Noble Energy Inc.
NOBLE ENERGY INC (Form: 8-K, Received: 10/30/2017 16:44:30)


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): October 30, 2017

  NBLLOGOUPDATED9302014A27.JPG

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 October 30, 2017 Noble Energy, Inc. (the “Company”) issued a press release announcing results for the fiscal quarter ended September 30, 2017 . 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, 2017 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. Other Events.
On October 30, 2017 , we will present certain information in connection with our call with stockholders, analysts and others relating to our results of operations discussed above.  Attached hereto as Exhibit 99.2 are slides that will be presented at that time.
The information included in this Current Report under Item 7.01, including Exhibit 99.2, is deemed to be “furnished” and shall not be “filed” for purposes of Section 18 of the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits. The following exhibit is furnished as part of this Current Report on Form 8-K:
 
99.1
Press Release dated October 30, 3017 announcing results for the fiscal quarter ended September 30, 2017.
 
99.2
Third Quarter 2017 Supplement slide presentation.





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:
October 30, 2017
 
 
By: 
 
/s/ Kenneth M. Fisher
 
 
 
 
 
 
Kenneth M. Fisher
 
 
 
 
 
 
Executive Vice President, Chief Financial Officer





INDEX TO EXHIBITS
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
99.2
 




 
NBLLOGOUPDATED9302014A28.JPG
  
 
NEWS RELEASE
 
 
 
 
 
 
 

NOBLE ENERGY ANNOUNCES THIRD QUARTER 2017 RESULTS,
STRONG U.S. ONSHORE DELIVERY CONTINUES

Quarterly sales volumes averaged 355 MBoe/d, up 10 MBoe/d from the midpoint of the Company’s original guidance range, on capital expenditures of $633 million which were toward the lower end of expectations.
Total oil volumes of 129 MBbl/d were 5 percent higher than original 3Q expectations.
U.S. onshore oil volumes grew to a quarterly record of 93 MBbl/d, up approximately 25 percent from the third quarter of last year. Onshore operating cash flow per BOE is up approximately 50 percent over the same period.
DJ Basin well performance increased Wells Ranch and East Pony net volumes by approximately 10 percent from the second quarter of 2017 to 76 MBoe/d. Oil as a percentage of total basin volumes grew to a record 54 percent.
Commenced operation at the Company’s initial Central Gathering Facility in the Delaware Basin, Billy Miner operated by Noble Midstream Partners, with 10 wells producing through the facility as of the end of the third quarter.
Increased lateral footage drilled per rig per day in the Delaware Basin by more than 30 percent from the first of the year, setting record drill times for long, medium and short length laterals.
Established a quarterly record for gross sales volumes in Israel at 997 MMcfe/d (285 MMcfe/d net), while increasing Tamar field gross recoverable resources by 10 percent to 11 Tcfe.
Reduced future annual cash interest cost approximately $35 million by retiring $1 billion 8.25 percent bonds due 2019, utilizing proceeds from new Senior Notes issued.



1




HOUSTON (October 30, 2017) -- Noble Energy, Inc. (NYSE: NBL ) (“Noble Energy” or “the Company”) today announced results for the third quarter of 2017, including a net loss attributable to Noble Energy of $136 million, or $0.28 per diluted share. The Company reported an adjusted loss (1) and adjusted loss per share (1) attributable to Noble Energy for the quarter of $10 million, or $0.02 per diluted share, which excludes the impact of certain items typically not considered by analysts in formulating estimates. Adjusted EBITDAX (1) was $601 million for the third quarter.

David L. Stover, Noble Energy’s Chairman, President and CEO, commented, “Our strong results for the third quarter continue to reflect the Company’s high-quality assets and differentiated execution, with particularly strong performance from our U.S. onshore business. The significant value of our recent strategic portfolio repositioning is being realized as onshore cash flows and volumes grow at a rapid pace as we move towards the end of 2017. This is also reflective of industry-leading well performance in each basin and the benefits of our integrated midstream strategy through Noble Midstream Partners. With our focus on significantly improving per unit cash margins and enhancing our overall corporate returns, nearly 100 percent of our forward capital is being allocated to our three U.S. onshore plays and the Eastern Mediterranean.”

Total Company sales volumes for the third quarter of 2017 were 355 thousand barrels of oil equivalent per day (MBoe/d), up 10 MBoe/d from the midpoint of original guidance. Approximately 60 percent of the increase from original guidance is related to oil. Pro-forma for the Marcellus divestment in June 2017, third quarter sales volumes were up four percent from the second quarter of 2017 and seven percent from the third quarter of last year. Crude oil and condensate sales volumes were 129 thousand barrels per day (MBbl/d), natural gas liquids (NGLs) totaled 63 MBbl/d and natural gas contributed 978 million cubic feet per day. Heavy localized storms resulted in flash floods and the temporary shut-in of the vast majority of Eagle Ford production in late September and early October, reducing the Company’s average third quarter volumes by approximately 5 MBoe/d.

Total U.S. onshore sales volumes averaged 219 MBoe/d, up nearly eight percent from the second quarter of 2017 and 23 percent from the third quarter of 2016, pro-forma. Offshore sales volumes were 136 MBoe/d with Israel volumes setting a quarterly record and continued strong production performance in the Gulf of Mexico and West Africa.

U.S. onshore crude oil differentials were less than $2 per barrel on average below WTI, NGL pricing strengthened to represent 47 percent of WTI, and U.S. onshore natural gas pricing averaged slightly below Henry Hub. The Company’s Israel gas price averaged $5.36 per thousand cubic feet in the third quarter.

Operating expenses for the third quarter, including lease operating expenses (LOE), production taxes, and gathering, transportation and processing (GTP) expenses, were below expectations at $8.58 per barrel of oil equivalent (BOE). Lower than expected LOE was supported by further reduction of DJ Basin LOE which averaged less than $4 per BOE in the quarter. GTP expenses were approximately $30 million lower than the second quarter of 2017 primarily as a result of the removal of Marcellus costs following the divestiture. Income from equity method investees and other in the quarter totaled $53 million, benefitting from strong global methanol and liquid prices for Alba Plant volumes in EG, as well as higher than anticipated midstream income .

Adjustments to the third quarter loss attributable to Noble Energy primarily related to unrealized commodity derivative losses, debt extinguishment costs associated with the retirement of $1 billion in Senior Notes, and the write-off of costs associated with certain expiring leases in the Gulf of Mexico .

