Noble's (NBL) Assets Sale Likely To Strengthen Balance Sheet

Noble Energy (NYSE:NBL) has returned 24.8%, outperforming the industry's rally of 15.4% in the last six months. Capital investment, solid production from Noble Energy’s organic and inorganic assets, cost reduction and higher demand from both international and domestic assets, are driving results.

Nearly 70% of its planned capital expenditure for 2018 was directed toward the development of U.S onshore assets. The higher number of wells brought online in the DJ Basin, Eagle Ford and Delaware area will increase production volumes, and U.S. onshore production is expected to contribute in excess of 71% of total production. Thanks to the expected robust performance from its high-quality assets, Noble Energy expects its 2018 total production to improve 12% after adjusting for divestiture.

Noble Energy continues to divest its non-core assets to focus on core assets. The net proceeds helped the company to lower its debt levels, interest burden and thereby strengthen balance sheet.

The assets of Noble Energy in the Eastern Mediterranean region are well placed to tap the rising demand for natural gas. The company expects its gain to multiply when Leviathan project comes online in 2019.

Marketability of Noble Energy’s production from its core geographical areas depends upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities, majority of which is not owned by the company and does not have a direct control over the midstream services. Lack of required infrastructure can adversely impact its operations and cash flows.

Noble Energy has a Zacks Rank #3 (Hold). Investors can consider a few better-ranked stocks from the same industry that include Concho Resources Inc. (NYSE:CXO) , Pioneer Natural Resources Company (NYSE:PXD) and Energen Corporation (NYSE:EGN) , each sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Concho Resources reported an average positive earnings surprise of 48.89% in the last four quarters. Its 2018 and 2019 earnings estimates moved up 23.3% and 23.6%, respectively, in the last 30 days.

Pioneer Natural Resources reported an average positive earnings surprise of 66.92% in the trailing four quarters. Its 2018 and 2019 earnings estimates moved up 51.6% and 33.7%, respectively, in the last 30 days.

Energen Corporation reported an average positive earnings surprise of 19.67% in the last four quarters. Its 2018 and 2019 earnings estimates moved up 24.1% and 21.4%, respectively, over the last 30 days.

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