Noble Energy Inc. (NBL) sold certain non-core Mid-Continent and Illinois basin assets for $552 million to an affiliate of Citation Oil & Gas.
The assets represented approximately 5.7 thousand barrels of oil equivalent per day (Mboe/d) of production and 29 million barrels of oil equivalent (MMboe) of reserves.
Due to the asset sale, Noble Energy expects volume to reduce by over 2 Mboe/d, resulting in a volume of 211–217 Mboe/d for full year 2010. For the third quarter of 2010, Nobel Energy expects average daily sales volumes to be between 212 and 220 MBoe/d. Total sales volume in the second quarter was 219 MBoe/d, up 6% year over year.
The asset sale will also lower per barrel lease operating expenses in full year 2010 by approximately 10%. Per barrel lease operating expenses in the second quarter of 2010 were $5.18, up 0.2% year over year.
The company, however, continues to expand its onshore resource base. Noble Energy estimates that its U.S. onshore asset base has the capacity to grow production by 50%+ from 2009 through 2015.
In March 2010, Nobel Energy acquired all of the US Rockies upstream assets of Petro-Canada Resources (USA) Inc. and Suncor Energy (SU). The acquisitions added approximately 10 Mboe/d to the company’s daily production base and approximately 46 MMboe of proved reserves.
The Zacks Consensus Estimate for third-quarter 2010 is 83 cents per share. For full years 2010 and 2011, the Zacks Consensus Estimates are $3.44 per share and $4.44 per share, respectively.
We maintain our “Neutral” recommendation on Noble Energy. The quantitative Zacks #3 Rank (‘Hold’) for the company indicates no clear directional pressure on shares over the near term.
Based in Houston, Texas, Noble Energy Inc., through its subsidiaries, engages in the exploration, development, production, and marketing of crude oil and natural gas in the United States and internationally.
NOBLE ENERGY (NBL): Free Stock Analysis Report
SUNCOR ENERGY (SU): Free Stock Analysis Report
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