Approximately 78 percent of the Company’s capital was utilized toward U.S. onshore plays and 20 percent was spent in Israel primarily for the Leviathan development . Noble Energy ended the third quarter with $4.3 billion in total financial liquidity, comprised of cash and available credit facility capacity.

(1) A Non-GAAP measure, see attached Reconciliation Schedules
2



Outstanding Execution Driving Robust U . S . Onshore Cash Flow and Oil Volume Growth
Third quarter 2017 operating cash flow from the Company’s DJ Basin, Eagle Ford, and Delaware Basin assets increased more than 40 percent as compared to the third quarter of last year. Total sales volumes across the Company’s U.S. onshore assets were 219 MBoe/d (42 percent oil, 25 percent NGL, and 33 percent natural gas), at the high end of original guidance. Adjusting for the impact of localized rain storms in late September that affected Eagle Ford production, total onshore volumes would have been two percent above the high end of original guidance. U.S. onshore oil volumes of 93 MBbl/d were a quarterly record for the Company and were higher by eight percent from the second quarter of 2017 and more than 25 percent from the quarter one year ago, pro-forma for the Marcellus divestment .

The DJ Basin averaged 112 MBoe/d, including quarterly record oil production of 61 MBbl/d (54 percent of total basin production). Oil volumes in the DJ Basin were up more than six percent from the second quarter of 2017, driven by continued strong well performance in the Company’s Wells Ranch and East Pony areas. Production from the Eagle Ford averaged 76 MBoe/d, up 10 percent from the second quarter due to continued development of South Gates Ranch. Delaware Basin production of 27 MBoe/d was up 17 percent from the second quarter, in line with expectations. Other U.S. onshore assets contributed the remaining 4 MBoe/d.

In the DJ Basin, 32 wells commenced production during the quarter including 19 in Wells Ranch and 13 in East Pony. The average lateral length of the wells was 9,170 feet, with Wells Ranch wells utilizing a proppant concentration of 1,800 pounds per lateral foot and East Pony wells utilizing 1,000 pounds per lateral foot. The East Pony wells were essentially all located on federal acreage, which were permitted more than a year ago at lower concentrations. For the three development plan areas commencing production in Wells Ranch this year, 31 of 34 wells (10,000 foot average lateral length) have exceeded 1,000 Boe/d and each of the development plan areas is currently producing more than 10,000 Boe/d, gross.

Eight Lower Eagle Ford wells in South Gates Ranch began production during the third quarter of 2017, driving the production increase as compared to the second quarter. In the northern part of Gates Ranch, a 4-well pad commenced production in the third quarter, including two Lower Eagle Ford wells and two Upper Eagle Ford wells in co-development. The four wells averaged a 5,000 foot lateral length and each was completed with 2,500 pounds of proppant per lateral foot. Early performance of the Upper Eagle Ford wells is consistent with expectation and significantly better than historical completion designs.

The Company initiated production on 14 operated wells during the third quarter in the Company’s Delaware Basin acreage, including 12 Wolfcamp A wells, one Wolfcamp B well, and the Company’s first 3 rd Bone Spring well. Nine of the wells commenced production during the month of September.

Four wells on the Monroe unit have been on production more than 60 days. The wells include two Wolfcamp A Upper wells, one Wolfcamp A Lower, and one 3 rd Bone Spring well. The Wolfcamp A wells averaged 300 Boe/d per 1,000 lateral feet over the initial 30 days of production. Of the three Wolfcamp A wells, two were 10,000 foot laterals, and they have exhibited longer plateaus and flatter declines as expected. The 60-day production rate on the two long laterals has averaged more than 93 percent of the respective initial 30-day rate. The 3 rd Bone Spring well (10,000 foot lateral) averaged more than 2,300 Boe/d over the first 30 days and 2,100 Boe/d over 60 days of production.

The Company began production on its third operated well within the Wolfcamp B zone during the quarter. The Cole Younger 30-23 well, with a 3,800 foot lateral, was completed using 3,000 pounds of proppant per lateral foot and produced 1,680 Boe/d (75 percent oil) over the first 30 days on production.

The first Delaware Basin central gathering facility, operated by Noble Midstream Partners, began operation at the end of July. Ten wells were tied into production through the facility in the third quarter, including wells from three multi-well pads. Gross oil throughput capacity at the facility was expanded to 15 MBbl/d during the third quarter, and the facility was connected to the Advantage Pipeline (NBLX owns 50 percent) to Crane, TX.


3



The Company maintained an average of seven operated drilling rigs onshore during the third quarter (two in the DJ and five in the Delaware) . During the quarter, the Company drilled 49 wells (32 DJ, 17 Delaware) and reduced its long lateral drilling times in both basins. In the DJ Basin, the Wells Ranch AF07-631 well with a lateral length of 9,616 feet was drilled (spud to rig release) in 4 days, and in the Delaware, the Holy Mole 23-14 with a lateral length of 10,567 feet was drilled in 19 days. The improvements of three percent and 18 percent from prior records, respectively, have benefitted from the Company’s continued focus on physics-based training and application of drilling data analytics across all basins.

Record Quarterly Sales Volumes and Increased Reserves in Israel
Natural gas production in Israel averaged an all-time gross record of 997 million cubic feet of natural gas equivalent per day (MMcfe/d) during the third quarter of 2017, up slightly from the second quarter of 2017 and the third quarter of last year. Net sales volumes totaled 285 MMcfe/d. The increases were driven primarily by continued natural gas demand in power generation, despite planned maintenance at the Tamar field which was carried out in the latter part of September and early October. During the third quarter, gross natural gas sales volumes exceeded one billion cubic feet of natural gas equivalent per day for 79 days.

Noble Energy recently increased the estimate of gross recoverable resources at Tamar to 11 trillion cubic feet equivalent of natural gas. This increase of 10 percent reflects continued reservoir modeling and assessment of learnings from the Tamar-8 well drilled and completed earlier in the year. Net booked reserves for the field were increased by approximately 285 billion cubic feet equivalent of natural gas.

Project development for Leviathan is more than 23 percent complete, with all critical path equipment and major contracts secured. Construction of the production platform is underway and the project remains on budget and schedule with first gas by the end of 2019.

Continued Strong Cash Flows and Volumes from Other Offshore Assets
Sales volumes in the Gulf of Mexico were at the high end of expectations at 25 MBoe/d, with 83 percent oil contribution, reflecting continued strong field performance and facility uptime across the Company’s position. In July, the Gunflint field surpassed its one-year anniversary of first production. Also during the third quarter, the Company exceeded more than one year of offshore performance without a recordable safety incident in either production operations or at the Company’s operated facilities.

