Delaware
|
73-0785597
|
(State
of incorporation)
|
(I.R.S.
employer identification number)
|
100
Glenborough Drive, Suite 100
|
|
Houston,
Texas
|
77067
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(281)
872-3100
|
|
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer
x
|
Accelerated
filer
o
|
Non-accelerated
filer
o
|
PART
I. FINANCIAL INFORMATION
|
||||||||
ITEM
1. FINANCIAL STATEMENTS
|
||||||||
Noble
Energy, Inc. and Subsidiaries
|
||||||||
Consolidated
Balance Sheets
|
||||||||
(in
thousands, except share amounts)
|
||||||||
(Unaudited)
|
||||||||
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash and cash equivalents
|
$ |
450,773
|
$ |
153,408
|
||||
Accounts receivable - trade, net
|
555,850
|
586,882
|
||||||
Deferred income taxes
|
64,337
|
99,835
|
||||||
Probable insurance claims
|
12,193
|
101,233
|
||||||
Other current assets
|
114,857
|
127,188
|
||||||
Total current assets
|
1,198,010
|
1,068,546
|
||||||
Property,
plant and equipment
|
||||||||
Oil and gas properties (successful efforts method of
accounting)
|
9,924,532
|
8,867,639
|
||||||
Other property, plant and equipment
|
93,475
|
79,646
|
||||||
10,018,007
|
8,947,285
|
|||||||
Accumulated depreciation, depletion and amortization
|
(2,292,108 | ) | (1,776,528 | ) | ||||
Total property, plant and equipment, net
|
7,725,899
|
7,170,757
|
||||||
Other
noncurrent assets
|
561,270
|
568,032
|
||||||
Goodwill
|
766,249
|
781,290
|
||||||
Total Assets
|
$ |
10,251,428
|
$ |
9,588,625
|
||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts payable - trade
|
$ |
588,453
|
$ |
518,609
|
||||
Derivative instruments
|
372,027
|
254,625
|
||||||
Income taxes
|
54,055
|
107,136
|
||||||
Short-term borrowings
|
25,000
|
-
|
||||||
Asset retirement obligations
|
15,081
|
68,500
|
||||||
Other current liabilities
|
176,579
|
235,392
|
||||||
Total current liabilities
|
1,231,195
|
1,184,262
|
||||||
Deferred income taxes
|
1,882,518
|
1,758,452
|
||||||
Asset retirement obligations
|
108,589
|
127,689
|
||||||
Derivative instruments
|
127,944
|
328,875
|
||||||
Other noncurrent liabilities
|
341,873
|
274,720
|
||||||
Long-term debt
|
1,941,018
|
1,800,810
|
||||||
Total Liabilities
|
5,633,137
|
5,474,808
|
||||||
Commitments
and Contingencies
|
||||||||
Shareholders’
Equity
|
||||||||
Preferred stock - par value $1.00; 4,000,000 shares authorized,
none
issued
|
-
|
-
|
||||||
Common stock - par value $3.33 1/3; 250,000,000 shares authorized;
190,462,250 and 188,808,087 shares issued, respectively
|
634,860
|
629,360
|
||||||
Capital in excess of par value
|
2,088,891
|
2,041,048
|
||||||
Accumulated other comprehensive loss
|
(177,023 | ) | (140,509 | ) | ||||
Treasury stock, at cost:18,580,865 and 16,574,384 shares,
respectively
|
(612,976 | ) | (511,443 | ) | ||||
Retained earnings
|
2,684,539
|
2,095,361
|
||||||
Total Shareholders’ Equity
|
4,618,291
|
4,113,817
|
||||||
Total Liabilities and Shareholders’ Equity
|
$ |
10,251,428
|
$ |
9,588,625
|
||||
The
accompanying notes are an integral part of these financial
statements
|
Noble
Energy, Inc. and Subsidiaries
|
||||||||||||||||
Consolidated
Statements of Operations
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues
|
||||||||||||||||
Oil and gas sales
|
$ |
746,258
|
$ |
683,544
|
$ |
2,140,218
|
$ |
2,044,656
|
||||||||
Income from equity method investees
|
45,371
|
33,810
|
139,904
|
108,901
|
||||||||||||
Other revenues
|
22,182
|
23,965
|
70,447
|
72,339
|
||||||||||||
Total Revenues
|
813,811
|
741,319
|
2,350,569
|
2,225,896
|
||||||||||||
Costs
and Expenses
|
||||||||||||||||
Lease operating costs
|
81,767
|
76,928
|
243,205
|
238,307
|
||||||||||||
Production and ad valorem taxes
|
26,752
|
30,697
|
80,667
|
83,663
|
||||||||||||
Transportation costs
|
13,260
|
4,531
|
40,346
|
18,463
|
||||||||||||
Exploration costs
|
45,794
|
30,904
|
144,796
|
92,327
|
||||||||||||
Depreciation, depletion and amortization
|
195,266
|
165,765
|
540,453
|
458,878
|
||||||||||||
General and administrative
|
49,518
|
40,657
|
142,368
|
113,716
|
||||||||||||
Accretion of discount on asset retirement obligations
|
1,909
|
2,426
|
6,337
|
8,405
|
||||||||||||
Interest, net of amount capitalized
|
29,247
|
28,556
|
87,105
|
95,642
|
||||||||||||
Loss (gain) on derivative instruments
|
1,514
|
(6,315 | ) | (557 | ) |
389,723
|
||||||||||
Loss (gain) on sale of assets
|
1,684
|
(200,676 | ) | (4,381 | ) | (211,691 | ) | |||||||||
Loss on involuntary conversion
|
-
|
-
|
51,406
|
-
|
||||||||||||
Other expense, net
|
23,823
|
22,880
|
78,594
|
89,008
|
||||||||||||
Total Costs and Expenses
|
470,534
|
196,353
|
1,410,339
|
1,376,441
|
||||||||||||
Income
Before Taxes
|
343,277
|
544,966
|
940,230
|
849,455
|
||||||||||||
Income
Tax Provision
|
120,602
|
226,902
|
296,638
|
336,009
|
||||||||||||
Net
Income
|
$ |
222,675
|
$ |
318,064
|
$ |
643,592
|
$ |
513,446
|
||||||||
Earnings
Per Share
|
||||||||||||||||
Basic
|
$ |
1.30
|
$ |
1.80
|
$ |
3.76
|
$ |
2.91
|
||||||||
Diluted
|
$ |
1.28
|
$ |
1.75
|
$ |
3.72
|
$ |
2.85
|
||||||||
Weighted
average number of shares outstanding
|
||||||||||||||||
Basic
|
171,123
|
176,218
|
170,953
|
176,505
|
||||||||||||
Diluted
|
173,350
|
181,077
|
173,156
|
180,158
|
||||||||||||
The
accompanying notes are an integral part of these financial
statements
|
Noble
Energy, Inc. and Subsidiaries
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(in
thousands)
|
||||||||
(Unaudited)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2007
|
2006
|
|||||||
Cash
Flows From Operating Activities
|
||||||||
Net
income
|
$ |
643,592
|
$ |
513,446
