Noble Energy Inc.
NOBLE ENERGY INC (Form: 8-K, Received: 02/13/2017 16:49:01)


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): February 13, 2017

  NBLLOGO3.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))






Item 2.02. Results of Operations and Financial Condition.
On February 13, 2017, Noble Energy, Inc. (the “Company”) issued a press release announcing results for the fiscal year and fiscal quarter ended December 31, 2016. 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.nobleenergyinc.com.
The Company’s press release announcing its financial results for its fiscal year and fiscal quarter ended December 31, 2016 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. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
In accordance with General Instruction B.2. of Form 8-K, the information set forth herein and in the press release is deemed to be "furnished" and shall not be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Item 7.01. Regulation FD Disclosure.
On February 13, 2017, the Company issued a press release with respect to its 2017 capital budget and operational and financial guidance. A copy of the Company’s press release is furnished as Exhibit 99.2 to this current report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits. The following exhibits are furnished as part of this Current Report on Form 8-K:
 
99.1
Press Release dated February 13, 2017 announcing results for the fiscal year and fiscal quarter ended December 31, 2016.
 
99.2
Press Release dated February 13, 2017 announcing the 2017 capital budget and operational and financial guidance.





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:
February 13, 2017
 
 
By: 
 
/s/ Kenneth M. Fisher
 
 
 
 
 
 
Kenneth M. Fisher
 
 
 
 
 
 
Executive Vice President, Chief Financial Officer





INDEX TO EXHIBITS
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
Press Release dated February 13, 2017 announcing results for the fiscal year and fiscal quarter ended December 31, 2016.
99.2
 
Press Release dated February 13, 2017 announcing the 2017 capital budget and operational and financial guidance.




Exhibit 99.1

NBLLOGO2.JPG
  
 
NEWS RELEASE
 
 
 
 
 
 
 

NOBLE ENERGY ANNOUNCES FOURTH QUARTER AND YEAR-END 2016 RESULTS

Continued outperformance delivered quarterly sales volumes of 410 MBoe/d, at the top end of the guidance range. Oil volumes of 131 MBbl/d were above expectations, driven by the DJ Basin and Gulf of Mexico.
Strong natural gas demand contributed to a 10 percent increase in Israel sales volumes compared to the fourth quarter of 2015.
Organic quarterly capital expenditures totaled $404 million, below the low end of guidance.
U.S. Onshore well results from enhanced completions continued to perform in line with or above expectations. Wolfcamp A wells in the Delaware Basin that tested 3,000 to 5,000 pounds of proppant per lateral foot averaged an IP-30 rate of 1,140 Boe/d (268 Boe/d per 1,000 lateral feet), consistent with expectations from early production.
DJ Basin wells using enhanced completions in Wells Ranch that reached peak production within the fourth quarter are outperforming the type curve by more than 50 percent on average after 120 days on production.
Closed the sale of 3.5 percent working interest in Tamar at a value of $431 million, generating cash proceeds of $316 million after-tax.
Reduced outstanding debt by $850 million and exited the fourth quarter of 2016 with $5.2 billion in liquidity, including cash on hand and an undrawn credit facility.
Realized organic reserves replacement of over 1.9 times 2016 production, including extensions, discoveries and performance revisions , at a cost of $4.86 per barrel of oil equivalent.

HOUSTON (February 13, 2017) -- 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

(1) A Non-GAAP measure, see attached Reconciliation Schedules
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$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:
Achieved record full year sales volumes of 420 MBoe/d, up 18 percent from 2015 reported volumes. U.S. onshore volumes were up 22 percent and offshore was higher by 12 percent.
Organic capital expenditures of $1.3 billion were below guidance.
Received more than $1.5 billion in proceeds from asset divestitures, including proceeds from Noble Midstream Partners LP’s initial public offering.
Reported a net loss attributable to Noble Energy of $998 million, or $2.32 per diluted share. The adjusted loss (1) attributable to Noble Energy was $248 million, or $0.58 per diluted share. Adjusted EBITDAX (1) was $2.5 billion.


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



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 in the quarter and lower future corporate tax rate in Israel, as well as 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.


