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): November 1, 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 November 1, 2018 Noble Energy, Inc. (the “Company”) issued a press release announcing results for the fiscal quarter ended September 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 September 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 November 1, 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 exhibits are 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:
November 1, 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 THIRD QUARTER 2018 RESULTS, INCLUDING NEARLY 30 PERCENT YEAR ON YEAR OPERATING CASH FLOW GROWTH

HOUSTON (November 1, 2018) -- Noble Energy, Inc. (NYSE: NBL) (“Noble Energy” or the "Company”) today announced third quarter 2018 financial and operating results. Highlights include:
Delivered sales volumes of 345 MBoe/d, with all business units at or above the midpoint of guidance.
Increased U.S. onshore liquids production to 172 MBbl/d, up 18 percent(1) compared to third quarter 2017. Achieved records for both U.S. onshore oil volumes at 109 MBbl/d and NGL volumes at 63 MBbl/d, driven by Delaware and DJ Basin growth.
Sold a record of nearly 1.1 Bcfe/d of natural gas equivalents, gross, from the Company’s Israel assets, driven by high power demand and coal displacement.
Disciplined spending drove organic capital expenditures to the low end of guidance at $716 million, with total operating expenses also below expectations.
Announced pipeline agreements for multiple transportation routes to supply natural gas from Tamar and Leviathan, offshore Israel, into Egypt.
Received $358 million in asset sale proceeds, including the divestment of the Company’s remaining CNXM units and the second closure of the Greeley Crescent sale in the DJ Basin, contributing to total financial liquidity at the end of the third quarter of $4.7 billion.
Accelerated share repurchase program, deploying $103 million to repurchase 3.4 million Noble Energy shares in the third quarter, bringing total year-to-date repurchased to $233 million.
Noble Midstream Partners achieved record gathering throughput while expanding new gathering and pipeline opportunities in the Delaware Basin.


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David L. Stover, Noble Energy’s Chairman, President and CEO, commented, “We achieved a number of key operational and strategic objectives in the third quarter, reflecting our team’s continued hard work and execution. Strong volumes across all business units, cost management, and improved price realizations delivered our highest quarterly operating cash flow in the last four years. During the quarter, we accelerated the return of capital to shareholders, allocating $157 million to share repurchases and dividends. With a deep inventory of high-return projects across our global portfolio and disciplined capital allocation, we are poised to deliver differentiated shareholder returns."


Third Quarter 2018 Results

The Company reported third quarter net income attributable to Noble Energy of $227 million, or $0.47 per diluted share. Net income including noncontrolling interest was $248 million. 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 $129 million, or $0.27 per diluted share. Adjustments were primarily the Company’s mark to market on unrealized commodity derivative positions and gains on divestitures. Adjusted EBITDAX(2) was $766 million and operating cash flow was $697 million, representing increases of 23 percent and 29 percent, respectively, from the third quarter 2017.

Total company sales volumes for the third quarter 2018 were 345 thousand barrels of oil equivalent per day (MBoe/d), at the upper end of the Company’s guidance range. Compared to the third quarter 2017, sales volumes increased by eight percent(1) due primarily to higher volumes from the Company's Delaware and DJ Basin assets. U.S. onshore production comprised 72 percent of total volumes in the third quarter 2018, with West Africa representing 16 percent and Israel representing 12 percent. Liquids were 55 percent of total sales volumes for the third quarter 2018.



2


Unit operating expenses for the third quarter 2018, including lease operating expenses (LOE), production and ad valorem taxes, gathering, transportation and processing expenses (GTP), other royalty expense and marketing costs totaled $8.96 per barrel of oil equivalent (BOE). Compared to the third quarter 2017, per unit combined LOE and GTP decreased by seven percent, benefitted by low-cost DJ and Delaware Basin volume growth as well as the divestment of higher cost Gulf of Mexico assets earlier in 2018.

Income from equity method investees for the quarter totaled $44 million, primarily from the Company’s operations in West Africa, driven by strength in oil and global methanol pricing. Other income in the third quarter included $17 million in dividend income from the Company’s ownership of Tamar Petroleum Ltd. (“TMRP”).

Interest expense in the third quarter of $70 million decreased 20 percent from the third quarter 2017. This was driven by a $1.2 billion debt reduction for Noble Energy, including repaying the Noble Energy term loan, redeeming the legacy Rosetta Resources Inc. notes and refinancing higher coupon bonds.

Third quarter 2018 organic capital investments attributable to Noble Energy totaled $716 million. The Company spent $505 million related to U.S. onshore upstream activities and $29 million for Noble Energy’s portion of Noble Midstream Partners LP ("NBLX") (NYSE: NBLX) capital. Consolidated capital expenditures included an additional $40 million in expenditures funded by NBLX. U.S. onshore capital was lower by more than $100 million from the second quarter 2018, primarily due to lower midstream spend from the infrastructure build-out completed in the first half of 2018 and lower completion activity in the Delaware. The Company’s capital expenditures in Israel were $172 million, primarily for the development of the Leviathan project, and $10 million in West Africa and other corporate expenditures.

The results for NBLX are consolidated into Noble Energy’s financial statements. Midstream Services Revenue of $21 million for the quarter was primarily composed of NBLX's gathering revenue from unaffiliated third parties. The public’s 55 percent ownership of third quarter net income attributable to NBLX, $21 million, has been excluded from net income attributable to Noble Energy.
Delivering Record Liquids Production Onshore and Optimizing Developments

Total sales volumes from the Company’s U.S. onshore assets averaged 249 MBoe/d in the third quarter 2018, towards the higher end of the Company’s guidance. U.S. onshore oil volumes totaled a record 109 thousand barrels of oil per day (MBbl/d), up 23 percent(1) from the third quarter 2017. U.S. onshore NGL volumes of 63 MBbl/d also represented a record for the Company.

