Noble Energy Inc.
Feb 13, 2017

Noble Energy Announces Fourth Quarter And Year-End 2016 Results

HOUSTON, Feb. 13, 2017 (GLOBE NEWSWIRE) -- Noble Energy, Inc. (NYSE:NBL) ("Noble Energy" or "the Company") announced today results for the fourth quarter of 2016, including a reported net loss attributable to Noble Energy of $252 million, or $0.59 per diluted share.  The adjusted income(1) attributable to Noble Energy for the quarter was $113 million, or $0.26 per diluted share, which excludes the impact of certain items typically not considered by analysts in formulating estimates.  Adjusted EBITDAX(1) was $706 million

Total Company sales volumes for the fourth quarter of 2016 were 410 thousand barrels of oil equivalent per day (MBoe/d).  Liquids comprised 46 percent (32 percent crude oil and condensate and 14 percent natural gas liquids) of fourth quarter 2016 volumes, with natural gas the remaining 54 percent.  Total Company oil volumes were above expectations at 131 thousand barrels of oil per day (MBbl/d), with the outperformance driven by the DJ Basin and Gulf of Mexico.  U.S. sales volumes for the quarter totaled 287 MBoe/d, while International sales volumes were 123 MBoe/d.  Total sales volumes were higher than produced volumes by 4 MBbl/d due to the timing of liquids liftings in Equatorial Guinea. 

David L. Stover, Noble Energy's Chairman, President and CEO, commented, "2016 was an impactful year for Noble Energy, highlighted by strong operational and financial performance and importantly, strategic portfolio accomplishments that generate substantial long-term value.  The fourth quarter was no exception, with the dissolution of our Marcellus joint venture and the announcement of a bolt-on acreage addition in the Delaware Basin.  Fourth quarter volumes were at the high end of expectations while production expenses were below.  In total, we outperformed our original 2016 plans by 10 million barrels of oil equivalent, with significantly less capital.  We are positioned for a tremendous year in 2017 as we accelerate U.S. onshore activity and move forward with the development of Leviathan."

Full Year 2016 Highlights:

Fourth quarter lease operating expenses (LOE) were significantly lower than expectation at $3.44 per barrel of oil equivalent (BOE), a reduction of 9 percent compared to the fourth quarter of 2015.  This was led by lower unit LOE costs within the Gulf of Mexico and DJ Basin.  Transportation and gathering expenses totaled $3.41 per BOE, reflecting higher oil volumes transported through pipelines in the DJ Basin, which also contributed to a lower oil differential in the quarter.  Depreciation, depletion and amortization expenses for the quarter were $15.78 per BOE, down as a result of significant reserve additions in U.S. onshore areas.  General and Administrative costs for the quarter were $106 million.  Production taxes in the fourth quarter of 2016 were below expectations due to an adjustment to accruals for ad valorem and severance taxes.

The tax provision for the fourth quarter includes a large deferred tax benefit as a result of certain non-cash impairments and lower future corporate tax rate in Israel, and a true-up for full year tax rate. 

Fourth quarter adjustments to net loss attributable to Noble Energy included an accounting gain from the divestiture of a 3.5 percent working interest in the producing Tamar asset in Israel.  The Company also recorded non-cash impairments of $484 million, which were primarily related to certain West Africa exploration costs recorded to dry hole expenses.  In addition, approximately $92 million was impaired primarily for alternative development concept costs for Leviathan which are no longer part of the Company's plan. The Company also had unrealized commodity derivative losses of $201 million, resulting from the value change of existing crude oil and natural gas hedge positions. 

OPERATIONS UPDATE

DJ BASIN
Sales volumes averaged 112 MBoe/d in the fourth quarter of 2016.  Liquids represented 68 percent of DJ Basin volumes (50 percent crude oil and condensate and 18 percent NGLs) and 32 percent was natural gas.  Horizontal production totaled 94 MBoe/d.  Combined volumes for Wells Ranch and East Pony averaged 60 MBoe/d during the quarter. 

Highlights include:

DELAWARE BASIN
Sales volumes for the fourth quarter averaged 10 MBoe/d, an increase of 23 percent versus the fourth quarter of 2015.  Liquids represented 83 percent of the total (crude oil and condensate represented 64 percent and NGLs were 19 percent), while natural gas accounted for 17 percent. 

