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Noble Energy (NBL) Updates Guidance

December 6, 2012 7:36 AM EST Send to a Friend
Noble Energy, Inc. (NYSE: NBL) today announced its 2013 capital program and guidance, and provided updates to the fourth quarter of 2012.

Total capital expenditures are estimated at $3.9 billion for the year. The capital program allocates 60 percent to onshore U.S., six percent to the deepwater Gulf of Mexico, 15 percent to West Africa and 10 percent to the Eastern Mediterranean. Global exploration and appraisal activity is expected to receive 15 percent of the total capital.

These investments should enable 2013 sales volumes from continuing operations to average between 270 to 282 thousand barrels of oil equivalent per day (MBoe/d). The midpoint of this range represents a 20 percent increase over 2012, after adjusting for domestic property sales closed in 2012. The projected volume increase reflects a 23 percent growth in crude oil and condensate and a 16 percent growth in natural gas.

Charles D. Davidson, Noble Energy's Chairman and CEO, stated, "Noble Energy is continuing to deliver our aggressive growth plans announced last year. For a second straight year, production is projected to grow at strong double-digit rates. We have accelerated our development in the DJ Basin, which will receive the greatest portion of our capital program, as well as the drilling program in the wet gas area of the Marcellus. The Tamar project remains on target for first production in April of next year, and the schedule for the Alen project in West Africa has accelerated with first production now expected in the third quarter of next year. Exploration remains a key component of the 2013 program which will include the testing of several very material opportunities."

Within the U.S., the Company expects to invest $1.7 billion in the DJ Basin to accelerate the horizontal Niobrara drilling program to include 300 horizontal wells in 2013. Approximately 90 wells are located in Northern Colorado and another 60 will be extended-reach lateral wells focused in the oil window of Wattenberg. In the Marcellus Shale, $750 million is planned to support the drilling of 140 joint venture wells, targeting 85 operated wells in the liquids-rich area of the play. In the deepwater Gulf of Mexico, the Company expects to invest $250 million where a one-rig program is planned to conduct appraisal drilling at Gunflint and execute the exploration program.

Noble Energy's international programs in West Africa and the Eastern Mediterranean represent $500 million and $400 million, respectively. In West Africa, plans are to bring the Alen liquid development project to production and to appraise the Carla and Diega liquids discoveries. In the Eastern Mediterranean, final commissioning at Tamar will be completed by April, while other plans include a Mesozoic oil test, appraisal work and flow tests at Leviathan and additional testing of natural gas prospects.

Capital has also been allocated to New Ventures opportunities in Nevada, the Falkland Islands and Nicaragua. Excluded from the total capital amount is the $328 million final installment payment associated with the Marcellus acquisition.

Overall liquid volumes are expected to represent 46 percent of total volume in 2013 with the remaining product split estimated to be 28 percent U.S. natural gas and 26 percent international natural gas. No adjustments have been made for the potential divestiture of non-core onshore U.S. assets.

U.S. volumes are anticipated to be up about 23 percent from 2012. The Company's onshore development programs in the DJ Basin and Marcellus Shale account for the majority of this growth. The international portfolio is expected to grow 20 percent from last year, largely due to the initiation of production at Tamar and Alen.

UPDATED FOURTH QUARTER 2012 GUIDANCE

Noble Energy now expects fourth quarter 2012 sales volumes from continuing operations to be above the upper limit of its prior estimate of 248 to 252 MBoe/d. Sales volumes for the quarter are estimated to average between 252 and 256 MBoe/d, an increase of approximately 4 MBoe/d from the prior estimate. The increase is primarily a result of stronger production growth in the DJ Basin.

Exploration expense for the fourth quarter is now expected to average between $110 and $130 million, down from the prior estimate of between $160 and $200 million. The reduction is a result of successful drilling at the Carla appraisal well in Equatorial Guinea and the Big Bend discovery in the deepwater Gulf of Mexico. Drilling costs for the Scotia well offshore Falkland Islands have been placed into suspense pending further evaluation.




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