Sales volumes for West Africa were 63 MBoe/d (24 percent oil, 11 percent NGL, and 65 percent natural gas) which were less than produced volumes by 6 MBbl/d. The difference in sales and produced volumes relates to the lifting schedule for the Alba field. Better than anticipated production from the Alba field resulted from the conversion of two wells from natural gas injection to production wells during the third quarter.

UPDATED FOURTH QUARTER GUIDANCE
Total sales volumes for the fourth quarter of 2017 have been reconfirmed at a range of 380 - 390 MBoe/d, showing the Company’s asset resiliency despite the impact of early fourth quarter storms in the Gulf of Mexico and Eagle Ford areas. U.S. Onshore volumes are anticipated 15 percent higher than the third quarter of 2017, with each commodity (crude oil, NGL, and natural gas) expected higher by double-digits. U.S. Onshore oil volumes have been reconfirmed at a range of 102 to 108 MBbl/d. The oil increase is primarily a result of the Company’s Delaware Basin ramp in wells commencing production late in the third quarter and in the fourth quarter.

Offshore, expectations for volumes from Israel have been raised to reflect quicker-than-expected maintenance at the Tamar field and continued strong demand outlook. This increase mostly offsets the change in expected Gulf of Mexico oil volumes which includes the impact of Hurricane Nate and adjustments to the lifting schedule in West Africa.

Capital expenditures and the majority of cost items have been maintained as previously expected.


4



Additional details for the third quarter results and updated fourth quarter guidance can be found in the quarterly supplement on the Company’s website, www.nblenergy.com .
(1) A Non-GAAP measure, see attached Reconciliation Schedules

WEBCAST AND CONFERENCE CALL INFORMATION
Noble Energy, Inc. will host a live audio webcast and conference call at 8:00 a.m. Central Time tomorrow, October 31, 2017. The webcast link is accessible on the ‘Investors’ page at www.nblenergy.com . A replay will be available on the website. Conference call numbers for participation during the question and answer session are:

Toll free Dial in: 888-378-4361
Int’l Toll call: 719-325-4915
Conference ID: 1448951

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.nblenergy.com .

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

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

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

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


5



This news release contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates", "believes", "expects", "intends", "will", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy's current views about future events. Such forward-looking statements may include, but are not limited to, future financial and operating results, and other statements that are not historical facts, including estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations.  No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. 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 reports on Form 10-K, respectively, 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 use certain terms in this news release, such as “gross recoverable resources” 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 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 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

6



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,
 
2017
 
2016
 
2017
 
2016
Revenues
 
 
 
 
 
 
 
Crude Oil and Condensate
$
553

 
$
461

 
$
1,637

 
$
1,291

Natural Gas Liquids
116

 
74

 
329

 
204

Natural Gas
238

 
347

 
952

 
916

Income from Equity Method Investees and Other
53

 
28

 
137

 
70

Total Revenues
960

 
910

 
3,055

 
2,481

Operating Expenses
 
 
 
 
 
 
 
Lease Operating Expense
151

 
131

 
414

 
412

Production and Ad Valorem Taxes
36

 
30

 
119

 
73

Gathering, Transportation and Processing Expense (1)
93

 
121

 
333

 
354

Marketing Expense
6

 
12

 
39

 
39

Exploration Expense
64

 
125

 
136

 
376

Depreciation, Depletion and Amortization
523

 
621

 
1,554

 
1,859

General and Administrative
102

 
95

 
304

 
293

Loss on Marcellus Shale Upstream Divestiture
4

 

 
2,326

 

Other Operating (Income) Expense, Net
(21
)
 
25

 
93

 
88

Total Operating Expenses
958

 
1,160

 
5,318

 
3,494

Operating Income (Loss)
2

 
(250
)
 
(2,263
)
 
(1,013
)
Other Expense
 
 
 
 
 
 
 
Loss (Gain) on Commodity Derivative Instruments
22

 
(55
)
 
(145
)
 
53

Loss (Gain) on Extinguishment of Debt
98

 

 
98

 
(80
)
Interest, Net of Amount Capitalized
88

 
86

 
271

 
242

Other Non-Operating Expense (Income), Net
2

 
(1
)
 
(4
)
 
3

Total Other Expense
210

 
30

 
220

 
218

Loss Before Income Taxes
(208
)
 
(280
)
 
(2,483
)
 
(1,231
)
Income Tax Benefit
(93
)
 
(137
)
 
(917
)
 
(486
)
Net Loss Including Noncontrolling Interests
(115
)
 
(143
)
 
(1,566
)
 
(745
)
Less: Net Income Attributable to Noncontrolling Interests (2)
21

 
1

 
46

 
1

Net Loss Attributable to Noble Energy
$
(136
)
 
$
(144
)
 
$
(1,612
)
 
$
(746
)
 
 
 
 
 
 
 
 
Net Loss Attributable to Noble Energy Per Share of Common Stock
 
 
 
 
 
 
 
Loss Per Share, Basic and Diluted
$
(0.28
)
 
$
(0.33
)
 
$
(3.47
)
 
$
(1.73
)
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding
 
 
 
 
 
 
 
Basic and Diluted
487

 
430

 
464

 
430

(1) Certain of our processing expense was historically presented as a component of other operating expense, net, in our consolidated statements of operations. Beginning in 2017, we have changed our presentation to reflect processing expense as a component of production expense. These costs are now included within gathering, transportation and processing expense. For three and nine months ended September 30, 2017 , these costs totaled $12 million and $17 million respectively. For three and nine months ended September 30, 2016 , these costs totaled $8 million and $19 million respectively, and have been reclassified from marketing expense 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 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 October 31, 2017.

8



Schedule 2
Noble Energy, Inc.
Condensed Balance Sheets
(in millions, unaudited)
 
 
September 30, 2017
 
December 31, 2016
ASSETS
 
 
 
Current Assets
 
 
 
Cash and Cash Equivalents
$
564

 
$
1,180

Accounts Receivable, Net
675

 
615

Other Current Assets
303

 
160

Total Current Assets
1,542

 
1,955

Net Property, Plant and Equipment
18,396

 
18,548

Goodwill
1,295

 

Other Noncurrent Assets
416

 
508

Total Assets
$
21,649

 
$
21,011

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current Liabilities
 
 
 
Accounts Payable - Trade
$
1,123

 
$
736

Other Current Liabilities
499

 
742

Total Current Liabilities
1,622

 
1,478

Long-Term Debt
7,487

 
7,011

Deferred Income Taxes
1,352

 
1,819

Other Noncurrent Liabilities
1,245

 
1,103

Total Liabilities
11,706

 
11,411

Total Shareholders' Equity
9,466

 
9,288

Noncontrolling Interests (1)
477

 
312

Total Equity
9,943

 
9,600

Total Liabilities and Equity
$
21,649

 
$
21,011

(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 October 31, 2017.

