Highlights include:

EAGLE FORD
Sales volumes averaged 46 MBoe/d during the fourth quarter.  Liquids represented 59 percent of the total (crude oil and condensate represented 19 percent and NGLs were 40 percent), while natural gas accounted for 41 percent.  Production during the quarter was impacted by an in-field gathering pipeline mechanical issue leading to approximately 3 MBoe/d of curtailments on average during the quarter.

Highlights include:

MARCELLUS SHALE
Sales volumes in the Marcellus Shale averaged 500 million cubic feet of natural gas equivalent per day (MMcfe/d) in the fourth quarter of 2016.  Natural gas represented 89 percent of the volumes sold, with the majority of the remainder composed of NGLs.

Highlights include:

GULF OF MEXICO
In the Gulf of Mexico, sales volumes averaged 33 MBoe/d, a 46 percent increase versus the same quarter of last year.  Sales volumes for the quarter benefitted from oil royalty relief booked for the Big Bend field which added 3 MBbl/d on average.  Crude oil and condensate represented 85 percent of fourth quarter 2016 volumes, while two percent was NGLs and 13 percent was natural gas.

Highlights include:

WEST AFRICA
Sales volumes in West Africa averaged 77 MBoe/d, which was 38 percent crude oil and condensate, eight percent NGLs, and 54 percent natural gas.  Sales volumes for the quarter exceeded production volumes by approximately 4 MBbl/d as a result of the timing of liquids lifting from the Alen and Alba fields. 

Highlights include:

EASTERN MEDITERRANEAN
Israel sales volumes averaged 274 MMcfe/d, an increase of approximately 10 percent versus the fourth quarter of last year and a record fourth quarter for the Company, driven by strong demand from industrial customers and displacement of coal to natural gas in Israel's power generation sector.

Highlights include:

EXPLORATION
In the fourth quarter, the company added a non-operated working interest in four exploration parcels offshore Newfoundland, Canada.  The net position totals nearly 700,000 acres in the Labrador Sea.  The Company expects to focus on seismic acquisition and evaluation over the next three to five years.

PROVED RESERVES
Estimated reserves at year-end 2016 were 1.4 billion barrels of oil equivalent, up one percent from 2015 year-end.  The Company had total organic reserves additions, including extensions, discoveries and performance revisions, of 296 MMBoe.  Compared to 2016 production of 154 MMBoe during the year, the Company's organic reserves replacement was over 190 percent.  Organic reserve replacement costs, including additions and performance revisions, were $4.86 per barrel of oil equivalent.  Reserves in the U.S., including Gulf of Mexico, were 68 percent of the Company's total, with assets in Equatorial Guinea and Israel making up the remaining 32 percent.  The composition of reserves at the end of 2016 is 38 percent liquids, 29 percent international natural gas and 33 percent U.S. natural gas.

U.S. onshore reserve replacement, excluding acquisition and commodity price revisions, was 2.8 times production, reflecting improved well performance in all business units and increased activity.  The Company executed several asset sales in 2016, including the divestment of working interest in Tamar, the separation of the JV in the Marcellus and the Greeley Crescent acreage sale in the DJ Basin.  The net of these activities resulted in a reduction of 73 MMBoe of proved reserves.

The Company transferred 35 percent of proved undeveloped reserves to proved developed producing reserves in 2016.  Proved developed reserves represent approximately 66 percent of total proved reserves at the end of the year. 

(1) A Non-GAAP measure, see attached Reconciliation Schedules

WEBCAST AND CONFERENCE CALL INFORMATION

Noble Energy, Inc. will host a live audio webcast at 8:00 a.m. Central time tomorrow, February 14, 2017.  The webcast link is accessible on the ‘Investors' page at www.nobleenergyinc.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: 888-599-4875

Int'l Toll call: 913-312-1451

Conference ID: 9151353

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 spanning three continents.  Founded more than 80 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.nobleenergyinc.com.

This news release contains certain "forward-looking statements" within the meaning of federal securities law.  Words such as "anticipates", "believes", "expects", "intends", "will", "should", "may", "estimates", 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.  They may include estimates of oil and natural gas reserves, 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.  These risks 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 business that are discussed in its most recent annual report on Form 10-K and in other reports on file with the Securities and Exchange Commission ("SEC"). These reports are also available from Noble Energy's offices or website, http://www.nobleenergyinc.com.  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 forward-looking statements should circumstances, management's estimates, or opinions change.

This news release 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 news release and the most directly comparable GAAP financial measures.