The DJ Basin averaged 126 MBoe/d for the third quarter 2018, up seven percent(1) from the third quarter 2017. During the quarter, the Company brought 37 wells online. Ten of these wells are located in the high GOR area in Bronco, driving strong NGL and natural gas volumes. The remaining wells are located in Mustang, which ramped up significantly throughout the quarter. Current production from the initial 31 wells in Mustang is consistent with expectations, totaling 27 MBoe/d gross, at an oil mix of over 60 percent. Third quarter oil production in the DJ Basin was impacted by a moderated initial production ramp from the Mustang wells.

Sales volumes from the Company's Delaware Basin assets totaled 58 MBoe/d, representing an increase of 115 percent from the third quarter of last year. During the quarter, the Company brought 20 wells online. The majority of the wells were in the Wolfcamp A, which produced on average an IP-30 rate of 1,270 Boe/d, or 154 Boe/d per 1,000 lateral feet. The Company transitioned to row development, focusing near-term drilling activity primarily on the Wolfcamp A and Third Bone Spring zones near existing central gathering facilities.

Sales volumes from the Eagle Ford totaled 65 MBoe/d for the third quarter, down 14 percent from the third quarter 2017, as the Company commenced production on only nine wells year-to-date, none of which were in the third quarter. Activity in the quarter focused on drilling and completions, which will begin to impact production in early 2019. During the quarter, the Company reached more than 365 days without a recordable injury within Eagle Ford operations.



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

Strong Offshore Performance and Gas Monetization Progress

Third quarter gross sales volumes in Israel set a quarterly record for the Company of 1,090 million cubic feet of natural gas equivalent per day (MMcfe/d), up nine percent from the third quarter 2017, driven by increased electricity demand and higher coal displacement. Net sales volumes totaled 242 MMcfe/d during the third quarter 2018.

Construction of the Leviathan project is 67 percent complete, with anticipated first gas sales on schedule by the end of 2019. During the third quarter, the Company finalized the installation of subsea trees and progressed fabrication of the deck and jacket. The Company also completed two of the four production wells and conducted flow tests, which confirmed deliverability of more than 300 MMcfe/d per well.

During the third quarter, the Company executed agreements for multiple transportation routes for Leviathan and Tamar natural gas exports to Egypt. Noble Energy entered into agreements to acquire an effective 10 percent indirect equity ownership in the EMG Pipeline. The Company has begun technical evaluation for flow reversal and expects to demonstrate interruptible gas sales from Tamar into Egypt in the first half of 2019. Upon closing the transaction, the Company and its partners will become operators of the pipeline and obtain access to its full capacity. In addition, the Company secured an option to transport natural gas within Egypt through the Aqaba El Arish Pipeline.

Sales volumes from West Africa in the third quarter 2018 were 55 MBoe/d, with 25 percent oil. Produced volumes were 3 MBbl/d higher than sales volumes, due to the timing of liftings. The Company achieved milestones of 100 liftings from Alen and over 150 liftings from Aseng since start-up. The Company also continues to progress the front-end engineering design and marketing activities for the Alen gas monetization project and anticipates sanctioning the development early 2019.


4


Progress on Financial Initiatives

The Company continued to prioritize direct shareholder returns through share repurchases and quarterly cash dividends. During the quarter, the Company deployed $103 million to repurchase 3.4 million shares of Noble Energy stock, bringing total year-to-date repurchases to $233 million. In addition, the Company declared a quarterly dividend of 11 cents per share totaling $54 million in payout.

Total financial liquidity at the end of the third quarter was $4.7 billion. Included in financial liquidity was $4 billion in Noble Energy’s undrawn credit facility borrowing capacity and $720 million in cash, an increase of $100 million compared to the second quarter 2018.

During the third quarter, the Company sold its remaining 14.2 million CNX Midstream Partners LP common units for proceeds of $248 million. The Company recorded a gain of $198 million on the transaction. In addition, the Company realized proceeds of $110 million from non-core divestitures, the majority of which was due to the second closing of the Greeley Crescent sale in the western edge of the Company’s DJ Basin position.

In early October, the Company sold its remaining 38.5 million TMRP units for proceeds of $163 million.


Guidance

The Company is maintaining its full year total company sales volume guidance and capital expectations.

Sales volumes in the fourth quarter are estimated to range between 337 and 349 MBoe/d. Total company oil volumes are expected to be higher sequentially primarily as a result of DJ Basin growth and West Africa performance and liftings. The Company anticipates $625 to $700 million for fourth quarter capital expenditures.

Fourth quarter U.S. onshore volumes are expected to be essentially flat from the third quarter with growth mainly from the DJ Basin offsetting declines in the Eagle Ford. Fourth quarter DJ Basin volumes also reflect 4 MBoe/d of divested volumes from the second closing of the Greeley Crescent sale, which occurred in September 2018. Israel sales volumes are anticipated to be slightly lower than the third quarter due to seasonal gas demand. West Africa sales volumes are expected to be higher with a greater contribution of condensate due to Alen liftings, which is also impacting fourth quarter cost metrics.