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation, depletion and amortization - oil and gas
production
|
540,453
|
458,878
|
||||||
Depreciation, depletion and amortization - electricity
generation
|
10,558
|
11,842
|
||||||
Dry hole expense
|
47,769
|
24,164
|
||||||
Impairment of operating assets
|
3,661
|
6,359
|
||||||
Amortization of unproved leasehold costs
|
12,700
|
15,180
|
||||||
Stock-based compensation expense
|
20,040
|
9,320
|
||||||
Gain on sale of assets
|
(4,381 | ) | (211,691 | ) | ||||
Deferred income taxes
|
192,137
|
146,709
|
||||||
Accretion of discount on asset retirement obligations
|
6,337
|
8,405
|
||||||
Increase in allowance for doubtful accounts
|
10,780
|
10,564
|
||||||
Income from equity method investees
|
(139,904 | ) | (108,901 | ) | ||||
Dividends from equity method investees
|
153,331
|
18,000
|
||||||
Deferred compensation expense
|
23,089
|
15,673
|
||||||
(Gain) loss on derivative instruments
|
(133,580 | ) |
430,328
|
|||||
Loss on involuntary conversion
|
51,406
|
-
|
||||||
Other
|
6,861
|
(17,657 | ) | |||||
Changes
in operating assets and liabilities, net of acquisition:
|
||||||||
Decrease (increase) in accounts receivable - trade
|
20,984
|
(41,222 | ) | |||||
(Increase) decrease in other current assets
|
(2,733 | ) |
13,479
|
|||||
Decrease in probable insurance claims
|
94,695
|
101,612
|
||||||
Decrease in accounts payable
|
(11,875 | ) | (29,246 | ) | ||||
Decrease in other current liabilities
|
(225,309 | ) | (34,429 | ) | ||||
Net
Cash Provided by Operating Activities
|
1,320,611
|
1,340,813
|
||||||
Cash
Flows From Investing Activities
|
||||||||
Additions to property, plant and equipment
|
(1,017,702 | ) | (1,030,430 | ) | ||||
U.S. Exploration acquisition, net of cash acquired
|
-
|
(412,257 | ) | |||||
Proceeds from sales of assets
|
-
|
504,259
|
||||||
Investments in equity method investees
|
-
|
(5,126 | ) | |||||
Distributions from equity method investees
|
2,100
|
116,521
|
||||||
Net
Cash Used in Investing Activities
|
(1,015,602 | ) | (827,033 | ) | ||||
Cash
Flows From Financing Activities
|
||||||||
Exercise of stock options
|
19,381
|
50,576
|
||||||
Tax benefits from stock-based awards
|
13,922
|
18,534
|
||||||
Cash dividends paid
|
(54,414 | ) | (35,776 | ) | ||||
Purchases of treasury stock
|
(101,533 | ) | (192,632 | ) | ||||
Proceeds from credit facility
|
280,000
|
300,000
|
||||||
Repayment of credit facility
|
(165,000 | ) | (605,000 | ) | ||||
Repayment of term loans
|
-
|
(105,000 | ) | |||||
Net proceeds from short term borrowings
|
-
|
35,000
|
||||||
Net
Cash Used in Financing Activities
|
(7,644 | ) | (534,298 | ) | ||||
Increase
(Decrease) in Cash and Cash Equivalents
|
297,365
|
(20,518 | ) | |||||
Cash
and Cash Equivalents at Beginning of Period
|
153,408
|
110,321
|
||||||
Cash
and Cash Equivalents at End of Period
|
$ |
450,773
|
$ |
89,803
|
||||
The
accompanying notes are an integral part of these financial
statements
|
Noble
Energy, Inc. and Subsidiaries
|
||||||||||||||||||||||||||||||||
Consolidated
Statements of Shareholders' Equity
|
||||||||||||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Deferred
|
Accumulated
|
|||||||||||||||||||||||||||||||
Capital
in
|
Compensation
-
|
Other
|
Treasury
|
Total
|
||||||||||||||||||||||||||||
Common
Stock
|
Excess
of
|
Restricted
|
Comprehensive
|
Stock
|
Retained
|
Shareholders'
|
||||||||||||||||||||||||||
Shares
|
Amount
|
Par
Value
|
Stock
|
Loss
|
at
Cost
|
Earnings
|
Equity
|
|||||||||||||||||||||||||
December
31, 2006
|
188,808
|
$ |
629,360
|
$ |
2,041,048
|
$ |
-
|
$ | (140,509 | ) | $ | (511,443 | ) | $ |
2,095,361
|
$ |
4,113,817
|
|||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
643,592
|
643,592
|
||||||||||||||||||||||||
Stock-based compensation
expense
|
-
|
-
|
20,040
|
-
|
-
|
-
|
-
|
20,040
|
||||||||||||||||||||||||
Exercise
of stock options
|
1,128
|
3,760
|
15,621
|
-
|
-
|
-
|
-
|
19,381
|
||||||||||||||||||||||||
Tax
benefits from stock-based awards
|
-
|
-
|
13,922
|
-
|
-
|
-
|
-
|
13,922
|
||||||||||||||||||||||||
Restricted
stock grants, net
|
526
|
1,740
|
(1,740 | ) |
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Dividends
($0.315 per share)
|
-
|
-
|
-
|
-
|
-
|
-
|
(54,414 | ) | (54,414 | ) | ||||||||||||||||||||||
Purchases
of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(101,533 | ) |
-
|
(101,533 | ) | ||||||||||||||||||||||
Oil
and gas cash flow hedges:
|
||||||||||||||||||||||||||||||||
Realized
amounts reclassified into earnings
|
-
|
-
|
-
|
-
|
5,180
|
-
|
-
|
5,180
|
||||||||||||||||||||||||
Unrealized
change in fair value
|
-
|
-
|
-
|
-
|
(44,006 | ) |
-
|
-
|
(44,006 | ) | ||||||||||||||||||||||
Net
change in other
|
-
|
-
|
-
|
-
|
2,312
|
-
|
-
|
2,312
|
||||||||||||||||||||||||
September
30, 2007
|
190,462
|
$ |
634,860
|
$ |
2,088,891
|
$ |
-
|
$ | (177,023 | ) | $ | (612,976 | ) | $ |
2,684,539
|
$ |
4,618,291
|
|||||||||||||||
December
31, 2005
|
184,894
|
$ |
616,311
|
$ |
1,945,239
|
$ | (5,288 | ) | $ | (783,499 | ) | $ | (148,476 | ) | $ |
1,465,857
|
$ |
3,090,144
|
||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
513,446
|
513,446
|
||||||||||||||||||||||||
Adoption
of SFAS 123(R), net of tax
|
-
|
-
|
(5,288 | ) |
5,288
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Stock-based
compensation expense
|
-
|
-
|
9,320
|
-
|
-
|
-
|
-
|
9,320
|
||||||||||||||||||||||||
Exercise
of stock options
|
2,815
|
9,382
|
41,194
|
-
|
-
|
-
|
-
|
50,576
|
||||||||||||||||||||||||
Tax
benefits from stock-based awards
|
-
|
-
|
18,534
|
-
|
-
|
-
|
-
|
18,534
|
||||||||||||||||||||||||
Restricted
stock grants, net
|
64
|
217