The Securities and Exchange Commission 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 the Company's probable and possible reserves in our filings with the SEC. We use certain terms in this news release, such as "type curve" or "MMBoe type curve", which are by their nature 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 annual report on Form 10-K and in other reports on file with the SEC, available from Noble Energy's offices or website, http://www.nobleenergyinc.com.  

 
Schedule 1
Noble Energy, Inc.
Summary Statement of Operations
(in millions, except per share amounts, unaudited)
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 2016 2015 2016 2015
Revenues       
Crude Oil and Condensate$564  $488  $1,854  $1,840 
Natural Gas323  272  1,239  1,056 
Natural Gas Liquids (1)92  70  296  197 
Income from Equity Method Investees31  30  102  90 
Total Revenues1,010  860  3,491  3,183 
Operating Expenses       
Lease Operating Expense130  146  542  563 
Production and Ad Valorem Taxes5  38  78  127 
Transportation and Gathering Expense (1)129  82  463  289 
Marketing and Processing Expense, Net17  5  75  30  
Exploration Expense549  180  925  488 
Depreciation, Depletion and Amortization595  686  2,454  2,131 
General and Administrative106  89  399  396 
Gain on Divestitures(261)   (238)  
Asset Impairments92  490  92  533 
Goodwill Impairment  779    779 
Other Operating Expense (Income), Net11  77  (3) 319 
Total Operating Expenses1,373  2,572  4,787  5,655 
Operating Loss(363) (1,712) (1,296) (2,472)
Other Expense (Income)        
Loss (Gain) on Commodity Derivative Instruments87  (170) 139  (501)
Interest, Net of Amount Capitalized86  80  328  263 
Other Non-Operating Expense (Income), Net5   5  9  (15)
Total Other Expense (Income)178  (85) 476  (253)
Loss Before Income Taxes(541) (1,627) (1,772) (2,219)
Income Tax (Benefit) Provision(301) 401  (787)  222 
Net Loss Including Noncontrolling Interests$(240) $(2,028) $(985) $(2,441)
Less: Net Income Attributable to Noncontrolling Interests (2)12    13   
Net Loss Attributable to Noble Energy$(252) $(2,028) $(998) $(2,441)
        
Net Loss Attributable to Noble Energy Per Share of Common Stock       
Loss Per Share, Basic$(0.59) $(4.73) $(2.32) $(6.07)
Loss Per Share, Diluted$(0.59) $(4.73) $(2.32) $(6.07)
        
Weighted Average Number of Shares Outstanding       
Basic430  429  430  402 
Diluted430  429  430  402 
 
(1) Certain of our revenue received from purchasers was historically presented with deductions for transportation, gathering, fractionation or processing costs. Beginning in 2016, we have changed our presentation to no longer include these expenses as deductions from revenue. These costs are now included within transportation and gathering expense and prior year amounts have been reclassified to conform to the current presentation.
 
(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 of approximately 45% 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 Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 14, 2017

On July 20, 2015, we completed the merger with Rosetta Resources Inc. (Rosetta or Rosetta Merger) and the results of operations attributable to Rosetta are included in our consolidated statement of operations beginning on July 21, 2015. The results of these operations attributable to Rosetta will affect the comparability of our financial results to prior periods. 

 
Schedule 2
Noble Energy, Inc.
Condensed Balance Sheets
(in millions, unaudited)
 
 December 31,
2016
 December 31,
2015
ASSETS   
Current Assets   
Cash and Cash Equivalents$1,180  $1,028 
Accounts Receivable, Net615  450 
Commodity Derivative Assets  582 
Other Current Assets160  216 
Total Current Assets1,955  2,276 
Net Property, Plant and Equipment18,548  21,300 
Other Noncurrent Assets508  620 
Total Assets$21,011  $24,196 
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current Liabilities   
Accounts Payable - Trade$736  $1,128 
Other Current Liabilities742  677 
Total Current Liabilities1,478  1,805 
Long-Term Debt7,011  7,976 
Deferred Income Taxes1,819  2,826 
Other Noncurrent Liabilities1,103  1,219 
Total Liabilities11,411  13,826 
Total Shareholders' Equity9,288   10,370 
Noncontrolling Interests (1)312   
Total Equity9,600  10,370 
Total Liabilities and Equity$21,011   $24,196 
 
(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 of approximately 45% 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 Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 14, 2017

