Noble Energy Provides Long-term Outlook and Highlights U.S. Onshore Portfolio
16 November 2016 - 11:00PM
Noble Energy, Inc. (NYSE:
NBL) (“Noble Energy” or
“The Company”) is hosting an investor event today to provide an
outlook through 2020 and an update on its U.S. onshore
operations. Today’s presentation includes a forward base plan
utilizing $50 per barrel WTI and Brent and $3 per thousand cubic
feet Henry Hub natural gas for 2017, with modest oil price
acceleration through 2020. An upside plan is also provided
which adds $10 per barrel in commodity price to all periods.
David L. Stover, Noble Energy’s Chairman, President and CEO,
commented, “We have made tremendous strides and significantly
enhanced our business during the past two years. Today, we
are excited to share our strong outlook for the next four
years. The high-margin growth we are outlining, led by our DJ
Basin, Delaware and Eastern Mediterranean assets, is driving cash
flows to increase at a rate of three to four times our volume
growth. Our plan is fully funded and provides for additional
opportunities or further acceleration, while also improving the
balance sheet. Delivery of our plan is building on the
momentum of significant outperformance in 2016, which is resulting
in a preliminary 2017 outlook that is dramatically improved from
original plans. The quality of our portfolio, the quality of
our teams, and our ability to execute will deliver substantial
value-added growth and enhanced company returns.”
Highlights from today’s presentation include:
2016-2020 Outcomes
- Oil volumes from the Company’s U.S. onshore assets are expected
to increase at a compound annual growth rate (CAGR) of 23 percent
in the base plan and 29 percent in the upside plan.
- U.S. onshore production grows at a 13 to 16 percent CAGR,
adjusted for divestitures.
- Total company production is expected to reach between 540 and
625 thousand barrels of oil equivalent per day (MBoe/d) in 2020, an
8 to 12 percent CAGR, adjusted for divestitures. 2020 sales volumes
assume a January startup from the Leviathan field, offshore
Israel.
- Approximately 75 percent of total Company capital is allocated
to the DJ Basin, Delaware and Eastern Mediterranean assets over the
plan period.
- Return on average capital employed(1) is anticipated to reach
between 8 and 14 percent in 2020.
U.S. Onshore Update
- The Company has identified over 7,000 gross future drilling
locations with an average lateral length of over 8,000 feet. Total
U.S. onshore net unrisked resources have increased to 7 billion
barrels of oil equivalent.
- Combined Delaware and Eagle Ford production is anticipated to
range between 165 and 195 MBoe/d by 2020, up 160 to 200 percent
from 2016 volumes. In the Delaware Basin, the Company’s Wolfcamp A
estimated ultimate recovery (EUR) per well has been raised to 1.2
million barrels of oil equivalent for a 7,500 foot lateral.
- In the DJ Basin, total sales volumes are expected to grow at an
11 to 16 percent CAGR over the plan period. Per well EURs have been
raised by an average of approximately 20 percent in the Wells
Ranch, East Pony and Mustang areas.
Preliminary 2017 Outlook
- U.S. onshore oil production is anticipated to be 15 percent
higher than 2016 on a full year basis, and 25 percent higher when
comparing the second half of 2017 versus the same period in 2016.
Total company volumes in 2017 are expected to average between 400
and 410 MBoe/d, up from 2016 after adjusting for 2016 divestment
impacts which total nearly 20 MBoe/d.
- Seventy percent of the Company’s 2017 preliminary upstream
capital expenditures are targeted for U.S. onshore activities,
primarily in the DJ Basin, Delaware, and Eagle Ford. Twenty-five
percent are planned in the Eastern Mediterranean, including costs
associated with the Tamar development well currently being drilled
and Leviathan post-sanction.
- A formal budget and capital program is expected to be finalized
early in 2017.
(1) A non-GAAP
measure, see appendix of related presentation material for
definition of this non-GAAP measure.
Investor Update Webcast
Event: Noble Energy Longer-Term Outlook
Date: Wednesday, November 16, 2016
Time: 9:00 am - 10:30 a.m. CT.