|
(217 | ) |
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Dividends
($0.20 per share)
|
-
|
-
|
-
|
-
|
-
|
-
|
(35,776 | ) | (35,776 | ) | ||||||||||||||||||||||
Rabbi
trust shares sold
|
-
|
-
|
7,837
|
-
|
-
|
24,005
|
-
|
31,842
|
||||||||||||||||||||||||
Purchases
of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(192,632 | ) |
-
|
(192,632 | ) | ||||||||||||||||||||||
Oil
and gas cash flow hedges:
|
||||||||||||||||||||||||||||||||
Realized
amounts reclassifed into earnings
|
-
|
-
|
-
|
-
|
136,546
|
-
|
-
|
136,546
|
||||||||||||||||||||||||
Unrealized
change in fair value
|
-
|
-
|
-
|
-
|
197,239
|
-
|
-
|
197,239
|
||||||||||||||||||||||||
Unrealized
amounts reclassified into earnings
|
-
|
-
|
-
|
-
|
264,265
|
-
|
-
|
264,265
|
||||||||||||||||||||||||
Net
change in other
|
-
|
-
|
-
|
-
|
533
|
-
|
-
|
533
|
||||||||||||||||||||||||
September
30, 2006
|
187,773
|
$ |
625,910
|
$ |
2,016,619
|
$ |
-
|
$ | (184,916 | ) | $ | (317,103 | ) | $ |
1,943,527
|
$ |
4,084,037
|
|||||||||||||||
The
accompanying notes are an integral part of these financial
statements
|
Noble
Energy, Inc. and Subsidiaries
|
||||||||||||||||
Consolidated
Statements of Comprehensive Income
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
income
|
$ |
222,675
|
$ |
318,064
|
$ |
643,592
|
$ |
513,446
|
||||||||
Other
items of comprehensive income (loss)
|
||||||||||||||||
Oil
and gas cash flow hedges:
|
||||||||||||||||
Realized amounts reclassified into earnings
|
12,324
|
43,798
|
8,302
|
219,035
|
||||||||||||
Less tax provision
|
(4,634 | ) | (16,494 | ) | (3,122 | ) | (82,489 | ) | ||||||||
Unrealized change in fair value
|
11,804
|
274,361
|
(70,523 | ) |
266,483
|
|||||||||||
Less
tax provision
|
(4,438 | ) | (87,952 | ) |
26,517
|
(69,244 | ) | |||||||||
Unrealized amounts reclassified into earnings
|
-
|
-
|
-
|
423,910
|
||||||||||||
Less tax provision
|
-
|
-
|
-
|
(159,645 | ) | |||||||||||
Net
change in other:
|
186
|
354
|
3,705
|
855
|
||||||||||||
Less tax provision
|
(70 | ) | (134 | ) | (1,393 | ) | (322 | ) | ||||||||
Other
comprehensive income (loss)
|
15,172
|
213,933
|
(36,514 | ) |
598,583
|
|||||||||||
Comprehensive
income
|
$ |
237,847
|
$ |
531,997
|
$ |
607,078
|
$ |
1,112,029
|
||||||||
The
accompanying notes are an integral part of these financial
statements
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Other
Current Assets
|
||||||||
Derivative
instruments
|
$ |
20,282
|
$ |
35,242
|
||||
Materials
and supplies inventories
|
62,399
|
46,973
|
||||||
Prepaid
expenses and other current assets
|
32,176
|
44,973
|
||||||
Total
|
$ |
114,857
|
$ |
127,188
|
||||
Other
Noncurrent Assets
|
||||||||
Equity
method investments
|
$ |
358,940
|
$ |
373,372
|
||||
Mutual
fund investments
|
125,860
|
116,314
|
||||||
Probable
insurance claims
|
40,846
|
46,500
|
||||||
Derivative
instruments
|
5,172
|
2,862
|
||||||
Other
noncurrent assets
|
30,452
|
28,984
|
||||||
Total
|
$ |
561,270
|
$ |
568,032
|
||||
Other
Current Liabilities
|
||||||||
Accrued
and other current liabilities
|
$ |
151,292
|
$ |
219,885
|
||||
Interest
payable
|
25,287
|
15,507
|
||||||
Total
|
$ |
176,579
|
$ |
235,392
|
||||
Other
Noncurrent Liabilities
|
||||||||
Deferred
compensation liability
|
$ |
207,825
|
$ |
173,253
|
||||
Accrued
benefit costs
|
57,850
|
58,491
|
||||||
Other
noncurrent liabilities
|
76,198
|
42,976
|
||||||
Total
|
$ |
341,873
|
$ |
274,720
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Other
Revenues
|
||||||||||||||||
Electricity
sales
|
$ |
16,616
|
$ |
16,241
|
$ |
53,745
|
$ |
49,672
|
||||||||
Gathering,
marketing and processing
|
5,566
|
7,724
|
16,702
|
22,667
|
||||||||||||
Total
|
$ |
22,182
|
$ |
23,965
|
$ |
70,447
|
$ |
72,339
|
||||||||
Other
Expense, net
|
||||||||||||||||
Electricity
generation
|
$ |
13,679
|
$ |
17,876
|
$ |
41,941
|
$ |
43,099
|
||||||||
Gathering,
marketing and processing
|
4,100
|
4,204
|
13,093
|
15,674
|
||||||||||||
Deferred
compensation expense
|
8,423
|
933
|
23,089
|
15,673
|
||||||||||||
Impairment
of operating assets
|
3,661
|
-
|
3,661
|
6,359
|
||||||||||||
Other
|
(6,040 | ) | (133 | ) | (3,190 | ) |
8,203
|
|||||||||
Total
|
$ |
23,823
|
$ |
22,880
|
$ |
78,594
|
$ |
89,008
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Ineffectiveness
(gains) losses
|
$ |
1,514
|
$ | (2,957 | ) | $ | (557 | ) | $ |
8,384
|
||||||
Reclassified
from AOCL
|
-
|
-
|
-
|
423,910
|
||||||||||||
Mark-to-market
gain on derivative instruments not accounted for as cash flow
hedges
|
-
|
(3,358 | ) |
-
|
(42,571 | ) | ||||||||||
Loss
(gain) on derivative instruments
|
$ |
1,514
|
$ | (6,315 | ) | $ | (557 | ) | $ |
389,723
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Increase
(decrease) in natural gas sales
|
$ |
47,973
|
$ |
2,588
|
$ |
120,057
|
$ | (59,348 | ) | |||||||
Decrease
in crude oil sales
|
(60,297 | ) | (46,386 | ) | (128,359 | ) | (159,687 | ) | ||||||||
Total
decrease in oil and gas sales
|
$ | (12,324 | ) | $ | (43,798 | ) | $ | (8,302 | ) | $ | (219,035 | ) |
Natural
Gas
|
Crude
Oil
|
|||||||||||||||
Average
Price
|
Average
price
|
|||||||||||||||
Production
Period
|
MMBtupd
|
per
MMBtu
|
Bopd
|
per
Bbl
|
||||||||||||
October
- December 2007 (NYMEX)
|
170,000
|
$ |
5.97
|
17,100
|
$ |
38.74
|
||||||||||
2008
(NYMEX)
|
170,000
|
5.66
|
16,500
|
38.23
|
Natural
Gas
|
||||||||
Average
|
||||||||
Differential
|
||||||||
Production
Period
|
MMBtupd
|
per
MMBtu
|
||||||
October
- December 2007 (CIG (1) vs.
NYMEX)
|
100,000
|
$ |
2.02
|
|||||
October
- December 2007 (ANR (2)
vs.
NYMEX)
|
30,000
|
1.17
|
||||||
October
- December 2007 (PEPL (3)
vs.