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, and post-implementation of ASC 606 accounting standard.
(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 November 1, 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: 877-883-0383
International Dial in: 412-902-6506
Conference ID: 3352938

Noble Energy (NYSE: NBL) is an independent oil and natural gas exploration and production company committed to meeting the world’s growing energy needs and delivering leading returns to shareholders. The Company operates a high-quality portfolio of assets onshore in the United States and offshore in the Eastern Mediterranean and off the west coast of Africa. Founded more than 85 years ago, Noble Energy is guided by its values, its commitment to safety, and respect for stakeholders, communities and the environment.

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For more information on how the Company fulfills its purpose: Energizing the World, Bettering People’s Lives®, visit https://www.nblenergy.com.

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

Park Carrere
(281) 872-3208
Park.Carrere@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”, “estimates”, "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

6


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, quarterly report on Form 10-Q, 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.

7



Schedule 1
Noble Energy, Inc.
Summary Statement of Operations
(in millions, except per share amounts, unaudited) 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018 (1)
 
2017
 
2018 (1)
 
2017
Revenues
 
 
 
 
 
 
 
Oil, NGL and Gas Sales
$
1,136

 
$
907

 
$
3,409

 
$
2,918

Sales of Purchased Oil and Gas
72

 

 
191

 

Income from Equity Method Investees
44

 
46

 
140

 
125

Midstream Services Revenues – Third Party
21

 
7

 
49

 
12

Total Revenues
1,273

 
960

 
3,789

 
3,055

Operating Expenses
 
 
 
 
 
 
 
Lease Operating Expense
124

 
151

 
411

 
414

Production and Ad Valorem Taxes
47

 
31

 
151

 
104

Gathering, Transportation and Processing Expense
97

 
93

 
292

 
333

Other Royalty Expense
5

 
5

 
32

 
15

Marketing Expense
11

 
6

 
21

 
39

Exploration Expense
25

 
64

 
89

 
136

Depreciation, Depletion and Amortization
485

 
523

 
1,418

 
1,554

Loss on Marcellus Shale Exit Activities

 
4

 

 
2,326

Purchased Oil and Gas
76

 

 
204

 

General and Administrative
107

 
102

 
316

 
304

Gain on Divestitures
(193
)
 

 
(859
)
 

Asset Impairments

 

 
168

 

Other Operating (Income) Expense, Net
(9
)
 
(21
)
 
(3
)
 
93

Total Operating Expenses
775

 
958

 
2,240

 
5,318

Operating Income (Loss)
498

 
2

 
1,549

 
(2,263
)
Other Income
 
 
 
 
 
 
 
Loss (Gain) on Commodity Derivative Instruments
155

 
22

 
483

 
(145
)
Interest, Net of Amount Capitalized
70

 
88

 
216

 
271

Other Non-Operating (Income) Expense, Net
(34
)
 
100

 
(10
)
 
94

Total Other Expense
191

 
210

 
689

 
220

Income (Loss) Before Income Taxes
307

 
(208
)
 
860

 
(2,483
)
Income Tax Expense (Benefit)
59

 
(93
)
 
44

 
(917
)
Net Income (Loss) and Comprehensive Income (Loss) Including Noncontrolling Interests
248

 
(115
)
 
816

 
(1,566
)
Less: Net Income and Comprehensive Income Attributable to Noncontrolling Interests (2)
21

 
21

 
58

 
46

Net Income (Loss) and Comprehensive Income (Loss) Attributable to Noble Energy
$
227

 
$
(136
)
 
$
758

 
$
(1,612
)
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Noble Energy Per Share of Common Stock
 
 
 
 
 
 
 
Income (Loss) Per Share, Basic
$
0.47

 
$
(0.28
)
 
$
1.57

 
$
(3.47
)
Income (Loss) Per Share, Diluted
$
0.47

 
$
(0.28
)
 
$
1.56

 
$
(3.47
)
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding
 
 
 
 
 
 
 
Basic
482

 
487

 
484

 
464

Diluted
484

 
487

 
486

 
464



8


(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 November 1, 2018.

9


Schedule 2
Noble Energy, Inc.
Condensed Balance Sheets
(in millions, unaudited)
 
 
September 30, 2018
 
December 31, 2017
Assets
 
 
 
Current Assets
 
 
 
Cash and Cash Equivalents
$
720

 
$
675

Accounts Receivable, Net
698

 
748

Other Current Assets
309

 
780

Total Current Assets
1,727

 
2,203

Net Property, Plant and Equipment
18,245

 
17,502

Other Noncurrent Assets
774

 
461

Goodwill
1,401

 
1,310

Total Assets
$
22,147

 
$
21,476

Liabilities and Shareholders' Equity
 
 
 
Current Liabilities
 
 
 
Accounts Payable - Trade
$
1,239

 
$
1,161

Other Current Liabilities
885

 
578

Total Current Liabilities
2,124

 
1,739

Long-Term Debt
6,571

 
6,746

Deferred Income Taxes
983

 
1,127

Other Noncurrent Liabilities
1,075

 
1,245

Total Liabilities
10,753

 
10,857

Total Shareholders' Equity
10,346

 
9,936

Noncontrolling Interests (1)
1,048

 
683

Total Equity
11,394

 
10,619

Total Liabilities and Equity
$
22,147

 
$
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 November 1, 2018.















