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Noble Energy's (NBL) Global Assets to Aid Q2 Earnings Beat

Zacks Equity Research

Noble Energy Inc. (NBL) is slated to release its second quarter 2014 financial results before the market bell on Jul 24, 2014. The company posted a positive earnings surprise of 9.33% in the preceding quarter. Let’s see how things are shaping up prior to this announcement.

Growth Factors this Quarter

Noble Energy’s high quality global portfolio will help it to sustain strong oil and gas production levels. Noble not only has a strong presence in the U.S. Denver-Julesburg Basin and Marcellus but also records robust volumes in the Tamar filed in Israel and in West Africa. This will ensure a bottom-line beat at this Houston-based independent exploration and production company.   

During the quarter, Noble Energy signed lucrative long-term gas supply contracts with customers in Egypt and Jordan. Per the contract, natural gas will be supplied from Noble’s Tamar fields, which will further strengthen its position in the Eastern Mediterranean region.

In June this year, Noble Energy expanded its operation in the deepwater Gulf of Mexico by acquiring a 50% interest in 17 deepwater exploration leases from BP plc (BP).  Each of the leases is in the Atwater Valley protraction area. The acquisition builds upon Noble’s already strong presence in the GoM.

Noble’s four recent discoveries, two each in the deepwater Gulf of Mexico and in the Eastern Mediterranean, are an outcome of its systematic capital expenditure program. In addition, its decision to form a midstream MLP with CONSOL Energy (CNX) will help it to cater to the oil and gas boom in the Marcellus Shale.

Earnings Whispers

Our proven model conclusively shows that Noble Energy is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is the case here.

Positive ESP:  This is because the Most Accurate estimate stands at 81 cents while the Zacks Consensus Estimate is 80 cents per share, resulting in +1.25% ESP.

Zacks Rank #3: Noble Energy’s Zacks Rank #3 combined with a +1.25% ESP indicates that the company is going to beat the earnings forecast this quarter

Other Stocks to Consider

Here are some other companies in the oil and gas space having the right combination of elements to post an earnings beat this quarter.

Clayton Williams Energy, Inc. (CWEI) has an earnings ESP of +4.96% and carries a Zacks Rank #1 (Strong Buy).

EOG Resources, Inc. (EOG) has an earnings ESP of +3.01% and carries a Zacks Rank #2 (Buy).

Read the Full Research Report on BP
Read the Full Research Report on CNX
Read the Full Research Report on NBL
Read the Full Research Report on EOG
Read the Full Research Report on CWEI

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