Noble Gets $309M from Asset Sale


Independent oil and gas producer Noble Energy Inc. (NBL) completed the sale of some of its oil and natural gas properties in the Permian Basin to Houston based oil and gas company Sheridan Holding Company II, LLC. The proceeds from the sale of assets  come to $309 million.

The deal for the sale of assets was announced in July 2012. The assets, which were sold to Sheridan Holding Company, have production capacity of roughly 1,500 barrels of oil equivalent per day.

Again, in August, Noble Energy decided to divest its Kansas oil and natural gas assets to a unit of privately owned Citation Oil & Gas Corporation for a sum of $140 million.

The decision to divest these assets is in sync with the company’s long-term strategy. Noble Energy has decided to gradually move out of its non-core properties and use the proceeds to develop its core operations. Noble’s core operations are mainly based in the U.S. with some of it in offshore Eastern Mediterranean, and offshore West Africa.

Noble Energy registered growth in the sales volume in the second quarter of 2012, with sales expanding 10.0% from the year-ago quarter to 224 thousand barrels of oil equivalent per day (MBoe/d). The company also raised its 2012 volume guidance at the midpoint by 2 MBoe/d on a pro forma basis. The new 2012 volume range is at 236 Mboe/d to 244 Mboe/d. A solid performance from existing assets will help the company to meet the enhanced expectation.

We believe the decision to concentrate more on its core operations and development of the international projects would yield the desired results as demand for oil and gas is on the rise. The Zacks Consensus Estimates for the third quarter and full-year 2012 are currently at $1.05 per share and $4.99 per share, respectively.

Noble Energy retains a Zacks #3 Rank, which translates into a short-term Hold rating. One of its peers is Anadarko Petroleum Corporation (APC).

Based in Houston, Texas, Noble Energy operates internationally and engages in the acquisition, exploration, development, production, and marketing of crude oil, natural gas and natural gas liquids.

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