9



Schedule 3
Noble Energy, Inc.
Condensed Statement of Cash Flows
(in millions, unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Cash Flows From Operating Activities
 
 
 
 
 
 
 
Net Loss Including Noncontrolling Interests (1)
$
(115
)
 
$
(143
)
 
$
(1,566
)
 
$
(745
)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities
 
 
 
 
 
 
 
Depreciation, Depletion and Amortization
523

 
621

 
1,554

 
1,859

Loss on Marcellus Shale Upstream Divestiture
4

 

 
2,326

 

Deferred Income Tax Benefit
(115
)
 
(285
)
 
(988
)
 
(699
)
Dry Hole Cost
2

 
(9
)
 
2

 
105

Undeveloped Leasehold Impairment
33

 
81

 
51

 
81

Loss (Gain) on Extinguishment of Debt
98

 

 
98

 
(80
)
Loss (Gain) on Commodity Derivative Instruments
22

 
(55
)
 
(145
)
 
53

Net Cash Received in Settlement of Commodity Derivative Instruments
4

 
132

 
18

 
454

Stock Based Compensation
16

 
21

 
83

 
61

Other Adjustments for Noncash Items Included in Income
(3
)
 
41

 
12

 
136

Net Changes in Working Capital
72

 
210

 
(27
)
 
(171
)
Net Cash Provided by Operating Activities
541

 
614

 
1,418

 
1,054

Cash Flows From Investing Activities
 
 
 
 
 
 
 
Additions to Property, Plant and Equipment
(741
)
 
(352
)
 
(1,956
)
 
(1,164
)
Clayton Williams Energy Acquisition

 

 
(616
)
 

Additions to Equity Method Investments

 
(2
)
 
(68
)
 
(8
)
Proceeds from Marcellus Shale Upstream Divestiture

 
19

 
1,028

 

Other Acquisitions
(6
)
 

 
(327
)
 

Proceeds from Divestitures and Other
28

 

 
129

 
786

Net Cash Used in Investing Activities
(719
)
 
(335
)
 
(1,810
)
 
(386
)
Cash Flows From Financing Activities
 
 
 
 
 
 
 
Dividends Paid, Common Stock
(49
)
 
(43
)
 
(141
)
 
(129
)
Proceeds from Noble Midstream Services Revolving Credit Facility
50

 

 
245

 

Repayment of Noble Midstream Services Revolving Credit Facility
(40
)
 

 
(45
)
 

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

 
299

 
138

 
299

Proceeds from Revolving Credit Facility
275

 

 
1,585

 
 
Repayment of Revolving Credit Facility

 

 
(1,310
)
 

Repayment of Clayton Williams Energy Long-term Debt

 

 
(595
)
 

(Repayment) Proceeds from Long Term Debt, Net
(10
)


 
(10
)
 
17

Other
(24
)
 
(16
)
 
(91
)
 
(64
)
Net Cash Provided by (Used in) Financing Activities
202

 
240

 
(224
)
 
123

Increase (Decrease) in Cash and Cash Equivalents
24

 
519

 
(616
)
 
791

Cash and Cash Equivalents at Beginning of Period
540

 
1,300

 
1,180

 
1,028

Cash and Cash Equivalents at End of Period
$
564

 
$
1,819

 
$
564

 
$
1,819

(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, 2017, Net Loss includes Net Income Attributable to Noncontrolling Interests in NBLX.

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 October 31, 2017.

10



Schedule 4
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Sales Volumes
2017
 
2016
 
2017
 
2016
Crude Oil and Condensate (MBbl/d)
 
 
 
 
 
 
 
United States Onshore
93

 
75

 
86

 
75

United States Gulf of Mexico
21

 
24

 
22

 
24

Equatorial Guinea
13

 
22

 
18

 
25

Equity Method Investee - Equatorial Guinea
2

 
2

 
1

 
2

Total
129

 
123

 
127

 
126

Natural Gas Liquids (MBbl/d)
 
 
 
 
 
 
 
United States Onshore
55

 
54

 
54

 
54

United States Gulf of Mexico
1

 
1

 
2

 
2

Equity Method Investee - Equatorial Guinea
7

 
7

 
6

 
5

Total
63

 
62

 
62

 
61

Natural Gas (MMcf/d)
 
 
 
 
 
 
 
United States Onshore
429

 
850

 
617

 
884

United States Gulf of Mexico
20

 
24

 
20

 
18

Israel
283

 
310

 
276

 
284

Equatorial Guinea
246

 
261

 
240

 
230

Total
978

 
1,445

 
1,153

 
1,416

Total Sales Volumes (MBoe/d)
 
 
 
 
 
 
 
United States Onshore
219

 
270

 
243

 
276

United States Gulf of Mexico
25

 
29

 
27

 
28

Israel
48

 
52

 
46

 
48

Equatorial Guinea
54

 
65

 
58

 
64

Equity Method Investee - Equatorial Guinea
9

 
9

 
7

 
7

Total Sales Volumes (MBoe/d)
355

 
425

 
381

 
423

 
 
 
 
 
 
 
 
Total Sales Volumes (MBoe)
32,634

 
39,095

 
104,104

 
115,816

 
 
 
 
 
 
 
 
Price Statistics - Realized Prices (1)
 
 
 
 
 
 
 
Crude Oil and Condensate ($/Bbl)
 
 
 
 
 
 
 
United States Onshore
$
46.39

 
$
41.15

 
$
46.86

 
$
37.05

United States Gulf of Mexico
47.73

 
41.50

 
47.89

 
37.79

Equatorial Guinea
51.32

 
43.73

 
51.29

 
40.74

Natural Gas Liquids ($/Bbl)
 
 
 
 
 
 
 
United States Onshore
$
22.91

 
$
14.60

 
$
21.62

 
$
13.30

United States Gulf of Mexico
21.29

 
18.55

 
23.23

 
16.14

Natural Gas ($/Mcf)
 
 
 
 
 
 
 
United States Onshore
$ 2.99 (2)

 
$
2.37

 
$ 3.24 (2)

 
$
2.00

United States Gulf of Mexico
2.70

 
2.91

 
3.18

 
2.41

Israel
5.36

 
5.22

 
5.33

 
5.19

Equatorial Guinea
0.27

 
0.27

 
0.27

 
0.27

(1) Average realized prices do not include gains or losses on commodity derivative instruments.
(2) 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.


