)
 
24

 
(6
)
Total Other Expense
333

 
34

 
498

 
10

Income (Loss) Before Income Taxes
10

 
(2,334
)
 
553

 
(2,275
)
Income Tax Expense (Benefit)
16

 
(836
)
 
(15
)
 
(824
)
Net (Loss) Income and Comprehensive (Loss) Income Including Noncontrolling Interests
(6
)
 
(1,498
)
 
568

 
(1,451
)
Less: Net Income & Comprehensive Income Attributable to Noncontrolling Interests (2)
17

 
14

 
37

 
25

Net (Loss) Income and Comprehensive (Loss) Income Attributable to Noble Energy
$
(23
)
 
$
(1,512
)
 
$
531

 
$
(1,476
)
 
 
 
 
 
 
 
 
Net (Loss) Income Attributable to Noble Energy Per Share of Common Stock
 
 
 
 
 
 
 
(Loss) Income Per Share, Basic
$
(0.05
)
 
$
(3.20
)
 
$
1.09

 
$
(3.27
)
(Loss) Income Per Share, Diluted
$
(0.05
)
 
$
(3.20
)
 
$
1.09

 
$
(3.27
)
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding
 
 
 
 
 
 
 
Basic
484

 
472

 
485

 
452

Diluted
484

 
472

 
487

 
452



10


(1) On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method. As a result of adoption, we have changed the 2018 presentation of certain sales volumes, revenues and expenses related to sales of natural gas and NGLs based on the control model under ASC 606. 2017 information has not been recast to reflect this impact. See Schedule 4.
(2) The Company consolidates Noble Midstream Partners LP (NBLX), a publicly traded subsidiary of Noble Energy, as a variable interest entity for financial reporting purposes. The public's ownership interest in NBLX is reflected as a noncontrolling interest in the financial statements.

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in Noble Energy's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 3, 2018.

11


Schedule 2
Noble Energy, Inc.
Condensed Balance Sheets
(in millions, unaudited)
 
 
June 30, 2018
 
December 31, 2017
Assets
 
 
 
Current Assets
 
 
 
Cash and Cash Equivalents
$
621

 
$
675

Accounts Receivable, Net
743

 
748

Other Current Assets
187

 
780

Total Current Assets
1,551

 
2,203

Net Property, Plant and Equipment
17,917

 
17,502

Other Noncurrent Assets
984

 
461

Goodwill
1,402

 
1,310

Total Assets
$
21,854

 
$
21,476

Liabilities and Shareholders' Equity
 
 
 
Current Liabilities
 
 
 
Accounts Payable - Trade
$
1,308

 
$
1,161

Other Current Liabilities
745

 
578

Total Current Liabilities
2,053

 
1,739

Long-Term Debt
6,555

 
6,746

Deferred Income Taxes
970

 
1,127

Other Noncurrent Liabilities
995

 
1,245

Total Liabilities
10,573

 
10,857

Total Shareholders' Equity
10,252

 
9,936

Noncontrolling Interests (1)
1,029

 
683

Total Equity
11,281

 
10,619

Total Liabilities and Equity
$
21,854

 
$
21,476


(1) The Company consolidates Noble Midstream Partners LP (NBLX), a publicly traded subsidiary of Noble Energy, as a variable interest entity for financial reporting purposes. The public's ownership interest in NBLX is reflected as a noncontrolling interest in the financial statements.

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in Noble Energy's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 3, 2018.















12


Schedule 3
Noble Energy, Inc.
Condensed Statement of Cash Flows
(in millions, unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Cash Flows From Operating Activities
 
 
 
 
 
 
 
Net (Loss) Income Including Noncontrolling Interests (1)
$
(6
)
 
$
(1,498
)
 
$
568

 
$
(1,451
)
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities
 
 
 
 
 
 
 
Depreciation, Depletion and Amortization
465

 
503

 
933

 
1,031

Loss on Marcellus Shale Divestiture

 
2,322

 

 
2,322

Gain on Divestitures
(78
)
 

 
(666
)
 

Asset Impairments

 

 
168

 

Deferred Income Tax Benefit
(7
)
 
(873
)
 
(164
)
 
(873
)
Loss (Gain) on Commodity Derivative Instruments
249

 
(57
)
 
328

 
(167
)
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments
(65
)
 
11

 
(93
)
 
14

Other Adjustments for Noncash Items Included in Income
59

 
80

 
57

 
100

Net Changes in Working Capital
(121
)
 
(147
)
 
(52
)
 
(99
)
Net Cash Provided by Operating Activities
496

 
341

 
1,079

 
877

Cash Flows From Investing Activities
 
 
 
 
 
 
 
Additions to Property, Plant and Equipment
(995
)
 
(628
)
 
(1,782
)
 
(1,215
)
Proceeds from Sale of 7.5% Interest in Tamar Field
(3
)
 

 
484

 

Proceeds from Sale of CONE Gathering LLC and CNX Midstream Partners Common Units

135

 