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Highlights include:
Drilled 33 wells at an average lateral length of over 5,600 feet, with nearly all of the wells drilled in the fourth quarter located in East Pony.
Commenced production on 16 wells, with an average lateral length of over 8,400 feet. Five of the wells were located in Wells Ranch and 11 were in East Pony. Each well utilized slickwater completion fluid, and the average proppant concentration was over 2,000 pounds per lateral foot.
Nineteen additional wells within Wells Ranch, all of which commenced production in the third quarter of 2016, reached peak production. The wells, with an average lateral length of 6,500 feet, utilized an average proppant concentration over 1,800 pounds per foot, and delivered an actual IP-90 of 750 Boe/d (60 percent oil). When normalized to a 9,500’ lateral length, the wells are performing more than 50 percent above the Wells Ranch one million barrel of oil equivalent (MMBoe) type curve.
The Company exited 2016 with two operated rigs and 41 wells drilled but uncompleted.
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:
Drilled four wells within the quarter, with an average lateral length of approximately 7,200 feet. Average drilling time was two days shorter while the average lateral length was over 30 percent longer than wells drilled in the first three quarters of 2016.
Commenced production on five wells in the fourth quarter. The wells had an average lateral length of 4,860 feet. Three wells were completed with 3,000 pounds per lateral foot, one well with 4,200 pounds per lateral foot and one well with 5,000 pounds per lateral foot. Four of the wells were landed in the Wolfcamp A zone, and had an average IP-30 rate of 1,140 Boe/d, or 268 Boe/d per thousand lateral feet. On average and when normalized to 7,500 lateral feet, the wells are performing in line with the 1.2 MMBoe type curve and consistent with Company expectations after early production. The Company’s first Wolfcamp B well was completed with 3,000 pounds of proppant per lateral foot and achieved an IP-30 rate of 1,003 Boe/d, or 140 Boe/d per thousand lateral feet. The well is performing consistent with expectations and the 1.1 MMBoe type curve, when normalized for lateral length.
The Company acquired 7,200 acres in and around its existing Southern Delaware acreage position. The bolt-on acquisitions included 2,400 Boe/d production, 150 incremental gross well


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locations, and also increased the working interest and lateral lengths for 325 existing well locations. The transaction closed in early January 2017.
The Company added two rigs in the quarter, exiting the year with three operated rigs. There were 12 wells drilled but uncompleted at the end of 2016.

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:
Drilled fourteen wells to total depth within the quarter. Eight of the wells were located in Gates Ranch with an average lateral length of 6,400 feet, all in the Lower Eagle Ford. The remaining six wells were located in the L&E area, with an average lateral length of 6,250 feet. Half of these wells were landed in the Lower Eagle Ford and half were in the Upper Eagle Ford.
Commenced production on six Lower Eagle Ford wells within the quarter, all located in the Company’s Briscoe Ranch area, with an average of 2,000 pounds of proppant per lateral foot. Lateral spacing between the wells was 400 feet, and the average lateral length was 4,820 feet. On average, the wells achieved an IP-30 rate of 299 Boe/d per thousand lateral feet, in line with the Company’s expectations given the lateral spacing. Approximately one-third of the production from the wells is oil.
Late in the fourth quarter, the Company brought on production its initial operated Upper Eagle Ford well, using 1,920 pounds of proppant per lateral foot. The well was 4,540 lateral feet and achieved an IP-30 rate of 228 Boe/d per thousand lateral feet. The Company is encouraged by these early results.
There were two operated rigs and 30 wells drilled but uncompleted at the end of 2016.
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:


5



Closed the separation of the Joint Venture with CONSOL Energy Inc. on December 1, 2016. Post closure, Noble Energy maintains 100 percent working interest in approximately 363,000 net acres in the Marcellus.
CONE Gathering LLC contributed its remaining 25 percent ownership interest in CONE Midstream DevCo I LP to CONE Midstream Partners LP. Through this transaction, Noble Energy received $70 million in cash and approximately 2.6 million common units of CONE Midstream Partners LP.
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:
Gunflint produced an average of 8 MBoe/d net within the fourth quarter. The Big Bend and Dantzler fields produced a combined average of 16 MBoe/d net.
Completed a safe and efficient transition to begin operatorship at the Thunder Hawk facility.
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:
Gas volumes at Alba remain at plateau since the start-up of the B3 compression platform in July of 2016.
Alen and Aseng surpassed 30 million barrels of crude oil and condensate (MMBbls) and 80 MMBbls of gross cumulative production, respectively. Both Alen and Aseng have also reached over 900 days without a lost time incident.
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.



