Noble (NBL) Q4 Earnings Beat On Strong U.S. Onshore Growth

Noble Energy, Inc. (NYSE:NBL) incurred adjusted earnings of 32 cents per share for the fourth quarter of 2017, beating the Zacks Consensus Estimate of 4 cents by a whopping 700%.

On a GAAP basis, the company reported earnings of $1.01 per share against a loss of 59 cents in the year-ago quarter.

The difference between adjusted and GAAP figures was caused by the combined effect of loss on divestiture and undeveloped leasehold impairment, offset by a gain from divestitures.

Total Revenues

Noble Energy's total revenues increased around 18.9% year over year to $1,201 million in the fourth quarter. Reported revenues also surpassed the Zacks Consensus Estimate of $1,152 million by 4.3%.

Operational Results

In the quarter under review, sales volume averaged 380 thousand barrels of oil equivalent per day (MBoe/d), which is at the low end of the guided range of 380-390 MBoe/d. Volumes in the quarter were impacted by nearly 7 MBoe/d as a result of winter storms and third-party facility impacts in the company's Texas operations.

U.S. onshore assets are a major contributor to the total sales volume, contributing nearly 249 MBoe/d in the fourth quarter. Onshore sales volume was up 40% year over year, primarily due to solid contribution from Noble’s Eagle Ford and Delaware Basin assets.

Operating expenses in the quarter was $740 million compared with $1,373 million in the year-ago quarter, reflecting a decline of 46.1% primarily due to lower exploration expenses, Gathering, Transportation and Processing expenses and drop in depreciation, deletion and amortization.

Interest expenses in the quarter were $83 million, down 3.5% year over year.

Noble Energy’s total proved reserves at the end of 2017 were 1,965 million barrels of oil (MBoe) compared with 1,437 MBoe at the end of 2016.

Realized Prices

U.S. Onshore Realized crude oil and condensate prices in the quarter increased 15.3% to $53.83 per barrel from the year-ago level of $46.69.

U.S. Onshore Natural gas prices increased 17.1% to $2.87 per thousand cubic feet from $2.45 in the year-ago period.

U.S. Onshore Realized prices for natural gas liquids were up 40% to $27.77 per barrel.

Financial Highlights

Noble Energy's cash and cash equivalents as of Dec 31, 2017 were $675 million, down from $1,180 million as of Dec 31, 2016.

Long-term debt was $6,746 million as of Dec 31, 2017 compared with $7,011 million as of Dec 31, 2016.

Cash flow from operating activities in the quarter was $533 million, up from $297 million in the prior-year quarter.

Guidance

Noble Energy expects 2018 sales volume to be in the range of 343-353 MBoe/d. First-quarter volumes are anticipated to be between 358 MBoe/d and 368 MBoe/d. Sales volumes are expected to drop sequentially due to the impact of divestitures on the U.S. onshore (8 MBoe/d) and Tamar (3 MBoe/d).

Noble Energy expects 2018 capital expenditures to be between $2.7 and $2.9 billion, with nearly 70% percent allocated to the U.S. onshore program and over 25% to the Eastern Mediterranean.

Zacks Rank

Noble Energy carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Murphy Oil Corp. (NYSE:MUR) delivered fourth-quarter 2017 earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of 2 cents.

Occidental Petroleum Corp. (NYSE:OXY) reported fourth-quarter 2017 earnings of 41 cents per share, beating the Zacks Consensus Estimate by a penny.

Anadarko Petroleum Corp. (NYSE:APC) reported fourth-quarter 2017 adjusted earnings of 18 cents per share, beating the Zacks Consensus Estimate of 3 cents by a whopping 500%.

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