Noble Energy earnings down 23 percent

HOUSTON — Exploration and production company Noble Energy saw first quarter profits slide 23 percent but pointed to growing production domestically and abroad.

The company reported earnings of $200 million or $0.55 per share in the first quarter, down from $261 million or $0.72 per share a year ago.

“Following on our strong 2013, Noble Energy continues to deliver on its growth objectives, with the first quarter laying a good foundation from which to build on for the remainder of the year,” Charles Davidson, Noble Energy’s chairman and CEO, said in a statement.

Thursday’s earnings report was the first since the company announced earlier this month that Davidson would retire and be replaced by company president David Stover next year.

Company officials barely discuss the leadership switch during a conference call Thursday morning with analysts.

“We have plenty to do here and we’re fully occupied,” Davidson said, laughing off a suggestion from one analyst that after retiring from the company that he might be well-positioned to serve as U.S. ambassador to Israel, a country where Noble has substantial operations.

Noble officials also elaborated on their publicity campaign underway in Colorado. Noble, in partnership with Anadarko, is behind and effort known as Coloradoans for Responsible Energy Development that is trying to beat back potential ballot proposals that might restrict fracking in the state.

“I think we’re prepared for a full communication effort,” Davidson said on the conference call. “It’s going to be a lengthy summer and we’ll see. There’s a lot of political dynamics that are happening here and it changes daily.”

Noble officials said they sold 286,000 barrels of oil equivalent per day in the first quarter, a 20 percent increase compared to the same period a year after adjusting for assets it’s sold. “The opening of 2014 has gone by very quickly, and we certainly had a good start to the year,” Davidson said.

Officials also said they finalized two export agreements in the first quarter to sell natural gas from its operations in the Tamar and Leviathan fields off the cost of Israel to customers in Jordan and the Palestinian Authority.

The company has a 30-year development and production lease at Leviathan. Leaders said despite some speculation that the project could provide energy to Europe at a time when many hope to wean the continent off of Russian gas, the project will focus on customers closer to Israel.

“I guess the bottom line is yes, we get get calls. Yes, we’re getting a lot of interest. But right now, we see Leviathon Phase 1 being strongly supported by the regional markets that we’ve been developing in the course of the last year,” Davidson told analysts.

The company said domestic sales volumes were up 16 percent, due largely to gains in Colorado’s DJ Basin and the Marcellus Shale, and adjusted for divestitures. Abroad, sales volumes were up 23 percent in the quarter due to success in offshore Israel as well as Equatorial Guinea.

Irene Haas, an analyst with Wunderlich Securities, said the company also showed positive results with its extended reach, lateral wells that were improving the company’s efficiency in the Niobrara formation. “It’s more efficient,” Haas said of the technique. “They’re a leader in it… in terms of pushing envelopes and experimenting with it.”

The company took $97 million in asset impairments — primarily for its North Sea assets — to reflect its updated estimates of abandonment costs.

The company’s revenue was up 21 percent to nearly $1.4 billion. Natural gas growth was especially strong, with revenues from that segment growing more than 80 percent to $325 million compared to the same period a year ago.

The company also reiterated plans to sell assets in offshore China at Bohai Bay.

Officials Thursday said they expect that deal to close mid-year, but declined to say how much the deal could be worth.

Already this year, Noble has announced the sale of assets in East Texas and North Louisiana as well as its Powder River Basin field in Wyoming and the  Tri-State field at the borders of Colorado, Kansas and Nebraska.


Noble Energy earnings down 23 percent Noble Energy earnings down 23 percent Reviewed by luis on 4/25/2014 Rating: 5

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