Noble Energy Beats the Street – Analyst Blog

Noble Energy Inc. (NBL) reported adjusted earnings per share of 78 cents for the first quarter of 2010, which surpassed the Zacks Consensus Estimate of 72 cents as well as the year-ago earnings of 59 cents per share. The better-than-expected results in the quarter were primarily driven by higher realized prices and lower operating costs, compared with the year-ago period.

 

Revenues recorded a strong growth of 66.2% year over year to $733 million mainly due to higher price realizations. Revenues from oil, natural gas and natural gas liquids (NGL) were $407 million (up 102%), $229 million (up 25%) and $52 million (up 148%), respectively. Realized prices for oil, natural gas and NGL averaged $74.1 per barrel (up 96%), $3.8 per thousand cubic feet (up 44%) and $45.0 per barrel (up 82%), respectively.                                             

 

Consolidated sales volumes declined 5% to 18 million barrels of oil equivalent (BOE), or 197 thousand BOE per day, primarily due to lower volumes in Equatorial Guinea and Israel, partially offset by growth in the U.S. and North Sea. Volume declines primarily stemmed from facility maintenance downtime and timing of liftings in Equatorial Guinea, coupled with lower natural gas sales in Israel.

 

Noble’s volumes rose in the U.S. supported by ongoing development activity at Wattenberg and the completion of a new well at Swordfish in the deepwater Gulf of Mexico. North Sea volumes benefited from facility enhancements at Dumbarton and the impact of the first well at Lochranza.

 

Noble’s operating expenses reduced 40.3% year over year to $515 million primarily due to lower lease expenses and absence of asset impairment charges, which existed in the year-ago quarter. Accordingly, robust sales and reduced operating expenses led to an operating income of $218 million, compared with an operating loss of $421 million in the year-ago quarter.

 

Noble ended the quarter with cash and cash equivalents of $1,031 million and long-term debt of $2,366 million, compared with $1,017 million of cash and $2,357 million of long-term debt in the year-ago period. During the quarter, the company generated $588 million of cash from operations and deployed $958 million towards capital expenditure.

 

Moving forward, Noble expects second quarter 2010 volumes to average 208−214 thousand BOE per day. For entire 2010, volumes are likely to range between 211−224 thousand BOE per day.

 

Meanwhile, the Zacks Consensus Estimate on Noble’s earnings for the second quarter of 2010 has moved up 4 cents over the past month as 3 of 14 covering analysts raised expectations while 5 moved in the opposite direction. The Zacks Consensus Estimate for 2010 also edged up a penny over the past week as 1 of 20 covering analysts increased projection while 3 moved in the opposite direction.