 
443

 

Proceeds from Gulf of Mexico Divestiture
383

 

 
383

 

Proceeds from Marcellus Shale Upstream Divestiture

 
1,028

 

 
1,028

Clayton Williams Energy Acquisition

 
(616
)
 

 
(616
)
Acquisitions, Net of Cash Acquired (2)

 
(5
)
 
(650
)
 
(351
)
Proceeds from Other Divestitures
2

 
61

 
72

 
101

Other

 
(68
)
 

 
(68
)
Net Cash Used in Investing Activities
(478
)
 
(228
)
 
(1,050
)
 
(1,121
)
Cash Flows From Financing Activities
 
 
 
 
 
 
 
Dividends Paid, Common Stock
(54
)
 
(48
)
 
(102
)
 
(92
)
Purchase and Retirement of Common Stock
(63
)
 

 
(130
)
 

Proceeds from Noble Midstream Services Revolving Credit Facility
205

 
195

 
610

 
195

Repayment of Noble Midstream Services Revolving Credit Facility
(110
)
 
(5
)
 
(165
)
 
(5
)
Issuance of Noble Midstream Partners Common Units, Net of Offering Costs

 
138

 

 
138

Proceeds from Revolving Credit Facility
660

 
1,310

 
905

 
1,310

Repayment of Revolving Credit Facility
(660
)
 
(1,310
)
 
(1,135
)
 
(1,310
)
Repayment of Clayton Williams Energy Long-term Debt

 
(595
)
 

 
(595
)
Repayment of Senior Notes
(384
)
 

 
(384
)
 

Contributions from Noncontrolling Interest and Other
(2
)
 

 
331

 

Other
(11
)
 
(45
)
 
(51
)
 
(67
)
Net Cash Used in Financing Activities
(419
)
 
(360
)
 
(121
)
 
(426
)
Decrease in Cash, Cash Equivalents, and Restricted Cash
(401
)
 
(247
)
 
(92
)
 
(670
)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (3)
1,022

 
787

 
713

 
1,210

Cash, Cash Equivalents, and Restricted Cash at End of Period (4)
$
621

 
$
540

 
$
621

 
$
540


13



(1) The Company consolidates Noble Midstream Partners LP (NBLX), a publicly traded subsidiary of Noble Energy, as a variable interest entity for financial reporting purposes. For the three and six months ended June 30, 2018 and 2017, Net Loss (Income) includes Net Income Attributable to Noncontrolling Interests in NBLX.
(2) For the six months ended June 30, 2018, acquisitions, net of cash acquired relates to 100 percent of the acquisition of Saddle Butte Rockies Midstream, LLC by Noble Midstream Partners LP.
(3) As of the beginning of the periods presented, includes $30 million, $0 million, $38 million and $30 million of restricted cash, respectively.
(4) Includes no restricted cash as of June 30, 2018 or 2017.


These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in Noble Energy's Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on August 3, 2018.

14


Schedule 4
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Sales Volumes
2018
 
2017
 
2018
 
2017
Crude Oil and Condensate (MBbl/d)
 
 
 
 
 
 
 
United States Onshore
105

 
88

 
104

 
82

United States Gulf of Mexico
3

 
22

 
11

 
23

Equatorial Guinea
17

 
22

 
16

 
20

Equity Method Investee - Equatorial Guinea
2

 
2

 
2

 
2

Total
127

 
134

 
133

 
127

Natural Gas Liquids (MBbl/d)
 
 
 
 
 
 
 
United States Onshore (1)
61

 
61

 
62

 
54

United States Gulf of Mexico (3)

 
2

 
1

 
2

Equity Method Investee - Equatorial Guinea
5

 
4

 
5

 
5

Total
67

 
67

 
68

 
61

Natural Gas (MMcf/d)
 
 
 
 
 
 
 
United States Onshore (1)
465

 
720

 
474

 
713

United States Gulf of Mexico
2

 
16

 
12

 
20

Israel
225

 
272

 
243

 
272

Equatorial Guinea
225

 
231

 
215

 
237

Total
917

 
1,239

 
944

 
1,242

Total Sales Volumes (MBoe/d)
 
 
 
 
 
 
 
United States Onshore (1)
244

 
269

 
245

 
255

United States Gulf of Mexico
3

 
27

 
14

 
28

Israel
38

 
46

 
41

 
46

Equatorial Guinea
54

 
60

 
51

 
59

Equity Method Investee - Equatorial Guinea
7

 
6

 
7

 
7

Total Sales Volumes (MBoe/d)
346

 
408

 
358

 
395

 
 
 
 
 
 
 
 
Total Sales Volumes (MBoe)
31,527

 
37,103

 
64,779

 
71,470

 
 
 
 
 
 
 
 
Price Statistics - Realized Prices (2)
 
 
 
 
 
 
 
Crude Oil and Condensate ($/Bbl)
 
 
 
 
 
 
 