11



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

Adjusted loss attributable to Noble Energy and per share (Non-GAAP) should not be considered an alternative to, or more meaningful than, net 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 loss attributable to Noble Energy and per share 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 loss attributable to Noble Energy and per share may be useful for comparison of earnings and per share to forecasts prepared by analysts and other third parties. However, our presentation of adjusted loss attributable to Noble Energy and per share, may not be comparable to similar measures of other companies in our industry.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Net Loss Attributable to Noble Energy (GAAP)
$
(136
)
 
$
(144
)
 
$
(1,612
)
 
$
(746
)
Adjustments to Net Loss
 
 
 
 
 
 
 
Loss on Marcellus Shale Upstream Divestiture
4

 

 
2,326

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
26

 
77

 
(127
)
 
507

Loss (Gain) on Debt Extinguishment
98

 

 
98

 
(80
)
Undeveloped Leasehold Impairment
33

 
81

 
51

 
81

Clayton Williams Energy Acquisition Expenses
4

 

 
98

 

Other Adjustments
23

 
17

 
32

 
111

Total Adjustments Before Tax
188

 
175

 
2,478

 
619

Current Income Tax Effect of Adjustments (1)
(1
)
 
111

 

 
111

Deferred Income Tax Effect of Adjustments (1)
(61
)
 
(172
)
 
(875
)
 
(345
)
Adjustments to Net Loss, After Tax
$
126

 
$
114

 
$
1,603

 
$
385

Adjusted Loss Attributable to Noble Energy (Non-GAAP)
$
(10
)
 
$
(30
)
 
$
(9
)
 
$
(361
)
 
 
 
 
 
 
 
 
Net Loss Attributable to Noble Energy Per Share, Basic and Diluted (GAAP)
$
(0.28
)
 
$
(0.33
)
 
$
(3.47
)
 
$
(1.73
)
Loss on Marcellus Shale Upstream Divestiture
0.01

 

 
5.01

 

Loss (Gain) on Commodity Derivative Instruments, Net of Cash Settlements
0.05

 
0.18

 
(0.27
)
 
1.18

Loss (Gain) on Debt Extinguishment
0.20

 

 
0.21

 
(0.19
)
Undeveloped Leasehold Impairment
0.07

 
0.19

 
0.11

 
0.19

Clayton Williams Energy Acquisition Expenses
0.01

 

 
0.21

 

Other Adjustments
0.05

 
0.03

 
0.07

 
0.25

Current Income Tax Effect of Adjustments (1)

 
0.26

 

 
0.26

Deferred Income Tax Effect of Adjustments (1)
(0.13
)
 
(0.40
)
 
(1.89
)
 
(0.80
)
Adjusted Loss Attributable to Noble Energy Per Share, Diluted (Non-GAAP)
$
(0.02
)
 
$
(0.07
)
 
$
(0.02
)
 
$
(0.84
)
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding, Basic and Diluted
487


430


464


430

(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 and the change in the indefinite reinvestment assertion related to accumulated undistributed earnings of foreign subsidiaries.

12



Schedule 6
Noble Energy, Inc.
Reconciliation of Net Loss Attributable to Noble Energy (GAAP) to Adjusted 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 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 September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Net Loss Attributable to Noble Energy (GAAP)
$
(136
)
 
$
(144
)
 
$
(1,612
)
 
$
(746
)
Adjustments to Net Loss, After Tax   (1)
126

 
114

 
1,603

 
385

Adjusted Loss Attributable to Noble Energy (Non-GAAP)
(10
)
 
(30
)
 
(9
)
 
(361
)
 
 
 
 
 
 
 
 
Adjustments to Adjusted Loss Attributable to Noble Energy
 
 
 
 
 
 
 
Depreciation, Depletion, and Amortization
523

 
621

 
1,554

 
1,859

Exploration Expense (2)
31

 
44

 
85

 
269

Interest, Net of Amount Capitalized
88

 
86

 
271

 
242

Current Income Tax Expense (3)
23

 
37

 
71

 
102

Deferred Income Tax Benefit (3)
(54
)
 
(113
)
 
(113
)
 
(354
)
Adjusted EBITDAX (Non-GAAP)
$
601

 
$
645

 
$
1,859

 
$
1,757

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

Capital Expenditures
(in millions, unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Organic Capital Expenditures, Attributable to Noble Energy (Accrual Based)
$
633


$
297


$
1,901

 
$
935

Acquisition Capital (4)
(12
)
 

 
2,806

 

NBLX Funded Capital Expenditures
59

 

 
165

 

Increase in Capital Lease Obligations (5)

 
5

 

 
5

Total Reported Capital Expenditures (Accrual Based)
$
680

 
$
302

 
$
4,872

 
$
940

(4) Acquisition cost for the three months ended September 30, 2017 includes purchase price adjustments related to the Clayton Williams Energy Acquisition.
(5) Represents estimated construction in progress to date on US operating assets and corporate buildings.







13
NBL Third Quarter 2017 Supplement October 2017


 
2NBL 3Q17 KEY HIGHLIGHTS Solid and differential operational execution Volumes Significantly Exceeding Original Expectations Strong U.S. Onshore Execution and Cash Flow Growth Midstream Integration Providing Operational Advantages Costs and Capital In-line or Better than Guidance • Volumes of 355 MBoe/d, 10 MBoe/d above original midpoint • U.S. onshore oil volumes of 93 MBbl/d above guided range, 7 MBbl/d increase over 2Q17(1) • Record gross sales volumes in Israel of 997 MMcfe/d • U.S. Onshore operating cash flow per BOE up over 50% from 3Q16 • Delivering Delaware activity ramp to plan with 3 multi-well and multi-zone pads online • DJ Basin focus areas Wells Ranch and East Pony volumes up ~10% from 2Q17 • Capital expenditures of $633 MM(2) at low end of guidance range • Total unit operating expenses below expectations • Drilling efficiencies in the Delaware Basin driving more than 35% reduction in cost per lateral foot vs. 2016 • Initial central gathering facility (operated by NBLX) online in Delaware Basin with 10 wells flowing through the facility at the end of 3Q17 • Record 95 MBoe/d oil and gas gathering volumes from NBLX operated systems, including 3rd party systems (1) Adjusted for Marcellus divestiture (2) Excludes NBLX funded capital expenditures