NYMEX)
|
10,000
|
1.11
|
||||||
2008
(CIG vs. NYMEX)
|
100,000
|
1.66
|
||||||
2008
(ANR vs. NYMEX)
|
40,000
|
1.01
|
||||||
2008
(PEPL vs. NYMEX)
|
10,000
|
0.98
|
||||||
(1)
|
Colorado
Interstate Gas - Northern
System
|
(2)
|
ANR
Oklahoma Pipeline
|
(3)
|
Panhandle
Eastern Pipe Line
|
Natural
Gas
|
Crude
Oil
|
|||||||||||||||||||||||
Average
price
|
Average
price
|
|||||||||||||||||||||||
per
MMBtu
|
per
Bbl
|
|||||||||||||||||||||||
Production
Period
|
MMBtupd
|
Floor
|
Ceiling
|
Bopd
|
Floor
|
Ceiling
|
||||||||||||||||||
October
- December 2007 (NYMEX)
|
-
|
$ |
-
|
$ |
-
|
2,700
|
$ |
60.00
|
$ |
74.30
|
||||||||||||||
October
- December 2007 (CIG)
|
12,000
|
6.50
|
9.50
|
-
|
-
|
-
|
||||||||||||||||||
October
- December 2007 (Dated Brent)
|
-
|
-
|
-
|
5,565
|
45.00
|
70.29
|
||||||||||||||||||
2008
(NYMEX)
|
-
|
-
|
-
|
3,100
|
60.00
|
72.40
|
||||||||||||||||||
2008
(CIG)
|
14,000
|
6.75
|
8.70
|
-
|
-
|
-
|
||||||||||||||||||
2008
(Dated Brent)
|
-
|
-
|
-
|
4,074
|
45.00
|
66.52
|
||||||||||||||||||
2009
(NYMEX)
|
-
|
-
|
-
|
3,700
|
60.00
|
70.00
|
||||||||||||||||||
2009
(CIG)
|
15,000
|
6.00
|
9.90
|
-
|
-
|
-
|
||||||||||||||||||
2009
(Dated Brent)
|
-
|
-
|
-
|
3,074
|
45.00
|
63.04
|
||||||||||||||||||
2010
(NYMEX)
|
-
|
-
|
-
|
3,500
|
55.00
|
73.80
|
||||||||||||||||||
2010
(CIG)
|
15,000
|
6.25
|
8.10
|
-
|
-
|
-
|
Retirement
& Restoration
|
Medical
& Life
|
|||||||||||||||
Plan
Benefits
|
Plan
Benefits
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||
Service
cost
|
$ |
2,579
|
$ |
2,400
|
$ |
468
|
$ |
420
|
||||||||
Interest
cost
|
2,536
|
2,224
|
307
|
296
|
||||||||||||
Expected
return on plan assets
|
(2,898 | ) | (2,046 | ) |
-
|
-
|
||||||||||
Transition
obligation recognition
|
60
|
60
|
-
|
-
|
||||||||||||
Amortization
of prior service cost
|
(129 | ) | (114 | ) | (231 | ) | (246 | ) | ||||||||
Recognized
net actuarial loss
|
560
|
420
|
204
|
320
|
||||||||||||
Net
periodic benefit cost
|
$ |
2,708
|
$ |
2,944
|
$ |
748
|
$ |
790
|
||||||||
Nine
Months Ended September 30,
|
||||||||||||||||
Service
cost
|
$ |
8,753
|
$ |
8,406
|
$ |
1,472
|
$ |
1,692
|
||||||||
Interest
cost
|
7,484
|
6,736
|
893
|
986
|
||||||||||||
Expected
return on plan assets
|
(8,284 | ) | (6,027 | ) |
-
|
-
|
||||||||||
Transition
obligation recognition
|
180
|
180
|
-
|
-
|
||||||||||||
Amortization
of prior service cost
|
(387 | ) | (66 | ) | (695 | ) | (489 | ) | ||||||||
Recognized
net actuarial loss
|
2,516
|
1,660
|
790
|
868
|
||||||||||||
Net
periodic benefit cost
|
$ |
10,262
|
$ |
10,889
|
$ |
2,460
|
$ |
3,057
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Stock-based
compensation expense
|
$ |
7,962
|
$ |
2,997
|
$ |
20,040
|
$ |
9,320
|
||||||||
Tax
benefit from expense recognized
|
2,994
|
1,129
|
7,535
|
3,510
|
Nine
Months Ended
|
||||
September
30, 2007
|
||||
(in
thousands)
|
||||
Asset
retirement obligations at December 31, 2006
|
$ |
196,189
|
||
Liabilities
incurred in current period
|
5,926
|
|||
Liabilities
settled in current period
|
(163,226 | ) | ||
Revisions
|
78,444
|
|||
Accretion
expense
|
6,337
|
|||
Asset
retirement obligations at September 30, 2007
|
$ |
123,670
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Equity
method investments:
|
||||||||
Atlantic
Methanol Production Company, LLC ("AMPCO") (45% interest)
|
$ |
204,091
|
$ |
211,325
|
||||
Alba
Plant LLC ("Alba Plant") (27.8% interest)
|
140,501
|
146,051
|
||||||
Other
|
14,348
|
15,996
|
||||||
Total
equity method investments
|
$ |
358,940
|
$ |
373,372
|
September
30,
|
December
31,
|
|||||||||||||||
2007
|
2006
|
|||||||||||||||
(in
thousands)
|
||||||||||||||||
Balance
sheet information:
|
||||||||||||||||
Current
assets
|
$ |
262,330
|
$ |
252,201
|
||||||||||||
Noncurrent
assets
|
839,524
|
857,465
|
||||||||||||||
Current
liabilities
|
165,987
|
171,028
|
||||||||||||||
Noncurrent
liabilities
|
2,181
|
2,385
|
||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Statements
of operations information:
|
||||||||||||||||
Operating
revenues
|
$ |
218,584
|
$ |
179,087
|
$ |
641,897
|
$ |
533,949
|
||||||||
Less
cost of goods sold
|
57,309
|
55,157
|
161,606
|
145,900
|
||||||||||||
Gross
margin
|
161,275
|
123,930
|
480,291
|
388,049
|
||||||||||||
Less
other expense, net
|
8,488
|
9,993
|
28,977
|
36,654
|
||||||||||||
Less
income tax expense
|
8,966
|
1,956
|
27,598
|
18,795
|
||||||||||||
Net
income
|
$ |
143,821
|
$ |
111,981
|
$ |
423,716
|
$ |
332,600
|
2007
|
2006
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Net
|
Average
|
Net
|
Average
|
|||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||
Net
income available to common shareholders and weighted average
shares outstanding
|
$ |
222,675
|
171,123
|
$ |
318,064
|
176,218
|
||||||||||
Basic
EPS
|
$ |
1.30
|
$ |
1.80
|
||||||||||||
Net
income available to common shareholders and weighted average
shares outstanding
|
$ |
222,675
|
171,123
|
$ |
318,064
|
176,218
|
||||||||||
Plus
incremental shares from assumed conversions:
|
||||||||||||||||
Dilutive
stock options
|
-
|
1,983
|
-
|
3,198
|
||||||||||||
Dilutive
restricted stock
|
-
|
244
|
-
|
141
|
||||||||||||
Dilutive
rabbi trust shares
|
-
|
-
|
$ | (708 | ) |
1,520
|
||||||||||
Adjusted
net income and shares
|
$ |
222,675
|
173,350
|
$ |
317,356
|
181,077
|
||||||||||
Diluted
EPS
|
$ |
1.28
|
$ |
1.75
|
||||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||
Net
income available to common shareholders and weighted average shares
outstanding
|
$ |
643,592
|
170,953
|
$ |
513,446
|
176,505
|
||||||||||
Basic
EPS
|
$ |
3.76
|
$ |
2.91
|
||||||||||||
Net
income available to common shareholders and weighted average shares
outstanding
|
$ |
643,592
|
170,953
|
$ |
513,446
|
176,505
|
||||||||||
Plus
incremental shares from assumed conversions:
|
||||||||||||||||
Dilutive