6



Highlights include:
Closed the previously announced sale of Tamar working interest in December 2016. The buyer elected to execute an option to purchase an additional half of a percent, resulting in a total of 3.5 percent working interest sold. The transaction value of $431 million resulted in net cash proceeds of $316 million after-tax.
Within the quarter, an additional 50 MMcf/d volumes were contracted for Leviathan gas sales, bringing the total gross volumes under contract to up to 525 MMcf/d and gross contract revenues estimated to over $15 billion.
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.



7



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.







8





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 .

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

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


9



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 .  






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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 Gas
323

 
272

 
1,239

 
1,056

Natural Gas Liquids  (1)
92

 
70

 
296

 
197

Income from Equity Method Investees
31

 
30

 
102

 
90

Total Revenues
1,010

 
860

 
3,491

 
3,183

Operating Expenses
 
 
 
 
 
 
 
Lease Operating Expense
130

 
146

 
542

 
563

Production and Ad Valorem Taxes
5

 
38

 
78

 
127

Transportation and Gathering Expense (1)
129

 
82

 
463

 
289

Marketing and Processing Expense, Net
17

 
5

 
75

 
30

Exploration Expense
549

 
180

 
925

 
488

Depreciation, Depletion and Amortization
595

 
686

 
2,454

 
2,131

General and Administrative
106

 
89

 
399

 
396

Gain on Divestitures
(261
)
 

 
(238
)
 

Asset Impairments
92

 
490

 
92

 
533

Goodwill Impairment

 
779

 

 
779

Other Operating Expense (Income), Net
11

 
77

 
(3
)
 
319

Total Operating Expenses
1,373

 
2,572

 
4,787

 
5,655

Operating Loss
(363
)
 
(1,712
)
 
(1,296
)
 
(2,472
)
Other Expense (Income)
 

 
 

 
 
 
 
Loss (Gain) on Commodity Derivative Instruments
87

 
(170
)
 
139

 
(501
)
Interest, Net of Amount Capitalized
86

 
80

 
328

 
263

Other Non-Operating Expense (Income), Net
5

 
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
 
 
 
 
 
 
 
Basic
430

 
429

 
430

 
402

Diluted
430

 
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.


11



(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.



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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, Net
615

 
450

Commodity Derivative Assets

 
582

Other Current Assets
160

 
216

Total Current Assets
1,955

 
2,276

Net Property, Plant and Equipment
18,548

 
21,300

Other Noncurrent Assets
508

 
620

Total Assets
$
21,011

 
$
24,196

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current Liabilities
 
 
 
Accounts Payable - Trade
$
736

 
$
1,128

Other Current Liabilities
742

 
677

Total Current Liabilities
1,478

 
1,805

Long-Term Debt
7,011

 
7,976

Deferred Income Taxes
1,819

 
2,826

Other Noncurrent Liabilities
1,103

 
1,219

Total Liabilities
11,411

 
13,826

Total Shareholders' Equity
9,288

 
10,370

Noncontrolling Interests (1)
312

 

Total Equity
9,600

 
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.
















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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 Amortization
595

 
686

 
2,454

 
2,131

Asset Impairments
92

 
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 Instruments
87

 
(170
)
 
139

 
(501
)
Net Cash Received in Settlement of Commodity Derivative Instruments
114

 
326

 
569

 
1,009

Gain on Divestitures
(261
)
 

 
(238
)
 

Stock Based Compensation
16

 
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 Activities
297

 
576

 
1,351

 
2,062

Cash Flows From Investing Activities
 
 
 
 
 

 
 

Additions to Property, Plant and Equipment
(377
)
 
(460
)
 
(1,541
)
 
(2,979
)
Proceeds from Divestitures
455

 

 
1,241

 
151

Marcellus Shale Acreage Exchange Consideration
(213
)
 

 
(213
)
 

Additions to Equity Method Investments

 
(18
)
 
(8
)
 
(104
)
Distributions from Equity Method Investments
70

 

 
70

 

Other
20

 

 
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
)
Other
2

 
(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 Period
1,819

 
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.



14



(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.