United States Onshore
$
64.62

 
$
45.63

 
$
63.08

 
$
47.13

United States Gulf of Mexico
66.80

 
46.34

 
64.87

 
47.96

Equatorial Guinea
72.79

 
49.53

 
70.65

 
51.28

Natural Gas Liquids ($/Bbl)
 
 
 
 
 
 
 
United States Onshore (1)
$
24.39

 
$
18.77

 
$
24.93

 
$
20.96

United States Gulf of Mexico
36.87

 
19.99

 
30.00

 
23.78

Natural Gas ($/Mcf)
 
 
 
 
 
 
 
United States Onshore (1)
$
2.29

 
$
3.19

 
$
2.45

 
$
3.32

United States Gulf of Mexico
3.19

 
3.86

 
3.50

 
3.44

Israel
5.46

 
5.34

 
5.47

 
5.33

Equatorial Guinea
0.27

 
0.27

 
0.27

 
0.27

(1) Due to adoption of ASC 606, Revenue from Contracts with Customers, U.S. onshore natural gas liquids volumes include 5 MBbl/d for both the three and six months ended June 30, 2018. U.S. onshore natural gas liquids pricing is reflected lower by $1.31/Bbl and $1.09/Bbl, respectively. U.S. onshore natural gas volumes include 31 MMcf/d for both the three and six months ended June 30, 2018. U.S. onshore natural gas pricing is reflected lower by $0.11/Mcf and $0.10/Mcf, respectively. 2017 information has not been recast to reflect the impact of adoption.
(2) Average realized prices do not include gains or losses on commodity derivative instruments.

15


(3) For the three months ended June 30, 2018, U.S. Gulf of Mexico NGL sales volumes were less than 1 MBbl/d.

16


Schedule 5
Noble Energy, Inc.
Reconciliation of Net (Loss) Income Attributable to Noble Energy and Per Share (GAAP) to
Adjusted Net Income Attributable to Noble Energy and Per Share (Non-GAAP)
(in millions, except per share amounts, unaudited)

Adjusted net income attributable to Noble Energy and per share (Non-GAAP) should not be considered an alternative to, or more meaningful than, net (loss) income attributable to Noble Energy and per share (GAAP) or any other measure as reported in accordance with GAAP. Our management believes, and certain investors may find, that adjusted income attributable to Noble Energy and per share (Non-GAAP) is beneficial in evaluating our operating and financial performance because it eliminates the impact of certain noncash and/or nonrecurring items that management does not consider to be indicative of our performance from period to period. We believe this Non-GAAP measure is used by analysts and investors to evaluate and compare our operating and financial performance across periods. As a performance measure, adjusted income attributable to Noble Energy and per share (Non-GAAP) may be useful for comparison of earnings and per share to forecasts prepared by analysts and other third parties. However, our presentation of adjusted income attributable to Noble Energy and per share (Non-GAAP), may not be comparable to similar measures of other companies in our industry.

17


 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net (Loss) Income Attributable to Noble Energy (GAAP)
$
(23
)
 
$
(1,512
)
 
$
531

 
$
(1,476
)
Adjustments to Net (Loss) Income
 
 
 
 
 
 
 
Loss on Marcellus Shale Upstream Divestiture

 
2,322

 

 
2,322

Gain on Divestitures
(78
)
 

 
(666
)
 

Asset Impairments

 

 
168

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
184

 
(46
)
 
235

 
(153
)
Loss on Investment in Shares of Tamar Petroleum Ltd.
11

 

 
40

 

Clayton Williams Energy Acquisition Costs

 
90

 

 
94

Other Adjustments
4

 
11

 
22

 
27

Total Adjustments Before Tax
121

 
2,377

 
(201
)
 
2,290

Current Income Tax Effect of Adjustments (1)
(3
)
 
3

 
94

 
1

Deferred Income Tax Effect of Adjustments (1)
(14
)
 
(844
)
 
(26
)
 
(814
)
         Tax Reform Impact (2)

 

 
(145
)
 

Adjusted Net Income Attributable to Noble Energy (Non-GAAP)
81

 
24

 
253

 
1

 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Noble Energy Per Share, Basic and Diluted (GAAP)
$
(0.05
)
 
$
(3.20
)
 
$
1.09

 
$
(3.27
)
Loss on Marcellus Shale Upstream Divestiture


4.90




5.11

Gain on Divestitures
(0.15
)
 

 
(1.36
)
 

Asset Impairments

 

 
0.34

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
0.38

 
(0.10
)
 
0.48

 
(0.34
)
Loss on Investment in Shares of Tamar Petroleum Ltd.
0.02

 

 
0.08

 

Clayton Williams Energy Acquisition Costs

 
0.19

 

 
0.21

Other Adjustments
0.01

 
0.04

 
0.05

 
0.09

Current Income Tax Effect of Adjustments (1)
(0.01
)
 
0.01

 
0.19

 

Deferred Income Tax Effect of Adjustments (1)
(0.03
)
 
(1.79
)
 
(0.05
)
 
(1.80
)
         Tax Reform Impact (2)