 
Schedule 3
Noble Energy, Inc.
Condensed Statement of Cash Flows
(in millions, unaudited)
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 2016 2015 2016 2015
Cash Flows From Operating Activities       
Net Loss(1)$(240) $(2,028) $(985) $(2,441)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities       
Depreciation, Depletion and Amortization595  686  2,454  2,131 
Asset Impairments92  490  92  533 
Goodwill Impairment   779    779 
Dry Hole Cost(2)474  112  579  266 
Deferred Income Taxes(285) 360  (984) 116 
Loss (Gain) on Commodity Derivative Instruments87  (170) 139  (501)
Net Cash Received in Settlement of Commodity Derivative Instruments114  326  569  1,009 
Gain on Divestitures(261)   (238)   
Stock Based Compensation16  17  77  86 
Gain on Debt Extinguishment    (80)  
Other Adjustments for Noncash Items Included in Income (6) 59  188  213 
Net Changes in Working Capital(289) (55) (460) (129)
Net Cash Provided by Operating Activities297  576  1,351  2,062 
Cash Flows From Investing Activities       
Additions to Property, Plant and Equipment(377) (460) (1,541) (2,979)
Proceeds from Divestitures455    1,241  151 
Marcellus Shale Acreage Exchange Consideration(213)   (213)   
Additions to Equity Method Investments  (18) (8) (104)
Distributions from Equity Method Investments70    70   
Other20    20   61 
Net Cash Used in Investing Activities(45) (478) (431) (2,871)
Cash Flows From Financing Activities       
Dividends Paid, Common Stock(43) (77) (172) (291)
Proceeds from Issuance of Noble Energy Common Stock, Net of Offering Costs      1,112 
Proceeds from Issuance of Noble Midstream Partners Common Units, Net of Offering Costs    299   
Repayment of Noble Revolving Credit Facility      (70)
Proceeds from Term Loan Facility    1,400   
Repayment of Term Loan Facility(850)   (850)  
Repayment of Senior Notes    (1,383)  (12)
Other2  (21) (62) (85)
Net Cash (Used In) Provided by Financing Activities(891) (98) (768) 654 
(Decrease) Increase in Cash and Cash Equivalents(639)   152  (155)
Cash and Cash Equivalents at Beginning of Period1,819  1,028  1,028  1,183 
Cash and Cash Equivalents at End of Period$1,180   $1,028  $1,180  $1,028 
 
(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 twelve months ended December 31, 2016, Net Loss includes Net Income Attributable to Noncontrolling Interests in NBLX.
 
(2) Amounts include exploration impairments.
 

These financial statements should be read in conjunction with the financial statements and the accompanying notes and other information included in Noble Energy's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on February 14, 2017

On July 20, 2015, we completed the merger with Rosetta and the associated cash flows are included in our operations beginning on July 21, 2015. The results of these cash flows attributable to Rosetta will affect the comparability of our results to prior periods.

 
Schedule 4
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
Sales Volumes2016 2015 2016 2015
Crude Oil and Condensate (MBbl/d)       
United States102   100  99  81 
Equatorial Guinea27  37  26  31 
Total consolidated operations129  137  125  112 
Equity method investee - Equatorial Guinea2  1  2  2 
Total131  138  127   114 
Natural Gas Liquids (MBbl/d)       
United States50   53  54  39 
Equity method investee - Equatorial Guinea6   6  5  5 
Total56  59  59  44 
Natural Gas (MMcf/d)       
United States816  859  881  708 
Israel272  247  281  252 
Equatorial Guinea250  243  235  227 
Total1,338  1,349  1,397  1,187 
Total Sales Volumes (MBoe/d)       
United States287  295  301  237 
Israel46  42  47  42 
Equatorial Guinea69  78  65  69 
Total consolidated operations402  415  413  348 
Equity method investee - Equatorial Guinea8  7  7  7 
Total sales volumes (MBoe/d)410  422  420  355 
        
Total sales volumes (MBoe)37,726  38,821  153,540  129,625 
        
Price Statistics - Realized Prices       
Crude Oil and Condensate ($/Bbl)(1)       
United States$46.37  $37.82  $39.59  $43.46 
Equatorial Guinea51.39  41.18  43.54  48.85 
Total$47.41  $38.75  $40.39  $45.00 
Natural Gas Liquids ($/Bbl)(1)       
United States$20.04  $11.55  $14.92  $13.91 
Natural Gas ($/Mcf)(1)       
United States$2.47  $ 1.88  $2.11  $2.10 
Israel5.27  5.17  5.21  5.34 
Equatorial Guinea0.27   0.27  0.27  0.27 
Total$2.63  $2.19  $2.42  $ 2.44 
 
(1) Average realized prices do not include gains or losses on commodity derivative instruments.
 