15



Schedule 4
Noble Energy, Inc.
Volume and Price Statistics
(unaudited)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
Sales Volumes
2016
 
2015
 
2016
 
2015
Crude Oil and Condensate (MBbl/d)
 
 
 
 
 
 
 
United States
102

 
100

 
99

 
81

Equatorial Guinea
27

 
37

 
26

 
31

Total consolidated operations
129

 
137

 
125

 
112

Equity method investee - Equatorial Guinea
2

 
1

 
2

 
2

Total
131

 
138

 
127

 
114

Natural Gas Liquids (MBbl/d)
 
 
 
 
 
 
 
United States
50

 
53

 
54

 
39

Equity method investee - Equatorial Guinea
6

 
6

 
5

 
5

Total
56

 
59

 
59

 
44

Natural Gas (MMcf/d)
 
 
 
 
 
 
 
United States
816

 
859

 
881

 
708

Israel
272

 
247

 
281

 
252

Equatorial Guinea
250

 
243

 
235

 
227

Total
1,338

 
1,349

 
1,397

 
1,187

Total Sales Volumes (MBoe/d)
 
 
 
 
 
 
 
United States
287

 
295

 
301

 
237

Israel
46

 
42

 
47

 
42

Equatorial Guinea
69

 
78

 
65

 
69

Total consolidated operations
402

 
415

 
413

 
348

Equity method investee - Equatorial Guinea
8

 
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 Guinea
51.39

 
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

Israel
5.27

 
5.17

 
5.21

 
5.34

Equatorial Guinea
0.27

 
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.


16



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 Settlements
201

 
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 Tax
513

 
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, Diluted
433

 
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.



17



[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.


18



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 Amortization
595

 
686

 
2,454

 
2,131

Exploration Expense [2]
65

 
85

 
334

 
393

Interest, Net of Amount Capitalized
86

 
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 Consideration
234

 

 
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.


19



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.



20


Exhibit 99.2

NBLLOGO1.JPG
  
 
NEWS RELEASE
 
 
 
 
 
 
 

NOBLE ENERGY PROVIDES DETAILED 2017 OUTLOOK AND GUIDANCE

Full-year sales volumes have been raised to 415 - 425 MBoe/d, up nearly 5 percent from last year, after adjusting for 2016 divestment impacts. Volumes from the announced Clayton Williams Energy acquisition are included in the Company’s total beginning with expected closing in the second quarter of 2017.
Total Company oil volumes are anticipated to be higher by approximately 9 percent, after adjusting for 2016 divestment impacts. U.S. onshore oil is anticipated to be up nearly 30 percent year on year, after adjusting for 2016 divestments.
Organic capital expenditures for 2017 are estimated to be between $2.3 and $2.6 billion.
Approximately 75 percent of the total capital program is allocated to U.S. onshore development, primarily focused on liquids-rich opportunities in the DJ Basin, Delaware Basin, and Eagle Ford.
Eastern Mediterranean capital expenditures, including development costs associated with the Leviathan project, represent over 20 percent of the Company’s total.

HOUSTON (February 13, 2017) - Noble Energy, Inc. (NYSE: NBL ) (“Noble Energy” or “the Company”) today provided updated and detailed guidance for 2017, including capital expenditure and sales volume expectations, along with various cost items for the year.

David L. Stover, the Company's Chairman, President and CEO, commented, “Building on our strong performance over the last couple of years, Noble Energy is now rapidly accelerating our pace of development in 2017. In the U.S. onshore business, we are materially increasing the capital allocation to each of our liquids-focused assets in 2017, including the DJ Basin, the Delaware Basin, and the Eagle Ford. We will continue to concentrate on long laterals and pad drilling, enhanced completions with higher proppant loadings and tighter stage and cluster spacing, as well as integrated facility design. We have leading positions in two of the top U.S. oil basins, and we materially enhanced our Delaware Basin position earlier this year through the announced acquisition of Clayton Williams Energy. Our onshore portfolio provides some of the highest return opportunities in the U.S., and our 2017 capital plan positions us for significant value-added growth, near term and for many years to come.”






Stover continued, “In addition to our onshore business, we have a tremendous opportunity with the Leviathan project offshore Israel. In 2017, our teams will begin project development, with first gas targeted for the end of 2019. I have no doubt that our outstanding track record of major project execution will again deliver substantial value to the Company. At the same time as we progress Leviathan, we will continue to maximize production and cash flow from our other offshore assets. We are excited about 2017, which will certainly be an impactful year for Noble Energy, and we are off to a great start.”