 
3NBL 3Q17 ACTUALS VS. GUIDANCE Beat vs. expectation with strong EBITDAX Financial & Operating Metrics 3Q Guidance 3Q Actuals Total Sales Volumes (MBoe/d) Original: 340 - 350 Increased: 352 - 358 355 Oil (MBbl/d) 120 - 126 129 Natural Gas Liquids (MBbl/d) 65 - 70 63 Natural Gas (MMcf/d) 910 - 950 978 Organic Capital(1) ($MM) 625 - 725 633 Equity Investment & Other Income ($MM) 30 - 40 53 Lease Operating ($/BOE) 4.50 - 4.75 4.63 Gathering, Transportation & Processing ($/BOE) 3.00 - 3.25 2.85 DD&A ($/BOE) 15.00 - 16.00 16.03 Production Taxes (% Oil, NGL, Gas Revenues) 4.3 - 4.7 4.0 Marketing ($MM) 10 - 20 6 Exploration ($MM) 30 - 50 31(2) G&A ($MM) 95 - 110 102 Interest, net ($MM) 85 - 95 88 Earnings Reconciliation 3Q ($MM) GAAP Net Loss attributable to NBL (136) GAAP Net Loss attributable to NBL Before Tax (229) Adjustments to Net Loss, Before Tax 188 Adjusted Net Loss attributable to NBL, Before Tax (41) Current Tax Expense, Adjusted (23) Deferred Tax Benefit, Adjusted 54 Adjusted Loss Attributable to NBL(3) (Non-GAAP) (10) Adjusted EBITDAX 3Q ($MM) Adjusted Loss Attributable to NBL(3) (Non-GAAP) (10) Interest, net 88 Current Tax Expense, Adjusted 23 Deferred Tax Benefit, Adjusted (54) DD&A 523 Exploration 31(2) Adjusted EBITDAX(3) (Non-GAAP) 601 (1) Excludes NBLX funded capital expenditures (2) Excludes $33 MM for certain expiring leases in the Gulf of Mexico (3) Non-GAAP reconciliation to GAAP measure available in 3Q17 earnings release


 
4NBL U.S. ONSHORE Executing to plan, delivering robust volume and cash flow growth 3Q17 Activity DJ Basin Delaware Eagle Ford Other Total Oil (MBbl/d) 61 19 12 1 93 NGL (MBbl/d) 19 4 31 1 55 Gas (MMcf/d) 191 24 206 8 429 Total Sales (MBoe/d) 112 27 76 4 219 Organic Capital(1) ($MM) 206 214 73 493 Avg. Operated Rigs 2 5 7 Wells Drilled(2) 32 17 49 Avg. Lateral Length (ft) 8,230 8,280 8,250 Wells Completed(2) 17 14 11 44 Wells Brought Online(2) 32 14 12 58 Avg. Lateral Length (ft) 9,170 7,295 6,120 8,085 DJ Basin Delaware Basin Eagle Ford 3Q17 Key Highlights • Operating Cash Flow per BOE up > 50% from 3Q16 • U.S. Onshore Oil Record at 93 MBbl/d  On-track to deliver 40% USO oil growth 1Q17 to 4Q17 • 2.2 MM Man-hours Without Recordable or Lost-time Incident Across All Basins • Sales Volumes in Wells Ranch and East Pony in DJ Basin Grew ~10% Over 2Q17 • Well Delivery On Schedule in the Delaware Basin  Initial CGF online supporting Delaware development • Continued Robust Eagle Ford Ramp with 3Q17 volumes up 10% from 2Q17 (1) Excludes NBLX funded capital expenditures (2) Represents NBL operated activity


 
5NBL U.S. ONSHORE Delivering improved margins from portfolio actions and focused capital 100 125 150 175 200 225 3Q16 2Q17 3Q17 50 60 70 80 90 100 3Q16 2Q17 3Q17 MBoe/d MBbl/d (1) Adjusted for Marcellus divestment (2) Operating expense includes LOE, GTP, and production taxes > 50% increase in operating cash flow per BOE from 3Q16 to 3Q17 Increasing Cash Flow Margins • Capital Allocated to DJ Basin, Delaware and Eagle Ford Driving U.S. Onshore Oil and Cash Flow Growth • Lower Margin Natural Gas Volumes from the Marcellus Divested in 2Q17 • Oil Mix Increased to 42% in 3Q17 from 27% in 3Q16 • USO Unit Operating Expense(2) from Ongoing Operations Down 10% from 3Q16 Total USO Production(1) 23% Increase in Last 12 Months USO Oil Production(1) 27% Increase in Last 12 Months


 
6NBL DELAWARE BASIN Executing to plan, progressing development mode Delaware Basin Activity(2) 2Q17 3Q17 Total Sales Volume (MBoe/d) 23 27 Organic Capital(3) ($MM) 141 214 Operated Rigs 4.5 5 Wells Drilled(4) 13 17 Avg. Lateral Length (ft) 7,965 8,280 Wells Completed(4) 11 14 Wells Brought Online(4) 6 14 Avg. Lateral Length (ft) 5,318 7,295 118,000 Net acres 4,225 Gross locations(1) 7,800 ft Average lateral Length 2 BBoe Net unrisked resources(1) Progressing Midstream Build-out, Supporting Upstream Growth • Billy Miner CGF online in July, with 10 wells currently flowing into facility • 2nd CGF expected online late in 4Q17 Majority of 3Q17 Wells Online Focused on Long Laterals and Multi-well Pads • 3-well Monroe pad initial multi-horizon development including Wolfcamp A Upper, Wolfcamp A Lower and 3rd Bone Spring • 2 additional multi-well pads online with Wolfcamp A Upper and Lower completions (1) Locations and resources estimate effective as of CWEI close. (2) Includes CWEI activity as of April 25, 2017 forward. (3) Excludes NBLX funded capital expenditures. (4) Represents NBL operated activity. Cash Flow and Volume Growth • Sales volume up 17% from 2Q17 TX Robust 2017 Volume Growth 0 5 10 15 20 25 0 10 20 30 40 50 1Q 2Q 3Q 4QE Volume Wells Online MBoe/d Wells Online NBL Acreage Ward Reeves Pecos