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Schedule 3
Noble Energy, Inc.
Condensed Statement of Cash Flows
(in millions, unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Cash Flows From Operating Activities
 
 
 
 
 
 
 
Net Income (Loss) Including Noncontrolling Interests (1)
$
248

 
$
(115
)
 
$
816

 
$
(1,566
)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities
 
 
 
 
 
 
 
Depreciation, Depletion and Amortization
485

 
523

 
1,418

 
1,554

Loss on Marcellus Shale Exit Activities

 
4

 

 
2,326

Gain on Divestitures
(193
)
 

 
(859
)
 

Asset Impairments

 

 
168

 

Deferred Income Tax Expense (Benefit)
14

 
(115
)
 
(150
)
 
(988
)
Loss (Gain) on Commodity Derivative Instruments
155

 
22

 
483

 
(145
)
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments
(67
)
 
4

 
(160
)
 
18

Other Adjustments for Noncash Items Included in Income
(12
)

146


45


246

Net Changes in Working Capital
67

 
72

 
15

 
(27
)
Net Cash Provided by Operating Activities
697

 
541

 
1,776

 
1,418

Cash Flows From Investing Activities
 
 
 
 
 
 
 
Additions to Property, Plant and Equipment
(807
)
 
(741
)
 
(2,589
)
 
(1,956
)
Proceeds from Divestitures (2)
358

 
28

 
1,740

 
1,157

Clayton Williams Energy Acquisition, Net of Cash Received

 

 

 
(616
)
Saddle Butte Acquisition, Net of Cash Received (3)

 

 
(650
)
 

Other Acquisitions
(3
)
 
(6
)
 
(3
)
 
(357
)
Other






(68
)
Net Cash Used in Investing Activities
(452
)
 
(719
)
 
(1,502
)
 
(1,840
)
Cash Flows From Financing Activities
 
 
 
 
 
 
 
Dividends Paid, Common Stock
(54
)
 
(49
)
 
(156
)
 
(141
)
Purchase and Retirement of Common Stock
(93
)
 

 
(223
)
 

Noble Midstream Services Revolving Credit Facility, Net
(480
)
 
10

 
(35
)
 
200

Proceeds from Noble Midstream Services Term Loan Credit Facility
500

 

 
500

 

Issuance of Noble Midstream Partners Common Units, Net of Offering Costs

 

 

 
138

Revolving Credit Facility, Net

 
275

 
(230
)
 
275

Repayment of Clayton Williams Energy Long-term Debt

 

 

 
(595
)
Senior Notes, Net

 
(10
)
 
(384
)
 
(10
)
Contributions from Noncontrolling Interest and Other
17

 

 
348

 

Other
(35
)

(24
)

(86
)

(91
)
Net Cash Used in Financing Activities
(145
)
 
202

 
(266
)
 
(224
)
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
100


24


8


(646
)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (4)
621

 
540

 
713

 
1,210

Cash, Cash Equivalents, and Restricted Cash at End of Period (5)
$
721

 
$
564

 
$
721

 
$
564


(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 nine months ended September 30, 2018 and 2017, Net Income (Loss) includes Net Income Attributable to Noncontrolling Interests in NBLX.

11


(2) For the three months ended September 30, 2018, proceeds include $248 million from the sale of the remaining CNX Midstream Partners common units. For the nine months ended September 30, 2018, proceeds include $484 million from the sale of 7.5% interest in Tamar field, $691 million from the sale of CONE Gathering LLC and CNX Midstream Partners common units and $383 million from the Gulf of Mexico divestiture. For the nine months ended September 30, 2017, proceeds include $1,028 million from the Marcellus Shale upstream divestiture.
(3) For the nine months ended September 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.
(4) As of the beginning of the periods presented, includes $0 million, $0 million, $38 million and $30 million of restricted cash, respectively.
(5) Includes restricted cash of $1 million as of September 30, 2018 and none as of September 30, 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 November 1, 2018.

12


Schedule 4
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Sales Volumes
2018
 
2017
 
2018
 
2017
Crude Oil and Condensate (MBbl/d)
 
 
 
 
 
 
 
United States Onshore
109

 
93

 
106

 
86

United States Gulf of Mexico

 
21

 
7

 
22

Equatorial Guinea
13

 
13

 
15

 
18

Equity Method Investee - Equatorial Guinea
1

 
2

 
2

 
1

Total
123

 
129

 
130

 
127

Natural Gas Liquids (MBbl/d)
 
 
 
 
 
 
 
United States Onshore (1)
63

 
55

 
62

 
54

United States Gulf of Mexico

 
1

 
1

 
2

Equity Method Investee - Equatorial Guinea
5

 
7

 
5

 
6

Total
68

 
63

 
68

 
62

Natural Gas (MMcf/d)
 
 
 
 
 
 
 
United States Onshore (1)
464

 
429

 
471

 
617

United States Gulf of Mexico

 
20

 
8

 
20

Israel
241

 
283

 
242

 
276

Equatorial Guinea
217

 
246

 
216

 
240

Total
922

 
978

 
937

 
1,153

Total Sales Volumes (MBoe/d)
 
 
 
 
 
 
 
United States Onshore (1)
249

 
219

 
246

 
243

United States Gulf of Mexico

 
25

 
9

 
27

Israel
41

 
48

 
41

 
46

Equatorial Guinea
49

 
54

 
51

 
58

Equity Method Investee - Equatorial Guinea
6

 
9

 
7

 
7

Total Sales Volumes (MBoe/d)
345

 
355

 
354

 
381

 
 
 
 
 
 
 
 
Total Sales Volumes (MBoe)
31,714

 
32,634

 
96,493

 
104,104

 
 
 
 
 
 
 
 
Price Statistics - Realized Prices (2)
 
 
 
 
 
 
 
Crude Oil and Condensate ($/Bbl)
 
 
 
 
 
 
 