 

 
(0.30
)
 

Adjusted Income (Loss) Attributable to Noble Energy per Share, Diluted (Non-GAAP)
$
0.17

 
$
0.05

 
$
0.52

 
$

 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding, Basic
484

 
472

 
485

 
452

Incremental Dilutive Shares
2

 
2

 
2

 
2

Weighted Average Number of Shares Outstanding, Diluted
486

 
474

 
487

 
454


(1) Amount represents the income tax effect of adjustments, determined for each major tax jurisdiction for each adjusting item, including the impact of timing and magnitude of divestiture activities.
(2) During first quarter 2018, in response to Notice 2018-26, issued by the US Department of the Treasury and the Internal Revenue Service, we released the valuation allowance recorded against foreign tax credits expected to be utilized against the toll tax liability that we had recorded as of December 31, 2017, reduced our estimated toll tax liability, and recorded corresponding expense for the tax rate change adjustment on the previously utilized net operating losses. The impact on first quarter 2018 total tax expense, related to this additional guidance, was a net $145 million discrete tax benefit. No adjustments were made during second quarter 2018.


18


Schedule 6
Noble Energy, Inc.
Reconciliation of Net (Loss) Income Including Noncontrolling Interest (GAAP) to Adjusted EBITDAX (Non-GAAP)
(in millions, unaudited)

Adjusted Earnings Before Interest Expense, Income Taxes, Depreciation, Depletion and Amortization, and Exploration Expenses (Adjusted EBITDAX) (Non-GAAP) should not be considered an alternative to, or more meaningful than, net (loss) income including noncontrolling interest (GAAP) or any other measure as reported in accordance with GAAP. Our management believes, and certain investors may find, that Adjusted EBITDAX (Non-GAAP) is beneficial in evaluating our operating and financial performance because it eliminates the impact of certain noncash and/or nonrecurring items that management does not consider to be indicative of our performance from period to period. We believe these Non-GAAP measures are used by analysts and investors to evaluate and compare our operating and financial performance across periods. As a performance measure, Adjusted EBITDAX (Non-GAAP) may be useful for comparison to forecasts prepared by analysts and other third parties. However, our presentation of Adjusted EBITDAX (Non-GAAP) may not be comparable to similar measures of other companies in our industry.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net (Loss) Income Including Noncontrolling Interest (GAAP)
$
(6
)
 
$
(1,498
)
 
$
568

 
$
(1,451
)
Adjustments to Net Income (Loss), After Tax (1)
104

 
1,536

 
(278
)
 
1,477

Depreciation, Depletion, and Amortization
465

 
503

 
933

 
1,031

Exploration Expense (2)
29

 
30

 
64

 
54

Interest, Net of Amount Capitalized
73

 
96

 
146

 
183

Current Income Tax Expense (3)
26

 
34

 
39

 
48

Deferred Income Tax Expense (Benefit) (3)
7

 
(29
)
 
23

 
(59
)
Adjusted EBITDAX (Non-GAAP)
$
698

 
$
672

 
$
1,495

 
$
1,283


(1) See Schedule 5: Reconciliation of Net (Loss) Income Attributable to Noble Energy (GAAP) to Adjusted Income Attributable to Noble Energy (Non-GAAP).
(2) Represents remaining Exploration Expense after reversal of Adjustments to Net Income (Loss), After Tax, above.
(3) Represents remaining Income Tax Expense (Benefit) after reversal of Adjustments to Net Income (Loss), After Tax, above.

Capital Expenditures
(in millions, unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Organic Capital Expenditures, Attributable to Noble Energy (Accrual Based)
$
866

 
$
656

 
$
1,647

 
$
1,272

Acquisition Capital Attributable to Noble Energy

 
2,495

 

 
2,818

NBLX Capital Expenditures (1)
78

 
46

 
423

 
106

Total Reported Capital Expenditures (Accrual Based)
$
944

 
$
3,197

 
$
2,070

 
$
4,196


(1) NBLX Capital Expenditures for the six months ended June 30, 2018 includes $206 million related to the acquisition of Saddle Butte Rockies Midstream, LLC.








19
nbl20180630supex992
Second Quarter Supplement August 2018


 
2Q Key Highlights www.nblenergy.com NYSE: NBL Solid operational performance and continued focus on shareholder returns Strong natural gas demand drove Record USO oil sales volumes Completed record sales volumes 105 MBbl/d 2 Delaware CGFs and increased firm takeaway for > 1 Bcf/d led by Delaware and DJ Basins Permian oil gross, from Israel Exploration > $440 MM Progressed Alen Captured directed to NBL stock repurchase Gas Monetization new opportunities international and debt reduction in West Africa through Heads of offshore and U.S. onshore Agreement 2