On July 20, 2015, we completed the merger with Rosetta and the associated volumes and price statistics are included in our operations beginning on July 21, 2015. The results of these volumes and prices attributable to Rosetta will affect the comparability of our results to prior periods.

 
Schedule 5
Noble Energy, Inc.
Reconciliation of Net Loss Attributable to Noble Energy (GAAP) to
Adjusted Income (Loss) Attributable to Noble Energy (Non-GAAP)
(in millions, except per share amounts, unaudited)
 
Adjusted income (loss) attributable to Noble Energy (Non-GAAP) should not be considered an alternative to, or more meaningful than, net loss attributable to Noble Energy (GAAP) or any other measure as reported in accordance with GAAP. Our management believes, and certain investors may find, that adjusted income (loss) attributable to Noble Energy 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 (loss) attributable to Noble Energy may be useful for comparison of earnings to forecasts prepared by analysts and other third parties. However, our presentation of adjusted income (loss) attributable to Noble Energy may not be comparable to similar measures of other companies in our industry.
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 2016 2015 2016 2015
Net Loss Attributable to Noble Energy (GAAP)$(252) $(2,028) $(998) $(2,441)
Adjustments to Net Loss       
Loss on Commodity Derivative Instruments, Net of Cash Settlements201  156  708  508 
Exploration Expenses [1]484  95  591  95 
Gain on Divestitures [2](261)   (238)  
Asset Impairments [3]92  490  92  533 
Gain on Debt Extinguishment [4]    (80)  
Goodwill Impairment  779    779 
Other Adjustments [5](3) 53  59  261 
Total Adjustments Before Tax513  1,573  1,132  2,176 
Current Income Tax Effect of Adjustments [6](66) 489  45  468 
Deferred Income Tax Effect of Adjustments [6](82) 157  (427) 9 
Adjustments to Net Loss, After Tax$365  $2,219  $750   $2,653 
Adjusted Income (Loss) Attributable to Noble Energy (Non-GAAP)$113  $191  $(248) $212 
        
Net Loss Attributable to Noble Energy Per Share, Diluted (GAAP)$(0.59) $(4.73) $(2.32) $(6.07)
Adjusted Income (Loss) Attributable to Noble Energy Per Share, Diluted (Non-GAAP)$0.26  $0.44  $(0.58) $0.52 
        
Weighted Average Number of Shares Outstanding, Diluted433  431  430  405 
 
NOTE: On July 20, 2015, we completed the merger with Rosetta and the results of operations attributable to Rosetta are included in our consolidated statement of operations beginning on July 21, 2015. The results of these operations attributable to Rosetta will affect the comparability of our financial results to prior periods.
 
[1] Amount for 2016 primarily relates to certain West Africa exploration impairments, the license from our 2011 Dolphin discovery in Eastern Mediterranean, and the write-off of several leases in deepwater Gulf of Mexico and offshore Falkland Islands of $56 million and $25 million, respectively. Amount for 2015 relates to the write-off of Nevada charges.
 
[2] Amount relates primarily to the gain associated with the divestiture of 3.5% working interest in Tamar.
 
[3] Amount for 2016 primarily relates to the write-off of alternative development design costs that are not part of the Company's development plan for Leviathan. Amount for 2015 relates to Equatorial Guinea, Gulf of Mexico and Eastern Mediterranean properties.
 
[4] Amount relates to the early tendering of senior notes assumed in the Rosetta Merger.
 
[5] Amount for 2016 primarily relate to loss on asset due to terminated contract and inventory fair value write down. Amount for 2015 primarily relate to Nevada exploration expense, pension plan expense, Rosetta merger expenses, corporate restructuring and other charges.
 
[6] 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 (such as the recognition of a gain on our 3.5% Tamar divestiture in Eastern Mediterranean) and the change in the indefinite reinvestment assertion related to accumulated undistributed earnings of foreign subsidiaries.