United States Onshore
$
65.54

 
$
46.39

 
$
63.93

 
$
46.86

United States Gulf of Mexico

 
47.73

 
64.87

 
47.89

Equatorial Guinea
73.70

 
51.32

 
71.55

 
51.29

Natural Gas Liquids ($/Bbl)
 
 
 
 
 
 
 
United States Onshore (1)
$
28.58

 
$
22.91

 
$
26.18

 
$
21.62

United States Gulf of Mexico

 
21.29

 
30.00

 
23.23

Natural Gas ($/Mcf)
 
 
 
 
 
 
 
United States Onshore (1)
$
2.31

 
$ 2.99 (3)

 
$
2.40

 
$ 3.24 (3)

United States Gulf of Mexico

 
2.70

 
3.50

 
3.18

Israel
5.49

 
5.36

 
5.48

 
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 nine months ended September 30, 2018. U.S. onshore natural gas liquids pricing is reflected lower by $2.67/Bbl and $1.61/Bbl, respectively. U.S. onshore natural gas volumes include 31 MMcf/d for both the three and nine months ended September 30, 2018. U.S. onshore natural gas pricing is reflected lower by $0.10/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.

13


(3) For three and nine months ended September 30, 2017, natural gas sales revenues includes a reduction of $31 million related to previously recorded processing fees included within in the US reportable segment. Average realized prices for three and nine months ended September 30, 2017 including the impact of the adjustment to natural gas revenue is $2.21/Mcf and $3.06/Mcf, respectively.



14


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

Adjusted net income (loss) attributable to Noble Energy and per share (Non-GAAP) should not be considered an alternative to, or more meaningful than, net income (loss) 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 net income (loss) 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 net income (loss) 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 net income (loss) attributable to Noble Energy and per share (Non-GAAP), may not be comparable to similar measures of other companies in our industry.

15


 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net Income (Loss) Attributable to Noble Energy (GAAP)
$
227

 
$
(136
)
 
$
758

 
$
(1,612
)
Adjustments to Net Income (Loss)
 
 
 
 
 
 
 
Loss on Marcellus Shale Exit Activities

 
4

 

 
2,326

Gain on Divestitures
(193
)
 

 
(859
)
 

Asset Impairments

 

 
168

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
88

 
26

 
323

 
(127
)
(Gain) Loss on Investment in Shares of Tamar Petroleum Ltd.
(15
)
 

 
25

 

Loss (Gain) on Debt Extinguishment, Net

 
98

 
(3
)
 
98

Clayton Williams Energy Acquisition Costs

 
4

 

 
98

Other Adjustments
(1
)
 
56

 
24

 
83

Total Adjustments Before Tax
(121
)
 
188

 
(322
)
 
2,478

Current Income Tax Effect of Adjustments (1)
(1
)
 
(1
)
 
93

 

Deferred Income Tax Effect of Adjustments (1)
24

 
(61
)
 
(2
)
 
(875
)
         Tax Reform Impact (2)

 

 
(145
)
 

Adjusted Net Income (Loss) Attributable to Noble Energy (Non-GAAP)
129

 
(10
)
 
382

 
(9
)
 
 
 
 
 
 
 
 
Net Income (Loss) Attributable to Noble Energy Per Share, Basic and Diluted (GAAP)
$
0.47

 
$
(0.28
)
 
$
1.57

 
$
(3.47
)
Loss on Marcellus Shale Exit Activities


0.01




5.01

Gain on Divestitures
(0.40
)
 

 
(1.77
)
 

Asset Impairments

 

 
0.35

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
0.18

 
0.05

 
0.66

 
(0.27
)
(Gain) Loss on Investment in Shares of Tamar Petroleum Ltd.
(0.03
)
 

 
0.05

 

Loss (Gain) on Debt Extinguishment, Net

 
0.20

 
(0.01
)
 
0.21

Clayton Williams Energy Acquisition Costs

 
0.01

 

 
0.21

Other Adjustments

 
0.12

 
0.05

 
0.18

Current Income Tax Effect of Adjustments (1)

 

 
0.19

 

Deferred Income Tax Effect of Adjustments (1)
0.05

 
(0.13
)
 

 
(1.89
)
         Tax Reform Impact (2)

 

 
(0.30
)
 

Adjusted Income (Loss) Attributable to Noble Energy per Share, Diluted (Non-GAAP)
$
0.27

 
$
(0.02
)
 
$
0.79

 
$
(0.02
)
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding, Basic
482

 
487

 
484

 
464

Incremental Dilutive Shares
2

 

 
2

 

Weighted Average Number of Shares Outstanding, Diluted
484

 
487

 
486

 
464


(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 third quarter 2018.


16


Schedule 6
Noble Energy, Inc.
Reconciliation of Net Income (Loss) Including Noncontrolling Interests (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 income (loss) including noncontrolling interests (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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net Income (Loss) Including Noncontrolling Interests (GAAP)
$
248

 
$
(115
)
 
$
816

 
$
(1,566
)
Adjustments to Net Income (Loss), After Tax (1)
(98
)
 
126

 
(376
)
 
1,603

Depreciation, Depletion, and Amortization
485

 
523

 
1,418

 
1,554

Exploration Expense (2)
25

 
31

 
89

 
85

Interest, Net of Amount Capitalized
70

 
88

 
216

 
271

Current Income Tax Expense (3)
46

 
23

 
85

 
71

Deferred Income Tax (Benefit) Expense (3)
(10
)
 
(54
)
 
13

 
(113
)
Adjusted EBITDAX (Non-GAAP)
$
766

 
$
622

 
$
2,261

 
$
1,905


(1) See Schedule 5: Reconciliation of Net Income (Loss) Attributable to Noble Energy (GAAP) to Adjusted Income (Loss) 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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Organic Capital Expenditures, Attributable to Noble Energy (Accrual Based) (1)
$
716