 
2Q18 Actuals vs. Guidance www.nblenergy.com NYSE: NBL Volumes and total operating expenses in-line Financial & Operating Metrics 2Q Guidance 2Q Actuals Adjusted Earnings 2Q ($MM) Total Sales Volumes (MBoe/d) 340 – 350 346 Net (Loss) Income Attributable to NBL (GAAP) (23) Oil (MBbl/d) 124 – 132 127 Adjustments to Net (Loss) Income, Before Tax 121 Natural Gas Liquids (MBbl/d) 65 – 70 67 Adjusted Net Income attributable to NBL, Before Tax 98 Natural Gas (MMcf/d) 885 – 910 917 Current Income Tax Effect of Adjustments (3) Capital(1) ($MM) 750 – 850 866 Deferred Income Tax Effect of Adjustments (14) Lease Operating ($/BOE) 3.70 – 4.00 4.19 Adjusted Net Income Attributable to NBL(2) (Non-GAAP) 81 Gathering, Transportation & Processing ($/BOE) 3.30 – 3.60 3.17 Adjusted EBITDAX 2Q ($MM) Production Taxes (% Oil, NGL, Gas Revenues) 4.5 – 4.9 4.5 Net (Loss) Income Including Noncontrolling Interest(GAAP) (6) DD&A ($/BOE) 14.00 – 14.75 14.75 Adjustments to Net (Loss) Income, After Tax 104 Marketing ($MM) 8 – 12 7 DD&A 465 Exploration ($MM) 30 – 50 29 G&A ($MM) 100 – 110 105 Exploration 29 Interest, net ($MM) 70 – 80 73 Interest, net 73 Equity Investment Income ($MM) 35 – 50 49 Current Income Tax Expense, Adjusted 26 Midstream Services Revenue – Third Party ($MM) 10 – 20 15 Deferred Income Tax Expense, Adjusted 7 Noncontrolling Interest – NBLX Public Unitholders ($MM) 10 – 20 17 Adjusted EBITDAX(2) (Non-GAAP) 698 (1) Includes only NBL-funded portion of midstream capital expenditures. (2) Non-GAAP reconciliation to GAAP measure available in 2Q18 earnings release. 3


 
DJ Basin www.nblenergy.com NYSE: NBL Delivering above expectations CO Solid Operational Execution in 2Q18 DJ Basin Activity 2Q18 Weld • Added 2nd rig and 3rd frac crew Oil (MBbl/d) 60 NGL(1) (MBbl/d) 24 • Sales volumes of 121 MBoe/d reflect strong well East performance Gas(1) (MMcf/d) 219 Pony (1) • Oil mix of 50% (or 55% prior to impact of ASC 606 Total Sales (MBoe/d) 121 Operated Rigs 2 Wells implementation) Ranch (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wells Drilled 23 Wells Completed(2) 31 Mustang Anticipate Volume Growth in 2H18 Wells Brought Online(2) 16 NBL Acreage Municipalities • 25-30 wells planned to come online in both 3Q and 4Q Avg. Lateral Length (ft) 10,000 GOR: Low Mid High • Expect 2H18 DJ Basin gas processing expansions to support volume uplift MBoe/d Wells Ranch and East Pony Sales Volumes(1) • Timing Mustang wells online in coordination with 100 infrastructure expansion within basin 75 50 25 2Q16 2Q17 2Q18 (1) Reflects the current presentation of sales volumes, post-implementation of ASC 606 accounting standard. (2) Represents NBL operated activity. 4


 
DJ Basin Activity www.nblenergy.com NYSE: NBL Key well results Exceptional Productivity Continues from Wells Ranch Kona Wells – High Proppant Concentration Test Kona Wells MBoe/d gross rate total • Seven wells utilizing high sand concentrations of 2,800 – 10+ after 150 days online 3,600 lbs/ft proppant across 10,500+ ft. average lateral Wells Ranch • Continue to optimize well designs to maximize value and recovery per section oil cut, maintaining lower 60% GOR than offset wells • Higher proppant concentration at wider well spacing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Encouraging Early Results from Mustang Wells Mustang IDP • Wellhead pressures significantly higher than offset wells with similar GOR wells planned to be online by year-end 2018 across • First row development includes multiple proppant 30 lower GOR area concentration tests to optimize development Mustang • Initial six wells online late 2Q utilized 1,800 lbs/ft proppant standard design wells currently online and 10 ramping up • Utilizing new modular spec-oil facility design 5


 
DJ Basin Infrastructure www.nblenergy.com NYSE: NBL Line of sight to processing additions for growing DJ volumes DCP Plant 10 (Mewborne 3) DCP Plant 11 (O’Connor 2) NBL Well Positioned to Benefit from Near-term Processing - Adds 200 MMcf/d capacity - Adds 300 MMcf/d processing - Online August 2018 and bypass capacity Expansions - Expected online 2Q19 NBL Acreage New Processing Wells • Mustang activity planned in coordination with DCP Plant 10 Plant Ranch start-up in 3Q18 and Discovery addition in 4Q18 DCP Plant 12 • Additional near-term bypass and offload opportunities - Adds up to 1 Bcf/d • DCP Plant 11 and 12 support growth in 2019 and 2020 processing and Mustang bypass capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . beginning in 2020 Mustang Infrastructure Built To Maximize Gas Processing Flexibility Western Gas Latham Plant Discovery Plant • Diversified processing capacity across three providers with - Adds >200 MMcf/d capacity - Adds 200 MMcf/d capacity multiple offload points - Expected online in 2019 - Expected online in 4Q18 • Protected through compression Processing DCP and Discovery Gas Processing Capacity Capacity • NBLX completed gathering infrastructure (75% NBL owned, MMcf/d Supports Mustang Growth 25% NBLX) 1,600 1,100 600 2Q18 3Q18E 4Q18E 1Q19E 2Q19E 6