Schedule 6
Noble Energy, Inc.
Reconciliation of Net Loss Attributable to Noble Energy (GAAP) to Adjusted Income (Loss) Attributable to Noble Energy (Non-GAAP) and 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 attributable to Noble Energy (GAAP) or any other measure as reported in accordance with GAAP. Our management believes, and certain investors may find, that Adjusted EBITDAX 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 may be useful for comparison of earnings to forecasts prepared by analysts and other third parties. However, our presentation of Adjusted EBITDAX may not be comparable to similar measures of other companies in our industry.
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 2016 2015 2016 2015
Net Loss Attributable to Noble Energy (GAAP)$(252) $(2,028) $(998) $(2,441)
Adjustments to Net Loss, After Tax [1]365  2,219  750   2,653 
Adjusted Income (Loss) Attributable to Noble Energy (Non-GAAP)113  191  (248) 212 
        
Adjustments to Adjusted Net Loss (Income) Attributable to Noble Energy       
Depreciation, Depletion, and Amortization595  686  2,454  2,131 
Exploration Expense [2]65  85  334  393 
Interest, Net of Amount Capitalized86  80  328  263 
Current Income Tax (Benefit) Expense [3]50  (447) 152  (362)
Deferred Income Tax (Benefit) Expense [3](203) 203  (557) 107 
Adjusted EBITDAX (Non-GAAP)$706  $798  $2,463  $2,744 
 
NOTE: On July 20, 2015, we completed the merger with Rosetta and the results of operations attributable to Rosetta are included in our consolidated income statement of operations beginning on July 21, 2015. The results of these operations attributable to Rosetta will affect the comparability of our financial results to prior periods.
 
[1] See Schedule 5: Reconciliation of Net Loss Attributable to Noble Energy (GAAP) to Adjusted Income (Loss) Attributable to Noble Energy (Non-GAAP) for calculation.
 
[2] Represents remaining Exploration Expense after reversal of Adjustments to Net Loss, After Tax, above.
 
[3] Represents remaining Income Taxes after reversal of Adjustments to Net Loss, After Tax, above.


Capital Expenditures
(in millions, unaudited)
 
 Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 2016 2015 2016 2015
Capital Expenditures (Accrual Based)$404  $527  $1,339   $2,852 
Marcellus Shale Acreage Exchange Consideration234    234   
Acquisition Capital      3,175 
Increase (Decrease) in Capital Lease Obligations  (5) 5  55 
Total Capital Expenditures (Accrual Based) [4]$638   $522  $1,578  $6,082 
 
[4] Includes capital expenditures from our publicly traded subsidiary, Noble Midstream Partners LP, of $50 million for full year 2016.


Schedule 7
Noble Energy, Inc.
Supplemental Data
(in millions, unaudited)
 
2016 Costs Incurred in Oil and Gas Activities United
States
 Int'l [1] Total
        
Proved property acquisition costs $  $  $ 
Unproved property acquisition costs 234    234 
Exploration costs 264  95  359 
Development costs [2] 939  140  1,079 
Total costs incurred $1,437  $235  $1,672 
       
Reconciliation to Capital Spending (accrual basis)      
Total costs incurred     $1,672 
Exploration overhead     (109)
Lease rentals      (30)
Asset retirement obligations     (18)
Total oil and gas spending     1,515 
Investment in equity method investee     8 
Other corporate capital and capital leases     55 
Total capital spending (accrual basis)      $1,578 
       
Proved Reserves [3] United
States
 Int'l [4] Total
Total Barrel Oil Equivalents (MMBoe)      
Beginning reserves - December 31, 2015 884  537  1,421 
Price-related revisions (46) (7) (53)
Other non-price-related revisions 106  11  117  
Extensions, discoveries and other additions 179    179 
Purchase of minerals in place 4    4 
Sale of minerals in place (41) (36) (77)
Production (110) (44) (154)
Ending reserves - December 31, 2016 976  461  1,437 
Proved Developed Reserves (MMBoe)      
December 31, 2015 540  396   936 
December 31, 2016 554  397  951 
 
[1] International primarily includes Israel, Equatorial Guinea, Cyprus and Falkland Islands.
 
[2] Includes ARO costs of $18 million for United States and includes capital expenditures from our publicly traded subsidiary, Noble Midstream Partners LP, of $50 million for full year 2016.
 
[3] Netherland, Sewell & Associates, Inc. performed a reserves audit for 2016 and concluded that the Company's estimates of proved reserves were, in the aggregate, reasonable and have been prepared in accordance with Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
 
[4] International includes Israel and Equatorial Guinea.


Investor Contacts

Brad Whitmarsh

(281) 943-1670

Brad.Whitmarsh@nblenergy.com



Megan Repine

(832) 639-7380

Megan.Repine@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

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