Webcast and Replay:
www.nobleenergyinc.com
The live audio webcast link and related presentation material
are accessible on the ‘Investors’ page of the Company’s website.
A replay of the event will be available at the same web
location.
Noble Energy (NYSE: NBL) is an independent oil
and natural gas exploration and production company with a
diversified high-quality portfolio of both U.S. unconventional and
global offshore conventional assets spanning three
continents. Founded more than 80 years ago, the company is
committed to safely and responsibly delivering our purpose:
Energizing the World, Bettering People’s Lives®. For more
information, visit www.nobleenergyinc.com.
This news release contains certain “forward-looking statements”
within the meaning of federal securities law. Words such as
“anticipates”, “believes”, “expects”, “intends”, “will”, “should”,
“may”, “estimates”, and similar expressions may be used to identify
forward-looking statements. Forward-looking statements are
not statements of historical fact and reflect Noble Energy’s
current views about future events. They may include estimates
of oil and natural gas reserves, estimates of future production,
assumptions regarding future oil and natural gas pricing, planned
drilling activity, future results of operations, projected cash
flow and liquidity, business strategy and other plans and
objectives for future operations. No assurances can be given
that the forward-looking statements contained in this news release
will occur as projected and actual results may differ materially
from those projected. Forward-looking statements are based on
current expectations, estimates and assumptions that involve a
number of risks and uncertainties that could cause actual results
to differ materially from those projected. These risks
include, without limitation, the volatility in commodity prices for
crude oil and natural gas, the presence or recoverability of
estimated reserves, the ability to replace reserves, environmental
risks, drilling and operating risks, exploration and development
risks, competition, government regulation or other actions, the
ability of management to execute its plans to meet its goals and
other risks inherent in Noble Energy’s business that are discussed
in its most recent annual report on Form 10-K and in other reports
on file with the Securities and Exchange Commission (“SEC”). These
reports are also available from Noble Energy’s offices or website,
http://www.nobleenergyinc.com. Forward-looking statements are
based on the estimates and opinions of management at the time the
statements are made. Noble Energy does not assume any
obligation to update forward-looking statements should
circumstances, management’s estimates, or opinions change.
The Securities and Exchange Commission requires oil and gas
companies, in their filings with the SEC, to disclose proved
reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. The
SEC permits the optional disclosure of probable and possible
reserves, however, we have not disclosed the Company's probable and
possible reserves in our filings with the SEC. We use certain terms
in this news release, such as “net unrisked resources” and “EUR” or
“estimated ultimate recovery”, which are by their nature more
speculative than estimates of proved, probable and possible
reserves and accordingly are subject to substantially greater risk
of being actually realized. The SEC guidelines strictly prohibit us
from including these estimates in filings with the SEC. Investors
are urged to consider closely the disclosures and risk factors in
our most recent annual report on Form 10-K and in other reports on
file with the SEC, available from Noble Energy's offices or
website, http://www.nobleenergyinc.com.
This news release also contains a forward-looking non-GAAP
financial measure, return on average capital employed. Due to the
forward-looking nature of the aforementioned non-GAAP financial
measure, management cannot reliably or reasonably predict certain
of the necessary components of the most directly comparable
forward-looking GAAP measure. Accordingly, we are unable to
present a quantitative reconciliation of such forward-looking
non-GAAP financial measure to its most directly comparable
forward-looking GAAP financial measure. Amounts excluded from this
non-GAAP measure in future periods could be significant. Management
believes the aforementioned non-GAAP financial measure is a good
tool for internal use and the investment community in evaluating
Noble Energy’s overall financial performance. This non-GAAP measure
is broadly used to value and compare companies in the crude oil and
natural gas industry.
Investor Contacts:
Brad Whitmarsh
(281) 943-1670
Brad.Whitmarsh@nblenergy.com
Megan Repine
(832) 639-7380
Megan.Repine@nblenergy.com
Media Contacts:
Reba Reid
(713) 412-8441
media@nblenergy.com
Paula Beasley
(281) 876-6133
media@nblenergy.com
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