Noble Energy Announces Third Quarter 2014 Results
Noble Energy, Inc. (NYSE:NBL) announced today third quarter 2014 net income of $419 million, or $1.12 per diluted share. Excluding the impact of certain items, which would typically not be considered by analysts in published earnings estimates, third quarter 2014 adjusted income(1) was $110 million, or $0.28 per diluted share. Discretionary cash flow(1) was $811 million and net cash provided by operating activities was $945 million. Capital expenditures for the third quarter of 2014 totaled $1.3 billion.
Total sales volumes for the quarter averaged a record 302 thousand barrels of oil equivalent per day (MBoe/d). This represents an increase of three percent compared to the third quarter of 2013, or 10 percent after adjusting for divested assets. Liquids comprised 43 percent (33 percent crude oil and condensate and 10 percent natural gas liquids) of third quarter 2014 volumes, with natural gas volumes the remaining 57 percent. U.S. sales volumes for the quarter totaled 182 MBoe/d, while International sales volumes totaled 120 MBoe/d, lower than produced volumes by two thousand barrels per day (MBbl/d) due to the timing of liftings in Equatorial Guinea. Versus the third quarter of last year, total sales volumes were up due to the Company’s continued development of the DJ Basin and Marcellus Shale resource plays, as well as an increase in Israel due to higher natural gas demand and deliverability.
David L. Stover, Noble Energy’s President and Chief Executive Officer, commented, “Our continued growth, highlighted by record quarterly sales volumes in three of our core areas, is the result of strong execution and improving well performance. Enhancements in our U.S. onshore business are being delivered through continued focus on extended reach laterals, optimization of completion designs, and well downspacing in both the DJ Basin and Marcellus Shale. In addition, we brought forward significant value with the very successful IPO of our midstream Marcellus business. Offshore, we had multiple successful wells drilled, with a discovery at Katmai and additional resources found at Dantzler, adding to our already impressive lineup of major projects in the Gulf of Mexico. Expansion of capacity at the Tamar field in Israel is on schedule, and we are capturing substantial and strategic markets for our Leviathan gas as well. Overall, our high-quality and diversified portfolio is designed to build value in a variety of environments.”
Third quarter 2014 total production costs, including lease operating expense, production and ad valorem taxes, and transportation and gathering averaged $7.81 per barrel of oil equivalent (Boe), and depreciation, depletion, and amortization totaled $16.56 per Boe. Exploration expense was $217 million, which included costs related to the Bright well in the Gulf of Mexico and the Scotia well offshore the Falkland Islands (drilled in 2012), as well as 3D seismic expenditures incurred offshore Equatorial Guinea. The effective tax rate on adjusted income for the quarter was 39 percent.
Included in the adjustments to net income for the third quarter of 2014 were non-cash commodity derivative gains and a gain on the sale of certain non-core U.S. Onshore assets, primarily the Company’s Powder River and Texas Panhandle assets. In addition, the Company recorded an impairment associated with the sale of its Piceance Basin assets.