stock options
|
-
|
2,008
|
-
|
3,508
|
||||||||||||
Dilutive
restricted stock
|
-
|
195
|
-
|
145
|
||||||||||||
Adjusted
net income and shares
|
$ |
643,592
|
173,156
|
$ |
513,446
|
180,158
|
||||||||||
Diluted
EPS
|
$ |
3.72
|
$ |
2.85
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Current
|
$ |
31,981
|
$ |
127,252
|
$ |
104,501
|
$ |
189,300
|
||||||||
Deferred
|
88,621
|
99,650
|
192,137
|
146,709
|
||||||||||||
Total
income tax provision
|
$ |
120,602
|
$ |
226,902
|
$ |
296,638
|
$ |
336,009
|
Other
Int'l
|
||||||||||||||||||||||||
North
|
West
|
Corporate
&
|
||||||||||||||||||||||
Consolidated
|
America
|
Africa
|
North
Sea
|
Israel
|
Marketing
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Three
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ |
768,440
|
$ |
397,148
|
$ |
97,893
|
$ |
121,774
|
$ |
35,626
|
$ |
115,999
|
||||||||||||
Intersegment
revenue
|
-
|
60,201
|
-
|
-
|
-
|
(60,201 | ) | |||||||||||||||||
Income
from equity method investees
|
45,371
|
-
|
45,371
|
-
|
-
|
-
|
||||||||||||||||||
Total
Revenues
|
813,811
|
457,349
|
143,264
|
121,774
|
35,626
|
55,798
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
195,266
|
143,574
|
8,716
|
29,741
|
5,178
|
8,057
|
||||||||||||||||||
Loss
on derivative instruments
|
1,514
|
1,514
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Income
(loss) before taxes
|
343,277
|
181,291
|
112,273
|
77,536
|
27,957
|
(55,780 | ) | |||||||||||||||||
Three
Months Ended September 30, 2006
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ |
707,509
|
$ |
406,173
|
$ |
85,498
|
$ |
26,082
|
$ |
30,451
|
$ |
159,305
|
||||||||||||
Intersegment
revenue
|
-
|
99,549
|
-
|
-
|
-
|
(99,549 | ) | |||||||||||||||||
Income
from equity method investees
|
33,810
|
-
|
33,810
|
-
|
-
|
-
|
||||||||||||||||||
Total
Revenues
|
741,319
|
505,722
|
119,308
|
26,082
|
30,451
|
59,756
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
165,765
|
146,010
|
5,353
|
2,603
|
4,115
|
7,684
|
||||||||||||||||||
Gain
on derivative instruments
|
(6,315 | ) | (6,315 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||
Income
(loss) before taxes
|
544,966
|
435,432
|
107,206
|
15,707
|
24,785
|
(38,164 | ) | |||||||||||||||||
Other
Int'l
|
||||||||||||||||||||||||
North
|
West
|
Corporate
&
|
||||||||||||||||||||||
Consolidated
|
America
|
Africa
|
North
Sea
|
Israel
|
Marketing
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ |
2,210,665
|
$ |
1,209,760
|
$ |
283,168
|
$ |
239,104
|
$ |
84,937
|
$ |
393,696
|
||||||||||||
Intersegment
revenue
|
-
|
227,141
|
-
|
-
|
-
|
(227,141 | ) | |||||||||||||||||
Income
from equity method investees
|
139,904
|
-
|
139,904
|
-
|
-
|
-
|
||||||||||||||||||
Total
Revenues
|
2,350,569
|
1,436,901
|
423,072
|
239,104
|
84,937
|
166,555
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
540,453
|
427,861
|
18,731
|
56,849
|
13,011
|
24,001
|
||||||||||||||||||
Gain
on derivative instruments
|
(557 | ) | (557 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||
Loss
on involuntary conversion
|
51,406
|
51,406
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Income
(loss) before taxes
|
940,230
|
558,784
|
338,082
|
137,057
|
65,132
|
(158,825 | ) | |||||||||||||||||
Nine
Months Ended September 30, 2006
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ |
2,116,995
|
$ |
1,097,212
|
$ |
306,870
|
$ |
88,723
|
$ |
68,441
|
$ |
555,749
|
||||||||||||
Intersegment
revenue
|
-
|
372,656
|
-
|
-
|
-
|
(372,656 | ) | |||||||||||||||||
Income
from equity method investees
|
108,901
|
-
|
108,901
|
-
|
-
|
-
|
||||||||||||||||||
Total
Revenues
|
2,225,896
|
1,469,868
|
415,771
|
88,723
|
68,441
|
183,093
|
||||||||||||||||||
Depreciation,
depletion and amortization
|
458,878
|
402,033
|
15,674
|
5,933
|
10,367
|
24,871
|
||||||||||||||||||
Loss
on derivative instruments
|
389,723
|
389,723
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Income
(loss) before taxes
|
849,455
|
484,655
|
373,490
|
59,250
|
52,851
|
(120,791 | ) | |||||||||||||||||
Total
assets at September 30, 2007 (1)
|
$ |
10,251,428
|
$ |
7,515,385
|
$ |
1,222,046
|
$ |
476,729
|
$ |
265,026
|
$ |
772,242
|
||||||||||||
Total
assets at December 31, 2006
(1)
|
9,588,625
|
7,224,920
|
960,357
|
343,236
|
256,913
|
803,199
|
(1)
|
North
America includes goodwill of $766 million and $781 million at September
30, 2007 and December 31, 2006,
respectively.
|
Nine
Months Ended
|
||||
September
30, 2007
|
||||
(in
thousands)
|
||||
Capitalized
exploratory well costs at beginning of period
|
$ |
80,359
|
||
Additions
to capitalized exploratory well costs pending determination of
proved reserves
|
145,575
|
|||
Reclassified
to proved oil and gas properties based on determination of proved
reserves
|
(4,595 | ) | ||
Capitalized
exploratory well costs charged to expense
|
(6,454 | ) | ||
Capitalized
exploratory well costs at end of period
|
$ |
214,885
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Capitalized
exploratory well costs that have been capitalized for a period of one
year or less
|
$ |
174,602
|
$ |
58,493
|
||||
Capitalized
exploratory well costs that have been capitalized for a period
greater than one year after completion of drilling
|
40,283
|
21,866
|
||||||
Balance
at end of period
|
$ |
214,885
|
$ |
80,359
|
||||
Number
of projects that have exploratory well costs that have been capitalized
for a period greater than one
|
||||||||
year
after completion of drilling
|
2
|
4
|
|
·
|
net
income of $223 million and diluted earnings per share of $1.28,
as
compared with net income of $318 million and diluted earnings per
share of
$1.75 for third quarter 2006 (which included the sale of our Gulf
of
Mexico shelf assets); and
|
|
·
|
cash
flow from operating activities of $548 million, as compared with
$407
million for third quarter
2006.