 
7NBL DELAWARE BASIN Drilling efficiencies ahead of plan 19 days record drill time for a Delaware long lateral well: 10,567 ft lateral, 21,563 ft total depth > 90% within 10 ft interval target zone across long laterals 24% improvement in total footage rate of penetration (ROP) in 3Q17 vs. 1H17 • Real Time Drilling Data Integration Enabling Rapid Design Optimization  Leveraging predictive analytics to improve drilling efficiency and reduce down time  Physics-based approach supplements empirical data • Strong Drilling Precision through Geo-steering • Shared Learnings Across All U.S. Onshore Basins Key Drivers 0 150 300 450 600 2016 1H17 3Q17 $/ft Reducing Average Drilling Cost per Lateral Foot


 
8NBL DELAWARE BASIN Progressing pad development and unlocking value beyond Wolfcamp A 3Q17 Highlights • 12 Wolfcamp A Wells Online in 3Q17, Performing In-line with Expectations • Third Wolfcamp B Well is Significantly Outperforming Expectations in Early Days • > 10% Reduction in Completion Cycle Time • Monroe Pad Long Laterals Exhibiting Shallower Declines  Adjusted flowback procedures from prior design  Experiencing consistent contribution across the entire lateral  No evidence of communication across different horizons • Trigger 3-well Pad Initial Lateral Spacing Test  Lateral spacing for 2 Wolfcamp A Upper wells at 880 ft  Early data showing no evidence of communication across wells Reeves Billy Miner CGF  1st CGF online 3Q17 Cole Younger 32-23  3rd Wolfcamp B completion, 3,800 ft lateral  1,680 IP-30 Boe/d; 75% oil Billy the Kid 2-well Pad  1 Wolfcamp A Upper  1 Wolfcamp A Lower  Online late 3Q17, strong early results Trigger 3-well Pad  2 Wolfcamp A Upper  1 Wolfcamp A Lower  Online late 3Q17, strong early results > 2,300 3rd Bone Spring IP-30 Boe/d 2,100 3rd Bone Spring IP-60 Boe/d > 93% IP-60/IP-30 ratio for Wolfcamp A 10,000 ft laterals 300 avg. Wolfcamp A IP-30 Boe/d per 1,000 lateral ft Continued Strong Results From Monroe Wells


 
9NBL DJ BASIN Focus areas driving higher oil mix CO 352,000 Net acres 3,220 Gross locations(1) 8,400 ft Average lateral Length 2 BBoe Net unrisked resources(1) DJ Basin Activity 2Q17 3Q17 Total Sales Volume (MBoe/d) 107 112 Organic Capital(2) ($MM) 210 206 Operated Rigs 2 2 Wells Drilled(3) 29 32 Avg. Lateral Length (ft) 9,220 8,230 Wells Completed(3) 30 17 Wells Brought Online(3) 33 32 Avg. Lateral Length (ft) 6,530 9,170 Continued Strong New Well Performance • New well wedge outperforming expectations • Benefited by areas protected from line pressures Continuing to Set New Drilling Records • 4 day drilling record in Wells Ranch for 9,616 ft lateral • 2017 drilling cost per lateral foot down 15% from 2016 • Drilling underway in Mustang for 2018 development Activity in Low GOR Areas Increasing Oil Percentage • Combined Wells Ranch and East Pony volumes up ~10% from 2Q17 to 76 MBoe/d 49% 50% 52% 53% 54% 3Q16 4Q16 1Q17 2Q17 3Q17 Oil Mix Continues to Increase (1) Locations and resources estimate effective as of beginning of 2017. (2) Excludes NBLX funded capital expenditures (3) Represents NBL operated activity. Weld Wells Ranch East Pony NBL Acreage Mustang


 
10NBL DJ BASIN Continued strong performance from focus areas 30% 40% 50% 60% 70% 40 50 60 70 80 3Q16 4Q16 1Q17 2Q17 3Q17 Wells Ranch and East Pony Volumes Volumes % of Total DJ Volumes MBoe/d % of Total 3Q17 Highlights • 19 Wells Ranch and 13 East Pony Wells Commenced Production in 3Q17  Record Wells Ranch and East Pony combined volumes of 76 MBoe/d • Record Horizontal Sales Volumes of 103 MBoe/d • 3Q17 Total Basin Oil Volumes Up 7%, Natural Gas Up 5% from 2Q17 • Operating Cash Flow per BOE up Materially  High-margin new well performance, low GOR development, reduced vertical production • Unit Lease Operating Expense Down 5% from 2Q17 2017 Wells Ranch DPs(1) 3 34 >1,000 2017 Wells Ranch DPs(1) wells 10,000+ ft avg. lateral 1,800 lbs/ft avg. proppant Boe/d gross 31 of 34 wells (1) Development plan areas (DPs)


 
11NBL NOBLE MIDSTREAM Top-tier distribution growth with low leverage • 1st NBLX Operated CGF Online Late July with Capacity Expanded to 15 MBbl/d  Construction of additional CGFs expanding crude oil capacity to 90 MBbl/d by mid-2018 • 3Q17 Average Throughput on Advantage Crude Oil System of 36 MBbl/d  Billy Miner CGF connection to Advantage Pipeline commenced operation in 3Q17 • Significant 4Q17 Volume Throughput Growth Anticipated from NBL Development • Evaluating In-Basin and Long-Haul Crude Transmission Opportunities • Wells Ranch and East Pony Oil and Gas Gathering Volumes Up 15% from 2Q17  NBL upstream well results continue outperforming expectations • Gathering and Fresh Water Delivery Systems Online for Third Party Customer • Construction Underway on Mustang IDP Gathering Infrastructure, Online Late 1Q18  Fresh water system operational late 2017 • NBL and Third-Party Well Connections to Drive Further Gathering Growth in 4Q17 DJ Basin HighlightsDelaware Basin Highlights 29% increase in 3Q17 oil and gas gathering volume compared to 2Q17 > 2x produced water gathering in 3Q17 compared to 2Q17 20% anticipated annual distribution growth $42 MM net income in 3Q17 attributable to NBLX


