Document
false0000072207 0000072207 2020-04-20 2020-04-20


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): April 20, 2020

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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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.01 par value
 
NBL
 
The Nasdaq Stock Market LLC
 
 
 
 
(NASDAQ Global Select Market)
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
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.






Item 2.02. Results of Operations and Financial Condition
Noble Energy, Inc. and its subsidiaries (the "Company") present in this Item 2.02 certain information regarding commodity price realizations and changes in the fair value of its derivative instruments for the fiscal quarter ended March 31, 2020. Additionally, this Item 2.02 includes the Company's forward open hedge positions updated as of April 17, 2020. The Company has not yet completed its quarter-end financial close process for the quarter ended March 31, 2020. These estimates of the Company's commodity price realizations, changes in fair value of its derivative instruments and open hedge positions are subject to change upon completion of the Company's financial statement closing procedures.
In accordance with General Instruction B.2. of Form 8-K, the information set forth herein is deemed "furnished" and shall not be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Commodity Price Realizations
The following table outlines the Company's anticipated regional oil, natural gas liquids and natural gas pricing for the three months ended March 31, 2020, which does not include the impacts of hedges settled in the period.
Average Realized Sales Prices 
Three Months Ended March 31, 2020
Crude Oil and Condensate ($/Bbl)
 
United States Onshore
$
46.10

Equatorial Guinea
47.35

Natural Gas Liquids ($/Bbl)
 
United States Onshore
$
10.30

Natural Gas ($/Mcf)
 
United States Onshore
$
1.27

Israel
5.36

Equatorial Guinea
0.27

Derivative Instruments and Hedging Activities
The following table summarizes the gain on commodity derivative instruments the Company expects to report for the three months ended March 31, 2020.
(millions)
Three Months Ended March 31, 2020
Cash (Received) Paid in Settlement of Commodity Derivative Instruments
 
Crude Oil (1)
$
(210
)
NGL

Natural Gas
2

Total Cash Received in Settlement of Commodity Derivative Instruments
(208
)
Non-cash Portion of (Gain) Loss on Commodity Derivative Instruments
 
Crude Oil
(187
)
NGL
(10
)
Natural Gas
16

Total Non-cash Portion of Gain on Commodity Derivative Instruments
(181
)
(Gain) Loss on Commodity Derivative Instruments
 
Crude Oil
(397
)
NGL
(10
)
Natural Gas
18

Total Gain on Commodity Derivative Instruments
$
(389
)
(1) 
During first quarter 2020, we monetized certain crude oil derivative instruments by settling the instruments prior to their original settlement dates and entered into certain new instruments for the remainder of the year. Net cash received in the first quarter for these transactions was $145 million.






Open Derivative Positions
The following table summarizes the Company's open crude oil derivative positions as of April 17, 2020:
 
 
 
 
 
Swaps
 
Collars
Settlement Month
Settlement
Year
Type of Contract
Index
Bbls Per Day
Weighted Average Differential
Weighted Average Fixed Price
 
Weighted Average Short Put Price
Weighted Average Floor Price
Weighted Average Ceiling Price
Apr-Jun
2020
Swaps
NYMEX WTI
120,500
$

$
35.85

 
$

$

$

Jul-Sep
2020
Swaps
NYMEX WTI
37,500

36.80

 



Oct-Dec
2020
Swaps
NYMEX WTI
14,500

51.91

 



Jul-Dec
2020
Three-Way Collars
NYMEX WTI
53,000


 
10.00

25.00

37.20

Jul-Dec
2020
Sold Call Swaptions
NYMEX WTI
11,000

58.95

 



Apr-Dec
2020
Sold Calls
NYMEX WTI
8,000

65.59

 



Apr
2020
Basis Swaps
Midland (1)
15,000
(5.01
)

 



May-Sep
2020
Basis Swaps
Midland (1)
27,000
(4.03
)

 



Oct-Dec
2020
Basis Swaps
Midland (1)
22,000
(4.21
)

 



May-Jun
2020
Basis Swaps
WTI Roll (2)
96,000
(2.63
)

 



Jul-Sep
2020
Basis Swaps
WTI Roll (2)
78,000
(2.28
)

 



Oct-Dec
2020
Basis Swaps
WTI Roll (2)
64,000
(2.19
)

 



(1) 
We entered into crude oil basis swap contracts in order to fix the differential between pricing in Midland, Texas, and Cushing, Oklahoma. The weighted average differential represents the amount of reduction to Cushing, Oklahoma prices for the notional volumes covered by the basis swap contracts.
(2) 
Represents the value differential associated with NYMEX futures delivery months and prompt month physical delivery.

The following table summarizes the Company's open NGL derivative positions as of April 17, 2020:
 
 
 
 
 
 
Swaps
Settlement Month
Settlement Year
Type of Contract
Index
Bbls per Day
 
Weighted Average Fixed Price
Apr-Sep
2020
Ethane Swaps
Mont Belvieu
2,000
 
$
7.77

Apr-Sep
2020
Propane Swaps
Mont Belvieu
5,000
 
21.04

Apr-Sep
2020
Isobutane Swaps
Mont Belvieu
1,000
 
25.36

Apr-Sep
2020
Butane Swaps
Mont Belvieu
1,500
 
24.31






The following table summarizes the Company's open natural gas derivative positions as of April 17, 2020:
 
 
 
 
 
Swaps
 
Collars
Settlement Month
Settlement Year
Type of Contract
Index
MMBtu Per Day
Weighted Average Differential
Weighted Average Fixed Price
 
Weighted Average Short Put Price
Weighted Average Floor Price
Weighted Average Ceiling Price
Apr-Dec
2020
Swaps
NYMEX HH
90,000

$

$
2.60

 
$

$

$

Apr-Dec
2020
Sold Puts
NYMEX HH
90,000



 
2.15



Apr-Oct
2020
Three-Way Collars
NYMEX HH
40,000



 
2.25

2.70

2.85

Jan-Dec
2020
Basis Swaps
CIG (1)
139,000

(0.56
)

 



Jan-Dec
2020
Basis Swaps
WAHA (1)
49,500

(1.05
)

 



Jan-Dec
2021
Swaps
NYMEX HH
70,000


2.42

 



Jan-Dec
2021
Sold Call Swaptions
NYMEX HH
70,000


2.42

 



Jan-Dec
2021
Three-Way Collars
NYMEX HH
62,000



 
1.90

2.40

2.88

Jan-Dec
2021
Basis Swaps
CIG (1)
60,000

(0.52
)

 



Jan-Dec
2021
Basis Swaps
WAHA (1)
32,000

(0.71
)

 



(1) 
These contracts establish a fixed amount for the differential between index pricing for Colorado Interstate Gas (CIG) and Waha Hub versus NYMEX Henry Hub (HH). The weighted average differential represents the amount of reduction to NYMEX HH prices for the notional volumes covered by the basis swap contracts.

Cautionary Statement Concerning Forward-Looking Statements
This Report 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, developments in the COVID-19 pandemic and the resulting impact on our business and operations, future financial and operating results, future disclosures of historical 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 Report 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, 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. 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.










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:
April 20, 2020
 
 
By: 
/s/ Kenneth M. Fisher
 
 
 
 
 
Kenneth Fisher
 
 
 
 
 
Executive Vice President, Chief Financial Officer