|
|
·
|
oil
discovery on Benita appraisal well on Block I, offshore Equatorial
Guinea;
|
|
·
|
successful
appraisal well (Belinda) on Block O, offshore Equatorial
Guinea;
|
|
·
|
exploration
success at the YoYo prospect on PH-77 license, offshore
Cameroon;
|
|
·
|
continued
ramp-up of Dumbarton oil production in the North
Sea;
|
|
·
|
record
quarterly natural gas production in Israel;
and
|
|
·
|
increasing
natural gas sales to a liquefied natural gas (“LNG”) plant in Equatorial
Guinea.
|
|
·
|
production
contributions from the sale of natural gas from the Alba field in
Equatorial Guinea to an LNG
facility;
|
|
·
|
the
contribution of production from the Dumbarton North Sea
development;
|
|
·
|
growing
natural gas sales in Israel due to the planned conversion of additional
power plants to use natural gas as
fuel;
|
|
·
|
growing
production from the Piceance Basin and the Niobrara Trend areas in
the Northern region of our North America operations, where we are
continuing active drilling
programs;
|
|
·
|
a
full year of production from our acquisition of U.S.
Exploration;
|
|
·
|
partially
offset by loss of production from Gulf of Mexico shelf assets sold
in
July 2006, natural field decline in the Gulf Coast area and
specific well performance in the deepwater Gulf of
Mexico.
|
|
·
|
infrastructure
development in Israel;
|
|
·
|
potential
hurricane-related volume curtailments in the Gulf of Mexico and
Gulf Coast
areas;
|
|
·
|
potential
winter storm-related volume curtailments in the Northern region
of our
North America operations;
|
|
·
|
potential
pipeline and processing facility capacity constraints in the Rocky
Mountain area of our Northern
region;
|
|
·
|
seasonal
rainfall variations in Ecuador that affect our natural gas-to-power
project;
|
|
·
|
natural
gas volume curtailments in Equatorial Guinea due to LNG plant repairs;
and
|
|
·
|
timing
of capital expenditures, as discussed below, which are expected
to result
in near-term production.
|
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Total
cash provided by (used in):
|
||||||||
Operating activities
|
$ |
1,320,611
|
$ |
1,340,813
|
||||
Investing activities
|
(1,015,602 | ) | (827,033 | ) | ||||
Financing activities
|
(7,644 | ) | (534,298 | ) | ||||
Increase (decrease) in cash and cash equivalents
|
$ |
297,365
|
$ | (20,518 | ) |
|
·
|
cash
flows from higher liquid commodity prices;
and
|
|
·
|
dividends
from equity method investees, which had been classified as investing
cash
flows in 2006 (See Item 2. Results of Operations – Equity Method
Investees);
|
|
·
|
a
decrease in non-cash working capital resulting from decreases in
the
current portions of asset retirement obligations and other accrued
liabilities; and
|
|
·
|
an
increase in exploration costs, general and administrative expense
and
transportation costs.
|
|
·
|
a
slight decrease in capital expenditures during 2007 as compared to
2006;
|
|
·
|
a
decrease in acquisition and divestiture activity during 2007 as compared
to the acquisition of U.S. Exploration and sale of our Gulf of Mexico
shelf assets during 2006; and
|
|
·
|
a
decrease in distributions received from equity method investees for
2007
as compared to 2006 (See Item 2. Results of Operations – Equity Method
Investees).
|
|
·
|
a
net increase in cash from short-term and long-term borrowings in
2007 as
compared with a net decrease from short-term and long-term borrowing
repayments in 2006; and
|
|
·
|
a
reduction of cash used for repurchases of our common stock during
the
first nine months of 2007 as compared with the first nine months
of
2006.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Acquisition,
Capital and Other Exploration Expenditures
|
||||||||||||||||
Lease
acquisition of unproved property
|
$ |
1,892
|
$ |
-
|
$ |
93,346
|
$ |
130,819
|
||||||||
Lease
acquisition of proved property
|
116
|
-
|
5,703
|
412,687
|
||||||||||||
Exploration
expenditures
|
97,407
|
51,819
|
249,973
|
192,896
|
||||||||||||
Development
expenditures
|
344,870
|
328,218
|
841,888
|
825,481
|
||||||||||||
Corporate
and other expenditures
|
4,847
|
5,866
|
23,662
|
15,948
|
||||||||||||
Total
|
$ |
449,132
|
$ |
385,903
|
$ |
1,214,572
|
$ |
1,577,831
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||
September
30,
|
September
30,
|
|||||||
2007
|
2006
|
2007
|
2006
|
|||||
(in
thousands)
|
||||||||
Natural
gas sales
|
$ 296,360
|
$ 290,845
|
$ 935,364
|
$ 917,673
|
2007
|
2006
|
|||||||||||||||
Mcfpd
|
$/Mcf
|
Mcfpd
|
$/Mcf
|
|||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||
North
America (1)
|
404,238
|
$ |
6.77
|
430,072
|
$ |
6.41
|
||||||||||
West
Africa (2)
(3)
|
207,501
|
0.27
|
40,498
|
0.39
|
||||||||||||
North
Sea
|
5,496
|
7.26
|
8,553
|
6.62
|
||||||||||||
Israel
|
131,115
|
2.95
|
116,718
|
2.84
|
||||||||||||
Ecuador
(4)
|
24,844
|
-
|
20,131
|
-
|
||||||||||||
Other
International
|
-
|
-
|
198
|
1.51
|
||||||||||||
Total
|
773,194
|
$ |
4.30
|
616,170
|
$ |
5.30
|
||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||
North
America (1)
|
410,083
|
$ |
7.42
|
461,843
|
$ |
6.55
|
||||||||||
West
Africa (2)
(3)
|
126,820
|
0.29
|
44,232
|
0.38
|
||||||||||||
North
Sea
|
5,967
|
6.05
|
8,460
|
8.13
|
||||||||||||
Israel
|
110,675
|
2.81
|
91,656
|
2.74
|
||||||||||||
Ecuador
(4)
|
25,571
|
-
|
22,764
|
-
|
||||||||||||
Other
International
|
-
|
-
|
324
|
1.20
|
||||||||||||
Total
|
679,116
|
$ |
5.24
|
629,279
|
$ |
5.54
|
(1)
|
Average
realized sales prices include the effects of hedging activities.
Hedging
activities resulted in increases (reductions) per Mcf of $1.29
and $0.07
for third quarter 2007 and 2006, respectively, and $1.07 and $(0.47)
for
the first nine months of 2007 and 2006,
respectively.
|
(2)
|
Natural
gas from the Alba field in Equatorial Guinea is under contract
for $0.25
per MMBtu to a methanol plant, an LPG plant and an LNG plant. The
price on
an Mcf basis has been adjusted to reflect Btu content. The methanol
and
LPG plants are owned by affiliated entities accounted for under
the equity
method of accounting. The volumes sold by the LPG plant are
included in the table below under crude oil
information.
|
(3)
|
Equatorial
Guinea natural gas volumes include sales to an LNG plant of 154,637
Mcfpd
for third quarter 2007 and 72,010 Mcfpd for the first nine months
of
2007. There were no natural gas sales to the LNG plant in
2006.
|
(4)
|
The
natural gas-to-power project in Ecuador is 100% owned by our subsidiaries
and intercompany natural gas sales are eliminated for accounting
purposes.