 
12NBL EAGLE FORD SHALE Solid execution delivering cash flow ramp TX Eagle Ford Activity 2Q17 3Q17 Total Sales Volume (MBoe/d) 69 76 Organic Capital ($MM) 113 73 Operated Rigs 1.5 - Wells Drilled(2) 11 - Avg. Lateral Length (ft) 6,315 - Wells Completed(2) 14 11 Wells Brought Online(2) 21 12 Avg. Lateral Length (ft) 6,665 6,120 33,000 Net acres 360 Gross locations(1) 7,600 ft Average lateral Length 460 MMBoe Net unrisked resources(1) Highly-prolific South Gates Ranch Development • 8 wells online in 3Q17, 10 wells expected online in 4Q17 Record Quarterly Sales Volume of 76 MBoe/d North Gates Ranch Co-Development Test Online Late in 3Q17 • 3Q17 volumes reduced by ~5 MBoe/d as a result of flash flooding late in September • Current production rate ~90 MBoe/d • 4-well pad with two Upper and two Lower Eagle Ford wells • Upper Eagle Ford wells significantly outperforming historical completions in early days NBL Acreage Dimmit Webb Gates Ranch L&E Briscoe Ranch Delivering Substantial Production Ramp in 2017 0 5 10 15 20 25 0 20 40 60 80 100 1Q 2Q 3Q 4QE Volume Wells Online MBoe/d Wells Online (1) Locations and resources estimate effective as of beginning of 2017. (2) Represents NBL operated activity.


 
13NBL 500 600 700 800 900 1,000 1,100 EASTERN MEDITERRANEAN Strong natural gas demand in Israel drove all-time record quarter Israel 2Q17 3Q17 Net Gas Sales (MMcfe/d) 275 285 Gross Gas Sales (MMcfe/d) 962 997 Organic Capital ($MM) 143 126 3Q17 Key Highlights • Record Gross Sales Volumes of 997 MMcfe/d  Average production over 1 Bcf/d gross for 79 days in 3Q17  Performed maintenance at Tamar in September and early October • Booked Additional Proved Reserves of 285 Bcfe Net at Tamar or 1 Tcfe Increase in Gross Recoverable Resources  Continued reservoir modeling and learnings from Tamar-8 well  Tamar currently at 11 Tcfe gross recoverable resources • Net Operating Cash Flow of $110 MM in 3Q17  Strong price realizations of $5.36/Mcf Quarterly Israel Gross Sales Volumes AOT 47% WI Tamar 32.5% WI Tamar SW 32.5% WI Tel Aviv Ashdod Israel Egypt Cyprus 35% WI Leviathan 39.7% WI Dor Discovery Existing Pipeline Planned Pipeline Sanctioned NBL Interests Producing MMcfe/d Record Volumes 1Q 2Q 3Q 4Q 2014 1Q 2Q 3Q 4Q 2015 1Q 2Q 3Q 4Q 2016 1Q 2Q 3Q 4QE 2017


 
14NBL LEVIATHAN MAJOR PROJECT Progressing towards first gas sales by end of 2019 23% complete with Phase I development 100% complete with critical path procurement activities 0 lost-time incidents Project Phase 2017 2018 2019 Sanction Order Critical Path Equipment Detail Design and Engineering Pipeline Manufacturing Equipment Manufacturing Commissioning and First Gas Drilling and Completions Offshore Platform Installation Progressing Pipeline and Equipment Engineering Design and Manufacturing and Engineering Design Pipe Delivery in Cyprus Storage Yard Production Deck Framing


 
15NBL OTHER GLOBAL OFFSHORE Continued exceptional operational and safety performance Key Highlights • Assets Generated ~$130 MM Net Operating Cash Flow Combined in 3Q17  Managing field production declines • Sales Volumes at Top End of Guidance in Gulf of Mexico Driven by Strong Well Performance and Facility Uptime • Sales Volumes Above Guidance in Equatorial Guinea, with No Liftings at Alba  Completed conversion of 2 wells at Alba field from natural gas injection to producing wells • Gunflint Reached 1 Year of Production Milestone in July • Continued Exceptional Safety Performance  3+ years without lost-time incident in West Africa  1+ year without recordable in Gulf of Mexico • 4Q17E Oil Volumes Impacted by Hurricane Nate in the Gulf of Mexico and Adjustments to the Lifting Schedule in West Africa Gulf of Mexico Equatorial Guinea 2Q17 3Q17 2Q17 3Q17 Oil (MBbl/d) 22 21 22(1) 13(1) Equity Method (MBbl/d) 2 2 NGL (MBbl/d) 2 1 Equity Method (MBbl/d) 4 7 Gas (MMcf/d) 16 20 231 246 Total Sales (MBoe/d) 27 25 66 63 Organic Capital ($MM) 0 3 16 0 (1) Produced volumes differ from sales in Equatorial Guinea due to the timing of liftings. Produced oil volumes were 22 MBbl/d in 2Q17 and 21 MBbl/d in 3Q17. Aseng FPSO, Equatorial Guinea


 
16NBL Total company sales volumes and U.S. Onshore oil maintained 4Q17 GUIDANCE Sales Volume Crude Oil and Condensate (MBbl/d) Natural Gas Liquids (MBbl/d) Natural Gas (MMcf/d) Total Equivalent (MBoe/d) Low High Low High Low High Low High Fourth Quarter 2017 United States Onshore 102 108 62 66 490 510 248 258 United States Gulf of Mexico 16 20 1 2 20 30 22 26 Israel - - - - 255 285 43 48 Equatorial Guinea 16 20 - - 220 240 54 58 Equatorial Guinea - Equity method investment 1 2 6 6 - - 7 8 Total Company 140 146 69 74 1,005 1,045 380 390 Capital & Cost Metrics Low High Capital Expenditures(1) ($MM) Total Company Organic Capital 600 700 Cost Metrics Lease Operating Expense ($/BOE) 4.30 4.60 Gathering, Transportation & Processing ($/BOE) 3.00 3.25 Production Taxes (% Oil, Gas, NGL Revenues) 4.0 4.5 Marketing ($MM) 10 20 DD&A ($/BOE) 15.00 16.00 Exploration ($MM) 40 60 G&A ($MM) 95 110 Interest, net ($MM) 80 90 Other Items Guidance Equity Investment and Other Income ($MM) 40 45 Average outstanding shares – diluted (MM) 480 490 (1) Excludes NBLX funded capital expenditures


 
17NBL Forward-Looking Statements and Other Matters This presentation contains certain "forward-looking statements" within the meaning of federal securities laws. Words such as "anticipates", "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 reports on Form 10-K, respectively, 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 use certain terms in this presentation, such as “net unrisked resources”, “type curve”, “MMBoe type curve”, “gross recoverable resources” or “resources estimates” 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 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 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 the Noble Energy’s respective earnings release for reconciliations of the differences between any historical non-GAAP measures used in this presentation and the most directly comparable GAAP financial measures.