 
$
633

 
$
2,350

 
$
1,901

Acquisition Capital Attributable to Noble Energy
8

 
(12
)
 
21

 
2,806

NBLX Capital Expenditures (2)
40

 
59

 
463

 
165

Increase in Capital Lease Obligations
9

 

 
9

 

Total Reported Capital Expenditures (Accrual Based)
$
773

 
$
680

 
$
2,843

 
$
4,872


(1) Organic Capital Expenditures include $29 million, $37 million, $222 million and $94 million for midstream capital not funded by NBLX for the periods presented.
(2) NBLX Capital Expenditures for the nine months ended September 30, 2018 includes $206 million related to the acquisition of Saddle Butte Rockies Midstream, LLC.








17
nbl20180930supex992
Third Quarter Supplement November 2018


 
3Q Key Highlights www.nblenergy.com NYSE: NBL Strong operational performance and advancing shareholder return initiatives Strong natural gas demand drove Record USO liquids volumes record sales volumes of $103 MM 172 MBbl/d directed to NBL stock repurchase ~1.1 Bcfe/d program; $233 MM repurchased in led by Delaware and DJ Basin growth gross, from Israel 2018 YTD Operating cash flow Financial liquidity at end of 3Q of Announced acquisition of Up Nearly 30% $4.7 B 10% interest 3Q18 vs. 3Q17 driven by improved oil including $4 B undrawn credit facility (indirect) in EMG Pipeline, providing access for price, portfolio optimization and lower and $720 MM cash Tamar and Leviathan exports to Egypt expenses 2


 
3Q18 Actuals vs. Guidance www.nblenergy.com NYSE: NBL Volumes at high end with capex and total operating expenses at low end Financial & Operating Metrics 3Q Guidance 3Q Actuals Adjusted Net Income 3Q ($MM) Total Sales Volumes (MBoe/d) 335 – 345 345 Net Income Attributable to NBL (GAAP) 227 Oil (MBbl/d) 125 – 132 123 Adjustments to Net Income, Before Tax (121) Natural Gas Liquids (MBbl/d) 59 – 64 68 Adjusted Net Income attributable to NBL, Before Tax 106 Natural Gas (MMcf/d) 880 – 910 922 Current Income Tax Effect of Adjustments (1) Organic Capital(1) ($MM) 700 – 775 716 Deferred Income Tax Effect of Adjustments 24 Lease Operating ($/BOE) 3.90 – 4.30 3.91 Adjusted Net Income Attributable to NBL(2) (Non-GAAP) 129 Gathering, Transportation & Processing ($/BOE) 3.10 – 3.40 3.06 Adjusted EBITDAX 3Q ($MM) Production Taxes (% Oil, NGL, Gas Revenues) 4.6 – 5.0 4.1 Net Income Including Noncontrolling Interest(GAAP) 248 DD&A ($/BOE) 15.25 – 16.25 15.29 Adjustments to Net Income, After Tax (98) Marketing ($MM) 8 – 12 11 DD&A 485 Exploration ($MM) 30 – 50 25 G&A ($MM) 100 – 110 107 Exploration 25 Interest, net ($MM) 70 – 80 70 Interest, net 70 Equity Investment Income ($MM) 30 – 45 44 Current Income Tax Expense, Adjusted 46 Midstream Services Revenue – Third Party ($MM) 10 – 20 21 Deferred Income Tax Benefit, Adjusted (10) Noncontrolling Interest – NBLX Public Unitholders ($MM) 15 – 25 21 Adjusted EBITDAX(2) (Non-GAAP) 766 (1) Includes only NBL-funded organic capital expenditures. (2) Non-GAAP reconciliation to GAAP measure available in 3Q18 earnings release. 3


 
3Q18 Portfolio Summary www.nblenergy.com NYSE: NBL Advancing developments for sustained value creation U.S. Onshore: Extensive High-margin, High-return Inventory in Liquids-rich, Low-cost Basins Eastern Mediterranean • Progressing Mustang IDP development in DJ Basin, gas 3Q18 Sales Volumes: 242 MMcfe/d processing diversification supporting volume growth 3Q18 Realized Gas Price(1): $5.49/Mcf DJ Basin • Transitioned to row development in Delaware Basin, driving Israel operating efficiencies Delaware Eagle Ford • Strong cash flow contribution from the Eagle Ford U.S. Onshore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Q18 Sales Volumes: 249 MBoe/d Equatorial Guinea Eastern Mediterranean: World-class Assets in 3Q18 Realized Oil Price(1): $65.54/Bbl Undersupplied Regional Market West Africa • Leviathan ~67% complete, on track for first gas sales by YE19 3Q18 Sales Volumes: 55 MBoe/d • ~1 Bcfe/d record sales volumes in 3Q18 from Israel demand 3Q18 Realized Oil Price(1): $73.70/Bbl • Egypt pipeline agreements further solidify robust cash flow outlook 3Q18 Capital Expenditures(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $716 MM West Africa: Cash Flow Generation USO: $505 MM • Brent-linked oil and strong global methanol pricing driving substantial cash flow from West Africa EMed: $172 MM • Progressing high-return Alen gas monetization towards Midstream: $29 MM sanction early 2019 Other: $10 MM (1) Average realized prices do not include impacts of hedges. (2) Includes only NBL-funded organic capital expenditures. 4


