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Noble Energy (NBL) Slips into Q3 Loss, Ups Output Guidance

Zacks Equity Research

Noble Energy, Inc. NBL reported an adjusted loss of 21 cents per share in the third quarter of 2015, wider than the Zacks Consensus Estimate of a loss of 15 cents. The company reported earnings of 28 cents in the prior-year quarter.

Noble Energy Inc. - Earnings Surprise | FindTheBest


On a GAAP basis, the company incurred a loss of 67 cents per share as against earnings of $1.14 a year ago. The variance between adjusted and GAAP figures was due to the combined impact of loss on commodity derivative instruments, deferred compensation, corporate restructuring, pension plan expenses, Rosetta Merger expenses and other adjustments.

Total Revenue

Noble Energy's total revenues of $801 million missed the Zacks Consensus Estimate of $952 million by 15.8% in the third quarter. Revenues also plunged around 36.8% year over year.

Operational Results

In the quarter under review, sales volume averaged 379 thousand barrels of oil equivalent per day (MBoe/d), an increase of 25.5% year over year. U.S. sales volume constituted 67% of total sales, while international volume accounted for the balance. In the U.S., the Denver/Julesburg (DJ) Basin, the Marcellus Shale and internationally Israeli assets were the prime volume drivers.

Noble Energy's total operating expenses during the quarter increased 22% year over year to around $1,268 million mainly due to higher transportation and gathering expenses, depreciation, depletion and amortization expenses and other operating expenses.

Interest expenses in the reported quarter were $71 million, up 36.5% year over year.

Realized Prices

Realized crude oil and condensate prices in the quarter sunk 54.7% to $43.30 per barrel from $95.55 per barrel in the year-ago period owing to lower prices in both domestic and international markets.

Natural gas realizations also decreased 23.3% year over year to $2.50 per thousand cubic feet (Mcf).

Realized prices for natural gas liquids plunged 74.6% year over year to $7.49 per barrel.

Financial Highlights

Noble Energy's cash and cash equivalents as of Sep 30, 2015, were $1.03 billion compared with $1.18 billion as of Dec 31, 2014.

Long-term debts as of Sep 30, 2015, were $8.03 billion, up from $6.10 billion as of Dec 31, 2014.

Cash flow from operating activities in the quarter was $520 million compared with $945 million in the third quarter of 2014.

The company’s capital expenditure in the third quarter was $693 million compared with $1,395 million a year ago.

Guidance

Noble Energy increased its sales volume projection from the prior guidance of 375 to 400 MBoe/dto 385 to 405 MBoe/dfor the fourth quarter of 2015.

For 2015, the company plans to invest slightly below $3 billion in capital expenditure.

Other Upcoming Releases

Devon Energy Corp. DVN plans to report third-quarter 2015 results on Nov 3, 2015. The Zacks Consensus Estimate is pegged at 57 cents.

Cimarex Energy Co. XEC plans to report third-quarter 2015 results on Nov 3, 2015. The Zacks Consensus Estimate is at a loss of 9 cents.

Apache Corp. APA plans to report third-quarter 2015 results on Nov 5, 2015. The Zacks Consensus Estimate is at a loss of 38 cents.

Zacks Rank

Noble Energy carries a Zacks Rank #2 (Buy).

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