Capital Program
At the midpoint of the annual capital range of $2.3 to $2.6 billion for 2017, Noble Energy expects to invest approximately $1.8 billion in the U.S. onshore (75 percent of total) and $625 million (25 percent of total) in offshore and other activities. Anticipated capital by business unit is:

Initial 2017 Organic Capital Program ($ MM)
DJ Basin
$850
 
Eastern Med.
$550
Delaware Basin
$500
 
Other
$75
Eagle Ford
$325
 
 
 
Marcellus
$150
 
 
 
U.S Onshore
$1,825
 
Offshore / Other
$625
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
$2,300 – 2,600

U.S. onshore organic investments are up approximately 90 percent from 2016 levels and will be primarily focused on drilling and completion activities within the DJ Basin, Delaware Basin and Eagle Ford. Capital expenditures in the Marcellus Shale will focus on the completion of previously-drilled uncompleted wells. For the Clayton Williams Energy assets, reported capital has been included from closing (expected in the second quarter of 2017) through the end of the year.

Noble Energy’s total U.S. onshore rig count is expected to average more than eight operated rigs for 2017, exiting the year with nine. A third operated rig for the DJ Basin has been accelerated and is now planned to be added in the second quarter of 2017. In the Delaware Basin, Noble Energy increased its operated rig count on its existing position to three rigs during the fourth quarter of 2016 and anticipates running three rigs during 2017. Following closing of the Clayton Williams Energy acquisition, Noble Energy anticipates adding a second operated rig to this position mid-year and a third rig by the end of 2017. Combined, total rigs running at the exit of 2017 in the Delaware Basin is anticipated to be six operated rigs. On average for 2017, a one rig program is anticipated in the Eagle Ford.






The Company anticipates to drill and commence production on approximately 225 onshore wells in 2017. The average drilling length across the U.S. onshore activity for 2017 is 8,200 lateral feet, with approximately two-thirds of the wells to be drilled in the DJ Basin, nearly 25 percent in the Delaware and the remainder in the Eagle Ford. In the DJ Basin, half of the anticipated wells in the 2017 program are located in Wells Ranch. The Company will also be drilling wells in the East Pony and Mustang areas. In the Delaware Basin, the vast majority of the wells are expected to be in the Wolfcamp A interval, with a few wells in other zones. The majority of the Eagle Ford program is focused on Lower Eagle Ford wells in Gates Ranch; however, the Company plans to also include multiple Upper Eagle Ford wells in its 2017 activity. Noble Energy will continue to utilize enhanced completion designs throughout its U.S. onshore well activity.

Included in the U.S. onshore capital expenditure amount is approximately $120 million related to midstream facility infrastructure buildout for central gathering facilities (CGF) and associated gathering lines, split evenly between the DJ Basin and Delaware Basin. These amounts include the buildout of the CGF in the Mustang area of the DJ Basin as well as for the Company’s first two CGFs in the Delaware Basin. The $120 million reflects Noble Energy’s interest in the respective development companies (NBL currently owns 75% of both systems). The remaining 25 percent is owned by Noble Midstream Partners LP (NYSE: NBLX) (“Noble Midstream Partners” or “the Partnership”), which is designing and operating the facilities in support of the Company’s long-term upstream plans. Noble Midstream Partners’ organic capital program for 2017 of $155 to $175 million, attributable to the Partnership, is not included in the Company’s capital guidance amount, although it will be consolidated when reported as a result of the Company’s ownership of the general partner.

Capital expenditures in the Eastern Mediterranean for the initial development of the Leviathan project include drilling one production well, long-lead investment items, and ramp up of construction activities. The Company will also complete an additional production well at Tamar, which was drilled in the fourth quarter of 2016.

The remainder of the capital program is planned for offshore and corporate, including the Gulf of Mexico and West Africa, as well as other exploration activities. Late in 2017, Noble Energy anticipates participating in the drilling of the Araku exploration prospect offshore Suriname. The Company holds a 20 percent non-operated working interest in the prospect, with total gross unrisked resources in excess of 500 million barrels of oil equivalent.

Sales Volumes
Full year sales volumes are anticipated to average approximately 415 - 425 MBoe/d for 2017, including volumes from the Clayton Williams Energy properties following closing of the transaction. In total, this represents a 5 percent increase over last year, adjusted for 2016 divestments.






Total U.S. onshore volumes are expected to be up 10 percent versus 2016, after adjusting for the impact of 2016 divestments. U.S. onshore oil volumes are expected to be higher by nearly 30 percent on a full year basis and 40 percent when comparing the second half of 2017 to the second half of 2016. The majority of U.S. onshore growth in 2017 is driven by development programs in the Delaware and Eagle Ford assets. Full year 2017 DJ Basin volumes are anticipated to be equivalent to 2016, although higher on an exit rate basis. Sales volumes from the Marcellus are expected to be down from 2016 as a result of the impact of the divested volumes from the Marcellus JV separation, as well as natural decline in existing production.