 
DJ Basin www.nblenergy.com NYSE: NBL Strong delivery, positioned for inflection in 2019 CO Continued Volume Growth, up 7% vs 3Q17(1) DJ Basin Activity 3Q18 • Operated 2 rigs and 3 frac crews in 3Q Oil (MBbl/d) 61 Weld (1) • Substantial volume ramp through 3Q18 from Mustang IDP NGL (MBbl/d) 26 East Pony (1) • NGL and natural gas volumes driven by incremental gas Gas (MMcf/d) 235 (1) processing and high GOR Bronco wells Total Sales (MBoe/d) 126 Wells Ranch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operated Rigs 2 (2) Material Gas Processing Expansion Ongoing Wells Drilled 28 Wells Completed(2) 24 Mustang • NBL benefits by gas processing diversification and protected Wells Brought Online(2) 37 through compression NBL Acreage Municipalities Avg. Lateral Length (ft) 10,275 GOR: Low Mid High • Discovery plant expected online in 4Q18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) MBoe/d DJ Basin Net Production MBbl/d Anticipate Continued Volume Growth in 4Q18 Despite 130 Volumes up 7% 3Q18 vs. 3Q17 70 Non-core Acreage Divestment 120 65 110 60 • ~25 wells planned to come online in Wells Ranch 100 55 • ~4 MBoe/d divested late 3Q18 with Greeley Crescent 2nd 90 50 close 3Q16 3Q17 3Q18 Total Oil (1) Pro-forma for divestitures and reflects the current presentation of sales volumes, post-implementation of ASC 606 accounting standard. (2) Represents NBL operated activity. 5


 
DJ Basin Activity www.nblenergy.com NYSE: NBL Robust new well performance Substantial Volume Growth from Initial Row in Mustang MBoe/d Strong Results from Mustang Row Development 30 cum. 30 wells online • Total 31 wells online testing multiple completion designs 20 cum. to maximize returns and value 20 wells online 10 cum. • Significant growth throughout 3Q after moderated initial 10 wells online ramp in July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 7/1 7/16 7/31 8/15 8/30 9/14 9/29 10/14 Mustang Infrastructure Maximizing Gas Processing Gross 3-Stream Production Flexibility NBL Acreage Mustang IDP Development • Diversified processing capacity across 3 providers with wells online in lower GOR 31 Row 1; 10,555 ft. avg. lateral multiple offload points Bronco DP • Well positioned to benefit from near-term processing MBoe/d current gross rate expansions 27 60+% oil mix; avg. 98% WI Mustang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bronco Development Strong Well Performance from Enhanced Completions wells online in high GOR area, in Bronco Area Row 1: 10 9,520 ft. avg. lateral 2018 • Tested up to 1,800 lbs/ft in high GOR area, wells MBoe/d gross after 70 days performing above expectations 11 online, ~35% oil mix; 92% WI 6


 
Delaware Basin www.nblenergy.com NYSE: NBL 115% production growth year-over-year TX Solid Operations in 3Q with Sales Volumes of 58 MBoe/d Delaware Activity 3Q18 Reeves Ward • Continued strong volume growth, up 11 MBoe/d from 2Q18 Oil (MBbl/d) 38 • Oil volumes up 15% 3Q18 vs. 2Q18 NGL (MBbl/d) 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gas (MMcf/d) 52 Transitioned to Row Development Total Sales (MBoe/d) 58 Operated Rigs 6 • Currently operating 6 rigs and 1 frac crew, anticipate 10-15 (1) wells to come online in 4Q Wells Drilled 21 Wells Completed(1) 22 • Focusing row development around CGFs, primarily in (1) Pecos Wolfcamp A and Third Bone Spring zones Wells Brought Online 20 Avg. Lateral Length (ft) 7,420 NBL Acreage • Anticipate adding completion activity early in 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delaware Basin Net Production MBoe/d Volumes more than doubled 3Q18 vs. 3Q17 Early Crude Service from EPIC NGL Pipeline Anticipated 60 in 3Q19; Providing Access to Gulf Coast Markets 45 • Timing coincides with row development 30 • 85 MBbl/d capacity for interim crude service, 100 MBbl/d 15 capacity on EPIC Oil Pipeline 0 3Q16 (2) 3Q17 3Q18 Total Oil (MBbl/d) (1) Represents NBL operated activity. (2) Includes impact of CWEI acquisition which closed in 3Q17. 7


 
Noble Midstream (NBLX) www.nblenergy.com NYSE: NBL Peer-leading distribution growth and growing third-party services 20% 225 22% 2.1x targeted MBoe/d record increase in fresh water distribution coverage annual distribution gathered quarterly oil delivery volumes with a strong growth and gas volumes in 3Q vs. 2Q balance sheet Delaware Basin Highlights DJ Basin Highlights • Oil and Gas Gathering Throughput Increased 63% Over 2Q • Combined NBL and Third-party Oil and Gas Gathering . Gathering substantially all NBL new wells with all 5 Throughput up 9% over 2Q CGFs operational . Reflects additional basin gas processing and gas offload capacity Strong Average CGF Availability of 98% During 3Q • • Growing Contribution from Mustang IDP Oil, Gas and Produced Water Gathering • Advantage Pipeline Capacity Expansion to 200 MBbl/d from . Fresh water infrastructure for row 2 development 150 MBbl/d Completed in July completed during 2Q • LOI with Salt Creek Midstream, LLC (“SCM”) for JV • Strong Growth at Black Diamond Gathering development of crude oil gathering and transportation . 3Q18 throughput up 23% over 2Q18 and 29% from system time of acquisition close • Will enhance customer market optionality with route to Wink 8