 
Delaware Basin www.nblenergy.com NYSE: NBL Doubled production year-over-year TX Solid Operations in 2Q with Sales Volumes of 47 MBoe/d Delaware Activity 2Q18 Reeves Ward • Majority of 2Q wells online late in quarter Oil (MBbl/d) 33 • 55 MBoe/d average July production NGL (MBbl/d) 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gas (MMcf/d) 40 Progressed Midstream Infrastructure Build-out Total Sales (MBoe/d) 47 Operated Rigs 6 • 5 central gathering facilities (CGFs) now online, expanding oil (1) gathering capacity to 90 MBbl/d Wells Drilled 22 Wells Completed(1) 22 Pecos • All CGFs connected and flowing through the Advantage crude Wells Brought Online(1) 23 oil pipeline (operated by NBLX) Avg. Lateral Length (ft) 9,050 NBL Acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Modifying Near-term Activity to Address Basin Constraints Delaware Basin Net Production(2) MBoe/d 100% Volume Growth 2Q17 to 2Q18 • Timing development to align with pipeline expansions 50 40 • Temporarily reducing completion activity late 3Q18; optimizing 30 drilling for row development around CGFs 20 • 15-20 wells planned to come online in both 3Q and 4Q 10 0 2Q16 2Q17 2Q18 Total Oil (MBbl/d) (1) Represents NBL operated activity. (2) Includes impact of CWEI acquisition which closed in 2Q17. 7


 
Delaware Basin Activity www.nblenergy.com NYSE: NBL Demonstrating strength of asset across acreage position 2Q18 Activity Focused on Wolfcamp A Upper and Lower Zones Recycled Water Test 100% Use 100 Mesh Test . Used 100% recycled . Primarily locally • 21 of 23 wells online were in Wolfcamp A, majority were multi-well pads water in completion sourced 100 mesh sand . 1 Wolfcamp A well . 2 Wolfcamp A wells avg. • 18 of the 23 wells were long laterals, over 9,000 ft lateral length IP-30 1,510 Boe/d IP-30 1,520 Boe/d . 4,370 ft lateral length, . 10,140 ft avg. lateral • Longer laterals experiencing shallower declines 74% oil length, 82% oil • IP-60 averaging 93% of IP-30 for 2Q wells that have reached 60 days Reeves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Progressing Development of Legacy Clayton Williams Acreage Central Gathering • Strong well performance in 2Q18 Facilities . 4th and 5th CGFs • Nearly all wells brought online flowing through CGFs online in 2Q18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Continue to Drive Operating Efficiencies NBL Acreage • Reduced drilling days by 10% in 1H18 vs. 2017 Southern Wolfcamp A Well Results • Lateral length for wells online increased by 30% in 1H18 vs. 2017 . 9 wells in Wolfcamp A Upper and Lower Zones . Avg. IP-30 1,600 Boe/d; Avg. IP-60 1,495 Boe/d • Increased use of recycled water for completions to 10% . 9,540 ft avg. lateral length, 82% oil 8


 
Permian Oil Takeaway www.nblenergy.com NYSE: NBL Securing flow assurance and diversifying pricing Majority of New Production Transported via Pipe to Sales Point Diversified Permian Firm Oil Takeaway • Wells gathered from wellhead to CGFs NBL Acreage Existing Pipeline Midland • Oil volumes connected from CGFs to Advantage Pipeline system (operated by NBLX) transported to Crane with access to Midland Advantage Pipeline to Crane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cushing Crane Reducing Price Impact of Wide Midland Differentials • Diversified end markets for Delaware oil volumes Reeves Midland • Mid-Cush basis hedging provides further protection • ~5% of 2H18 Total Company sales volumes exposed to Midland Crane pricing(2) Permian Firm Oil Takeaway 2H18-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Houston 25 MBbl/d Avg. 2H18-2019 Firm Sales(1) EPIC Firm Transport Agreement Will Provide Access to Majority to Gulf Coast 100 MBbl/d via EPIC pipeline to Gulf Firm Transport(1) Corpus Christi Premium Priced Markets from Gulf Coast Coast online in 4Q19 • Secured capacity for 100 MBbl/d gross on EPIC crude pipeline Basis Hedges 2H18-2019 20 MBbl/d in 2H18 at $2.30/Bbl avg. Mid-Cush • Anticipate start-up in 4Q19 27 MBbl/d in 2019 at $3.23/Bbl avg. (1) Represents gross sales volumes. (2) Includes impact of basis hedges. 9