Electricity sales of $54 million and $50 million are included in
other
revenues for the first nine months of 2007 and 2006,
respectively.
|
|
·
|
sales
of natural gas to an LNG facility in Equatorial
Guinea;
|
|
·
|
a
full nine months of production from U.S. Exploration properties and
successful development activity in the Northern region of our North
America operations; and
|
|
·
|
a
full nine months of sales to Israeli Electric Company’s Reading power
plant in Tel Aviv, as well as increased seasonal demand for
electricity;
|
|
·
|
reduction
due to sale of our Gulf of Mexico shelf assets in
2006;
|
|
·
|
a
temporary decline in production due to third party processing downtime
and
inclement weather in the Northern region of our North America
operations;
|
|
·
|
natural
field decline in the Gulf Coast area;
and
|
|
·
|
declining
performance and storm shut-in in the deepwater Gulf of
Mexico.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Crude
oil sales
|
$ |
449,898
|
$ |
392,699
|
$ |
1,204,854
|
$ |
1,126,983
|
2007
|
2006
|
|||||||||||||||||||||||
Production
(1)
|
Sales
|
Production
(1)
|
Sales
|
|||||||||||||||||||||
Bopd
|
Bopd
|
$/Bbl
|
Bopd
|
Bopd
|
$/Bbl
|
|||||||||||||||||||
Three
Months Ended September 30,
|
||||||||||||||||||||||||
North
America (2)
|
39,992
|
39,992
|
$ |
55.85
|
48,193
|
48,193
|
$ |
56.84
|
||||||||||||||||
West
Africa
(3)
|
15,327
|
13,757
|
73.25
|
17,324
|
13,649
|
66.93
|
||||||||||||||||||
North
Sea
|
15,722
|
16,644
|
77.13
|
3,675
|
3,292
|
68.90
|
||||||||||||||||||
Other
International
|
6,630
|
6,578
|
55.55
|
7,783
|
6,825
|
56.96
|
||||||||||||||||||
Total
Consolidated Operations
|
77,671
|
76,971
|
63.53
|
76,975
|
71,959
|
59.32
|
||||||||||||||||||
Equity
Investees
(4)
|
7,949
|
7,472
|
57.24
|
7,994
|
8,932
|
48.88
|
||||||||||||||||||
Total
|
85,620
|
84,443
|
$ |
62.98
|
84,969
|
80,891
|
$ |
58.17
|
||||||||||||||||
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
North
America (2)
|
43,525
|
43,525
|
$ |
51.04
|
45,834
|
45,834
|
$ |
51.48
|
||||||||||||||||
West
Africa
(3)
|
15,874
|
14,936
|
66.97
|
17,790
|
17,374
|
63.73
|
||||||||||||||||||
North
Sea
|
11,954
|
11,926
|
70.41
|
3,867
|
3,619
|
70.79
|
||||||||||||||||||
Other
International
|
7,043
|
6,998
|
50.30
|
7,338
|
7,463
|
54.31
|
||||||||||||||||||
Total
Consolidated Operations
|
78,396
|
77,385
|
57.03
|
74,829
|
74,290
|
55.57
|
||||||||||||||||||
Equity
Investees
(4)
|
8,220
|
7,862
|
50.93
|
7,503
|
8,168
|
46.96
|
||||||||||||||||||
Total
|
86,616
|
85,247
|
$ |
56.47
|
82,332
|
82,458
|
$ |
54.72
|
(1) | The variance between production and sales volumes is attributable to the timing of liquid hydrocarbon tanker liftings. |
(2)
|
Average
realized sales prices include the effects of hedging activities.
Hedging
activities resulted in reductions per Bbl of $15.64 and $10.46 for
third
quarter 2007 and 2006, respectively, and $10.57 and $12.76 for the
first
nine months of 2007 and 2006,
respectively.
|
(3)
|
Average
realized sales prices include the effects of hedging activities.
Hedging
activities resulted in reductions per Bbl of $2.18 for third quarter
2007
and $0.68 for the first nine months of
2007.
|
(4)
|
Volumes
represent our share of sales of condensate and LPG from the Alba
plant in
Equatorial Guinea. LPG volumes were 5,530 Bpd and 6,957 Bpd for third
quarter 2007 and 2006, respectively, and 5,907 Bopd and 6,409 Bopd
for the
first nine months of 2007 and 2006,
respectively.
|
|
·
|
contribution
of Dumbarton North Sea development;
|
|
·
|
a
full nine months of production from U.S. Exploration properties;
and
|
|
·
|
successful
development activity in the Northern region of our North America
operations;
|
|
·
|
reduction
due to sale our of Gulf of Mexico shelf assets in
2006;
|
|
·
|
timing
of liftings in Equatorial Guinea;
|
|
·
|
temporary
decline in production due to inclement weather in the Northern
region;
|
|
·
|
natural
field decline in the Gulf Coast area;
and
|
|
·
|
declining
performance and storm shut-in in the deepwater Gulf of
Mexico.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
income (in thousands):
|
||||||||||||||||
AMPCO
and affiliates
|
$ |
14,649
|
$ |
3,302
|
$ |
50,404
|
$ |
27,415
|
||||||||
Alba
Plant
|
$ |
30,722
|
$ |
30,508
|
$ |
89,500
|
$ |
81,486
|
||||||||
Distributions/Dividends
(in thousands):
|
||||||||||||||||
AMPCO
and affiliates
|
$ |
17,513
|
$ |
-
|
$ |
59,920
|
$ |
19,500
|
||||||||
Alba
Plant
|
$ |
40,975
|
$ |
39,001
|
$ |
95,511
|
$ |
115,021
|
||||||||
Sales
volumes:
|
||||||||||||||||
Methanol
(Kgal)
|
43,541
|
18,769
|
116,792
|
85,233
|
||||||||||||
Condensate
(Bopd)
|
1,942
|
1,975
|
1,955
|
1,759
|
||||||||||||
LPG
(Bpd)
|
5,530
|
6,957
|
5,907
|
6,409
|
||||||||||||
Production
volumes:
|
||||||||||||||||
Condensate
(Bopd)
|
1,815
|
1,811
|
1,896
|
1,726
|
||||||||||||
LPG
(Bpd)
|
6,134
|
6,183
|
6,324
|
5,777
|
||||||||||||
Average
realized prices:
|
||||||||||||||||
Methanol
(per gallon)
|
$ |
0.80
|
$ |
0.83
|
$ |
0.96
|
$ |
0.83
|
||||||||
Condensate
(per Bbl)
|
$ |
77.91
|
$ |
69.46
|
$ |
69.63
|
$ |
67.51
|
||||||||
LPG
(per Bbl)
|
$ |
49.98
|
$ |
43.03
|
$ |
44.75
|
$ |
41.32
|
North
|
West
|
Other
Int'l /
|
||||||||||||||||||||||
Consolidated
|
America
|
Africa
|
North
Sea
|
Israel
|
Corporate(2)
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Three
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Oil
and gas operating costs (1)
|
$ |
77,283
|
$ |
50,007
|
$ |
7,483
|
$ |
10,697
|
$ |
2,615
|
$ |
6,481
|
||||||||||||
Workover
and repair expense
|
4,484
|
4,460
|
-
|
-
|
-
|
24
|
||||||||||||||||||
Lease
operating expense
|
81,767
|
54,467
|
7,483
|
10,697
|
2,615
|
6,505
|
||||||||||||||||||
Production
and ad valorem taxes
|
26,752
|
21,389
|
-
|
-
|
-
|
5,363
|
||||||||||||||||||