 
Eastern Mediterranean www.nblenergy.com NYSE: NBL Growing natural gas demand and increasing cash flows Aphrodite Tamar Record Gross Sales Volumes 1,090 MMcfe/d; Net 242 MMcfe/d 35% WI 25% WI • Driven by strong electricity demand and coal displacement Leviathan 39.7% WI Dor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tamar SW 25% WI Leviathan 67% Complete, Remains on Budget and On Schedule Tel Aviv NBL Interests for First Gas Sales by YE19 Producing Discovery Ashdod • Recent milestones: Field Development Existing Pipeline • Finished 2 well completions, flow tests confirm deliverability Planned Pipeline Israel Egypt • Completed installation of subsea trees Israel Gross Production • Completed floating of the main deck MMcfe/d All-time Record in 3Q18 1,090 MMcfe/d 1,200 • Upcoming key milestones before YE18: 1,000 • Finish all well completions and flowline installation 800 • Complete jacket fabrication and sail-away 600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 Completed Required Tamar Sell-down, $10.3 B Tamar Valuation 200 3Q13 3Q14 3Q15 3Q16 3Q17 3Q18 9


 
EMed Regional Update www.nblenergy.com NYSE: NBL Multiple pathways to deliver Tamar and Leviathan natural gas exports to Egypt EMG Pipeline Agreements – Low Cost Access to Growing INGL Pipelines Regional Demand Via Existing Infrastructure Under Construction INGL Arab Gas Pipeline • 90-km 26” offshore pipeline with ~700 MMcf/d capacity, assessing Under Construction Arab Gas Pipeline expansion capability EGAS Pipelines EMG Pipeline • Technical evaluation and flow reversal underway Aqaba-El Arish Pipeline • NBL and partners secure operatorship and full capacity at closing • ~$200 MM net acquisition costs (10% indirect NBL interest) including EMG Pipeline pipeline reversal work, payable at closing anticipated early 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anticipate Closing EMG Transaction in 1H19 • Closing contingent upon confirmed Tamar gas flow Israel • At least 350 MMcf/d firm when Leviathan commences in late 2019 Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aqaba-El Arish Jordan Aqaba-El Arish Agreement Provides for Additional Pipeline Pipeline Route Within Egypt • LOI to transport gas will provide incremental capacity to sell gas 10


 
Exploration Program www.nblenergy.com NYSE: NBL Materially enhanced, high-quality portfolio with 1-2 drilling prospects anticipated per year Exploration Resource Eastern Mediterranean BBoe Portfolio • ~470 K gross acres 4 • 25-40% WI, NBL operated • Deep oil potential 3 Newfoundland 2 New Ventures • ~2.3 MM gross acres Captured >100 K acres with • • 25% WI, non-operated substantial resource 1 potential in U.S. onshore • Interpretation / (low cost entry / high liquids maturation of prospects prospectivity) 0 Net Net Potential Unrisked Risked Tested in • Signed agreement for Gabon Resources Resources 2019-2020 operatorship of >2 MM gross • ~670 K gross acres acres in new country • 60% WI, NBL operated offshore • Processing 3D seismic 11


 
www.nblenergy.com NYSE: NBL Fourth Quarter 2018 Guidance Crude Oil and Natural Gas Liquids Natural Gas Total Equivalent 4Q 2018 Sales Volume Condensate (MBbl/d) (MBbl/d) (MMcf/d) (MBoe/d) Low High Low High Low High Low High United States Onshore(1) 109 119 52 57 455 485 242 252 Israel - - - - 220 240 37 40 Equatorial Guinea 15 20 - - 185 205 47 54 Equatorial Guinea - Equity method investment 1 2 5 5 - - 6 7 Total Company 127 139 57 62 880 910 337 349 Capital & Cost Metrics Capital Expenditures(2) ($MM) Total Company Organic Capital $625 - $700 Cost Metrics LOW HIGH Lease Operating Expense(3) ($/BOE) 4.60 5.10 Gathering, Transportation & Processing ($/BOE) 3.20 3.50 Production Taxes (% Oil, Gas, NGL Revenues) 4.6 5.0 Marketing ($MM) 8 12 DD&A(3) ($/BOE) 15.25 16.25 Exploration ($MM) 40 60 G&A ($MM) 110 120 Interest, net ($MM) 65 75 Other Guidance Items ($MM) Equity Investment Income 30 45 Midstream Services Revenue – Third Party 18 28 Non-Controlling Interest – NBLX Public Unitholders 18 28 (1) Reflects 4 MBoe/d reduction from Greeley Crescent divestiture in the DJ Basin, closed in September of 2018. (2) Includes only NBL-funded portion of midstream capital expenditures. (3) Reflects lifting schedule in Equatorial Guinea. 12


 
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", "estimates", "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, quarterly report on Form 10-Q, 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. The SEC requires oil and gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The SEC permits the optional disclosure of probable and possible reserves, however, we have not disclosed our probable and possible reserves in our filings with the SEC. We may use certain terms in this presentation, such as “net unrisked resources”, which by their nature are more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent Form 10-K and in other reports on file with the SEC, available from Noble Energy’s offices or website, http://www.nblenergy.com. 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. 13


 
Investor Relations Contacts Brad Whitmarsh Park Carrere Megan Dolezal 281.943.1670 281.872.3208 281.943.1861 brad.whitmarsh@nblenergy.com park.carrere@nblenergy.com megan.dolezal@nblenergy.com Visit us on the Investor Relations Homepage at www.nblenergy.com