 
Noble Midstream (NBLX) www.nblenergy.com NYSE: NBL Peer-leading distribution growth and growing third-party services 20% 192 4 1.8x targeted MBoe/d record quarterly major projects distribution coverage annual distribution oil and gas volumes completed in 2Q with a strong growth gathered in 2Q balance sheet Delaware Basin Highlights DJ Basin Highlights • Delivered CGF Construction in Support of NBL Delaware • Maintained Wells Ranch and East Pony Volumes Volume Growth Gathered from Fewer Wells Turned Online 2Q vs. 1Q . Completed Billy Miner II and Collier CGFs in 2Q18 . Total gathering capacity from 5 CGFs expanded to 90 • Mustang IDP Gathering Infrastructure Online at the End MBbl/d for oil, and 115 MBoe/d including natural gas of 2Q18 . Spec gathering system for oil, gas, and produced water • All CGFs Connecting through Advantage System by . Delivered fresh water to two frac crews in Mustang Mid-year for a full quarter • Grew Advantage Pipeline Oil Throughput to 105 MBbl/d; • Reported a Full Quarter of Contribution from Black 19% increase from 1Q18 Diamond Gathering . Increased dedicated system acres by 12% • Advantage Pipeline Capacity Expansion to 200 MBbl/d . 2Q18 throughput up 4% from time of acquisition Completed in July close 10


 
Eastern Mediterranean www.nblenergy.com NYSE: NBL Growing natural gas demand with stable long-term cash flows Aphrodite Tamar Record Gross Sales Volumes 1,019 MMcfe/d; Net Sales 35% WI 25% WI Volumes 227 MMcfe/d Leviathan • Driven by strong demand and weather 39.7% WI Dor Tamar SW • Price realizations of $5.46/Mcf 25% WI Tel Aviv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NBL Interests Producing Discovery Ashdod Over 900 MMcf/d Total Volume Under Contract for Leviathan Field Development • Over 200 MMcf/d contracted to meet Israel domestic consumption Existing Pipeline Planned Pipeline Israel • 700 MMcf/d contracted for exports Egypt • 350 MMcf/d to Egypt and 350 MMcf/d to Jordan Israel Gross Production MMcfe/d All-time Record in 2Q18, Over 1 Bcfe/d • Continue negotiations to fill up Leviathan phase 1 to 1 Bcf/d 1,200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 Progressing Options for Multiple Pipelines Routes to Export 800 Gas to Regional Markets 600 • Prioritizing use of existing infrastructure to Jordan and Egypt 400 200 2Q15 2Q16 2Q17 2Q18 11


 
Eastern Mediterranean Leviathan Development www.nblenergy.com NYSE: NBL Project ~60% complete and progressing towards first gas sales by year-end 2019 Leviathan Major Project Development Remains On Schedule and On Budget, Several Milestones Achieved: • Finished drilling program and began completion activity • Completed first subsea tree installation • Completed floating of the production decks • Finished pipelay for gathering lines • Completed direct pipe shore crossing Construction of Leviathan Platform Project Phase 2017 2018 2019 Sanction Order Critical Path Equipment Detail Design and Engineering Equipment Manufacturing Drilling and Completions Pipeline Manufacturing Offshore Platform Installation Commissioning and First Gas Subsea Tree Installation Jacket Fabrication 12


 
Financial Position www.nblenergy.com NYSE: NBL Continued focus on financial strength and shareholder returns Progressing Direct Shareholder Return Initiatives Reduced NBL Debt by $2.6 B • Repurchased 1.8 MM shares outstanding in 2Q18 $B Since Beginning of 2016 10 • $750 MM share repurchase program, 17% complete in 1H18 • 10% dividend increase in 1H18 8 CWEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Assumed Debt Accomplished $600 MM NBL Debt Reduction 3-Year Target 4 Debt Retirement • $379 MM reduction in 2Q18 removed legacy ROSE debt 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . YE15 2Q18 Realized Proceeds of ~$520 MM in 2Q18 Investment Grade Credit Ratings • Gulf of Mexico divestiture and CNXM unit sale Current Rating Agency Summary • Funds allocated for share repurchases and debt reduction Moody’s Baa3 Stable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S&P BBB Neutral Robust Liquidity of $4.6 B at end of 2Q18 Fitch BBB- Positive 13