In offshore areas, total reported net production in Israel is anticipated to be down slightly from 2016, with underlying natural gas demand growth partially offsetting the impact of the 3.5 percent Tamar interest sale in late 2016. In the Gulf of Mexico and West Africa, volume declines are expected from 2016.

Sales volumes are expected to grow materially throughout the year. The trajectory of volumes through the year is expected to be:
First Quarter 2017    370 – 380 MBoe/d
Second Quarter 2017    395 – 415 MBoe/d
Second Half 2017    440 – 460 MBoe/d
    
First quarter 2017 sales volumes reflect lower liftings in West Africa as compared to the fourth quarter of 2016 by over 10 MBbl/d. In addition, asset divestitures are resulting in a decrease in sales volumes from the fourth quarter of 2016 to the first quarter of 2017. This amount totals approximately 15 MBoe/d and is primarily comprised of the Marcellus JV dissolution impact and the 3.5% working interest sale in Tamar. Underlying production from the Marcellus is expected to be impacted by natural decline and no new wells commencing production in the quarter. In the DJ Basin, slight volume decline is expected, with the first quarter reflecting the fewest new well startups during 2017.

Second quarter volumes are expected to include a partial quarter of the Clayton Williams Energy production and will begin to reflect the production impact from the ramp in U.S. onshore drilling and completions. Total Company sales volumes in the second half of 2017 are expected to reflect continued growth from the onshore development programs.

Full detailed first quarter 2017 guidance is provided in the Company’s supplemental slides for today’s upcoming conference call. The slides are available on the Company’s website.







2017 Full-year Operational and Financial Guidance
The breakdown of the Company's estimated annual average daily volumes for 2017 by product and location is:

Crude Oil and Condensate (MBbl/d)
United States Onshore         90 - 95
United States Gulf of Mexico         19 - 22
Equatorial Guinea         20 - 22
Equatorial Guinea – equity method investment    1 - 2
Total        132 - 138

Natural Gas Liquids (MBbl/d)
United States Onshore        60 - 64
United States Gulf of Mexico        1 - 2
Equatorial Guinea – equity method investment    5 - 6
Total        66 - 72

Natural Gas (MMcf/d)
United States Onshore        750 - 785
United States Gulf of Mexico        15 - 20
Equatorial Guinea         240 - 250
Israel         255 - 270
Total        1,275 - 1,305

Total Equivalent Sales Volumes (MBoe/d)
United States Onshore        277 - 287
United States Gulf of Mexico        23 - 27
Equatorial Guinea         60 - 64
Equatorial Guinea – equity method investment    6 - 8
Israel        42 - 45
Total        415 - 425

At the midpoint of the Company’s volume guidance, existing hedge positions cover over 35 percent of global crude oil and condensate production and over 55 percent of U.S. natural gas production.






Equity method investments include income generated from the methanol facilities, the LPG plant in Equatorial Guinea, as well as the CONE MLP. Equity method income for 2017 is estimated at $110 to $140 million.

Costs and Expenses
Lease operating ($ per BOE)        $ 3.60 - $ 3.90
Transportation and gathering ($ per BOE)        $ 3.70 - $ 4.00
Depreciation, depletion and amortization ($ per BOE)    $ 15.00 - $ 15.90
    
Production and ad valorem taxes        3.5 – 4.0% of oil, gas and NGL revenues

Marketing and processing ($ MM)        $ 70 - $ 90
Exploration ($ MM)        $ 140 - $ 170
General and administrative ($ MM)        $ 390 - $ 430
Interest, net* ($ MM)        $ 340 - $ 370
*Capitalized interest is estimated to be $65 million.

Other Items
Effective tax rate         30 - 40%
Deferred tax ratio         80 - 100%

Tax guidance is applicable to earnings before unrealized mark-to-market gain / loss on commodity derivatives and other items typically not factored in by analysts.

Diluted outstanding shares are expected to average 465 to 475 million for the full year, reflecting the issuance of 55 million shares associated with the Clayton Williams Energy acquisition, which is expected to close in the second quarter of 2017.









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

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


Forward Looking Statements
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 , 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 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. 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.

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 “gross unrisked resources” and “EUR” or “estimated ultimate recovery”, 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 .