Transportation
costs
|
13,260
|
10,111
|
-
|
2,859
|
-
|
290
|
||||||||||||||||||
Total
production costs
|
$ |
121,779
|
$ |
85,967
|
$ |
7,483
|
$ |
13,556
|
$ |
2,615
|
$ |
12,158
|
||||||||||||
Three
Months Ended September 30, 2006
|
||||||||||||||||||||||||
Oil
and gas operating costs (1)
|
$ |
66,431
|
$ |
50,753
|
$ |
6,310
|
$ |
3,355
|
$ |
2,134
|
$ |
3,879
|
||||||||||||
Workover
and repair expense
|
10,497
|
10,453
|
-
|
-
|
-
|
44
|
||||||||||||||||||
Lease
operating expense
|
76,928
|
61,206
|
6,310
|
3,355
|
2,134
|
3,923
|
||||||||||||||||||
Production
and ad valorem taxes
|
30,697
|
22,636
|
-
|
-
|
-
|
8,061
|
||||||||||||||||||
Transportation
costs
|
4,531
|
3,358
|
-
|
952
|
-
|
221
|
||||||||||||||||||
Total
production costs
|
$ |
112,156
|
$ |
87,200
|
$ |
6,310
|
$ |
4,307
|
$ |
2,134
|
$ |
12,205
|
||||||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Oil
and gas operating costs (1)
|
$ |
228,672
|
$ |
155,980
|
$ |
25,014
|
$ |
23,954
|
$ |
6,896
|
$ |
16,828
|
||||||||||||
Workover
and repair expense
|
14,533
|
14,327
|
-
|
-
|
-
|
206
|
||||||||||||||||||
Lease
operating expense
|
243,205
|
170,307
|
25,014
|
23,954
|
6,896
|
17,034
|
||||||||||||||||||
Production
and ad valorem taxes
|
80,667
|
65,933
|
-
|
-
|
-
|
14,734
|
||||||||||||||||||
Transportation
costs
|
40,346
|
31,887
|
-
|
7,091
|
-
|
1,368
|
||||||||||||||||||
Total
production costs
|
$ |
364,218
|
$ |
268,127
|
$ |
25,014
|
$ |
31,045
|
$ |
6,896
|
$ |
33,136
|
||||||||||||
Nine
Months Ended September 30, 2006
|
||||||||||||||||||||||||
Oil
and gas operating costs (1)
|
$ |
195,550
|
$ |
147,357
|
$ |
21,760
|
$ |
7,998
|
$ |
6,389
|
$ |
12,046
|
||||||||||||
Workover
and repair expense
|
42,757
|
42,628
|
-
|
-
|
-
|
129
|
||||||||||||||||||
Lease
operating expense
|
238,307
|
189,985
|
21,760
|
7,998
|
6,389
|
12,175
|
||||||||||||||||||
Production
and ad valorem taxes
|
83,663
|
66,373
|
-
|
-
|
-
|
17,290
|
||||||||||||||||||
Transportation
costs
|
18,463
|
14,022
|
-
|
3,843
|
-
|
598
|
||||||||||||||||||
Total
production costs
|
$ |
340,433
|
$ |
270,380
|
$ |
21,760
|
$ |
11,841
|
$ |
6,389
|
$ |
30,063
|
(1) | Oil and gas operating costs include labor, fuel, repairs, replacements, saltwater disposal and other related lifting costs. |
(2)
|
Other
international includes Ecuador, China, and
Argentina.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Oil
and gas operating costs
|
$ |
4.08
|
$ |
4.14
|
$ |
4.40
|
$ |
4.00
|
||||||||
Workover
and repair expense
|
0.24
|
0.65
|
0.28
|
0.87
|
||||||||||||
Lease
operating expense
|
4.32
|
4.79
|
4.68
|
4.87
|
||||||||||||
Production
and ad valorem taxes
|
1.41
|
1.91
|
1.55
|
1.71
|
||||||||||||
Transportation
costs
|
0.70
|
0.28
|
0.78
|
0.38
|
||||||||||||
Total
production costs
(1)
|
$ |
6.43
|
$ |
6.98
|
$ |
7.01
|
$ |
6.96
|
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity
method
investees. The sales volumes include natural gas sales to the Equatorial
Guinea LNG plant that began late first quarter of 2007. The inclusion
of
these volumes reduced the unit rates by $0.92 per BOE and $0.47 per
BOE
for the three and nine months ending September 30, 2007,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
DD&A
expense (in thousands)
|
$ |
195,266
|
$ |
165,765
|
$ |
540,453
|
$ |
458,878
|
||||||||
Unit
rate per BOE sales volume (1)
|
$ |
10.31
|
$ |
10.32
|
$ |
10.39
|
$ |
9.38
|
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity
method
investees. The sales volumes include natural gas sales to the Equatorial
Guinea LNG plant that began late first quarter of 2007. The inclusion
of
these volumes reduced the unit rates by $1.20 per BOE and $0.57 per
BOE
for the three and nine months ending September 30, 2007,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
G&A
expense (in thousands)
|
$ |
49,518
|
$ |
40,657
|
$ |
142,368
|
$ |
113,716
|
||||||||
Unit
rate per BOE sales volume (1)
|
$ |
2.61
|
$ |
2.53
|
$ |
2.74
|
$ |
2.32
|
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity
method
investees. The sales volumes include natural gas sales to the Equatorial
Guinea LNG plant that began late first quarter of 2007. The inclusion
of
these volumes reduced the unit rates by $0.38 per BOE and $0.18 per
BOE
for the three and nine months ending September 30, 2007,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Income
tax provision (in thousands)
|
$ |
120,602
|
$ |
226,902
|
$ |
296,638
|
$ |
336,009
|
||||||||
Effective
rate
|
35.1 | % | 41.6 | % | 31.5 | % | 39.6 | % |
|
·
|
our
growth strategies;
|
|
·
|
our
ability to successfully and economically explore for and develop
crude oil
and natural gas resources;
|
|
·
|
anticipated
trends in our business;
|
|
·
|
our
future results of operations;
|
|
·
|
our
liquidity and ability to finance our exploration and development
activities;
|
|
·
|
market
conditions in the oil and gas
industry;
|
|
·
|
our
ability to make and integrate acquisitions;
and
|
|
·
|
the
impact of governmental regulation.
|
|
|
NOBLE
ENERGY, INC.
|
|
||
|
|
|
(Registrant)
|
|
|
|
|
|
|
||
|
|
|
|
||
Date
|
October
31, 2007
|
|
/s/
CHRIS TONG
|
|
|
|
|
CHRIS
TONG
|
|||
|
|
Senior
Vice President and Chief Financial
Officer
|
Exhibit
|
|
|
Number
|
|
Exhibit
|
|
|
|
31.1
|
|
Certification
of the Company’s Chief Executive Officer Pursuant To Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
|
|
|
|
31.2
|
|
Certification
of the Company’s Chief Financial Officer Pursuant To Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
|
|
|
|
32.1
|
|
Certification
of the Company’s Chief Executive Officer Pursuant To Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
|
|
|
|
32.2
|
|
Certification
of the Company’s Chief Financial Officer Pursuant To Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
1350).
|