 
Updated 2018 Outlook www.nblenergy.com NYSE: NBL Delivering significant volume growth year-over-year FY18 U.S. Onshore Oil Expected to Grow >25% from FY17 Maintaining Total Company Sales MBoe/d Volumes(2) Growth Target • Anticipate nearly 10 MBbl/d oil growth from 2Q to 3Q and 400 Up 12% ~5 MBbl/d growth from 3Q to 4Q 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Full Year Sales Volumes Towards Lower End of 250 350 – 360 MBoe/d Range 200 FY17 FY18E • EMed and West Africa volumes expected in upper half of Total original guided ranges Strong USO Sales Volumes(2) Growth • U.S. onshore volumes expected lower due to near-term MBoe/d MBbl/d Permian completion deferrals and Eagle Ford declines 300 Total: Up > 15% 150 Oil: Up > 25% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Reallocating Near-term U.S. Onshore Capital to Optimize 200 100 Returns and Cash Flow 150 (1) 100 50 • Full year capital budget increased to $3.0 B driven by FY17 FY18E higher facility spend and industry cost inflation Total Oil (1) Excludes NBLX funded capital expenditures. (2) Pro-forma for acquisitions and divestitures. Reflects volumes post-implementation of ASC 606. 14


 
www.nblenergy.com NYSE: NBL Third Quarter 2018 Guidance Crude Oil and Natural Gas Liquids Natural Gas Total Equivalent 3Q 2018 Sales Volume Condensate (MBbl/d) (MBbl/d) (MMcf/d) (MBoe/d) Low High Low High Low High Low High United States Onshore 110 118 54 59 445 465 241 251 Israel - - - - 220 240 37 40 Equatorial Guinea 11 15 - - 200 220 46 50 Equatorial Guinea - Equity method investment 1 2 5 5 - - 6 7 Total Company 125 132 59 64 880 910 335 345 Capital & Cost Metrics Capital Expenditures(1) ($MM) Total Company Organic Capital $700 - $775 Cost Metrics LOW HIGH Lease Operating Expense ($/BOE) 3.90 4.30 Gathering, Transportation & Processing ($/BOE) 3.10 3.40 Production Taxes (% Oil, Gas, NGL Revenues) 4.6 5.0 Marketing ($MM) 8 12 DD&A ($/BOE) 15.25 16.25 Exploration ($MM) 30 50 G&A ($MM) 100 110 Interest, net ($MM) 70 80 Other Guidance Items ($MM) Equity Investment Income 30 45 Midstream Services Revenue – Third Party 10 20 Non-Controlling Interest – NBLX Public Unitholders 15 25 (1) Includes only NBL-funded portion of midstream capital expenditures. 15


 
www.nblenergy.com NYSE: NBL Full-Year 2018 Guidance Crude Oil and Natural Gas Liquids Natural Gas Total Equivalent Full-Year 2018 Sales Volume Condensate (MBbl/d) (MBbl/d) (MMcf/d) (MBoe/d) Low High Low High Low High Low High United States Onshore 108 113 57 60 460 480 244 252 United States Gulf of Mexico(1) 5 5 - 1 6 6 7 7 Israel(1) - - - - 225 245 38 40 Equatorial Guinea 13 15 - - 200 220 47 51 Equatorial Guinea - Equity method investment 1 2 5 5 - - 7 7 Total Company 129 135 62 66 915 930 350 360 Capital & Cost Metrics Capital Expenditures(2) ($MM) Total Company Organic Capital ~ $3,000 Cost Metrics LOW HIGH Lease Operating Expense ($/BOE) 4.30 4.60 Gathering, Transportation & Processing ($/BOE) 2.95 3.15 Production Taxes (% Oil, Gas, NGL Revenues) 4.6 5.0 Marketing ($MM) 30 45 DD&A ($/BOE) 14.50 15.25 Exploration ($MM) 125 150 G&A ($MM) 400 430 Interest, net ($MM) 260 300 Other Guidance Items ($MM) Equity Investment Income 140 180 Midstream Services Revenue – Third Party 50 70 Non-Controlling Interest – NBLX Public Unitholders 80 105 (1) U.S. Gulf of Mexico volumes are included in sales guidance through closing April 12, 2018. Israel sales volumes reflect divestment of 7.5% interest in Tamar on March 11, 2018. (2) Includes only NBL-funded portion of midstream capital expenditures. 16


 
www.nblenergy.com NYSE: NBL Forward-Looking Statements and Other Matters This presentation contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates", "plans", "believes", "expects", "intends", "will", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy's current views about future events. Such forward-looking statements may include, but are not limited to, future financial and operating results, and other statements that are not historical facts, including estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this presentation will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, without limitation, the volatility in commodity prices for crude oil and natural 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 actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's businesses that are discussed in Noble Energy's most recent annual report on Form 10-K and in other Noble Energy reports on file with the Securities and Exchange Commission (the "SEC"). These reports are also available from the sources described above. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not assume any obligation to update any forward-looking statements should circumstances or management’s estimates or opinions change. This presentation also contains certain non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Energy’s overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please see the attached schedules for reconciliations of the differences between any historical non-GAAP measures used in this presentation and the most directly comparable GAAP financial measures. 17


 
Investor Relations Contacts Brad Whitmarsh Megan Dolezal 281.943.1670 281.943.1861 brad.whitmarsh@nblenergy.com megan.dolezal@nblenergy.com Visit us on the Investor Relations Homepage at www.nblenergy.com