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)
|
Large
accelerated filer [X]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Smaller
reporting company [ ]
|
(Do
not check if a smaller reporting
company)
|
PART I. FINANCIAL INFORMATION | ||||||||||||||||
ITEM 1. FINANCIAL STATEMENTS | ||||||||||||||||
Noble Energy, Inc. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenues
|
||||||||||||||||
Oil,
gas and NGL sales
|
$ | 1,040 | $ | 746 | $ | 3,115 | $ | 2,140 | ||||||||
Income
from equity method investees
|
40 | 46 | 158 | 140 | ||||||||||||
Other
revenues
|
18 | 22 | 55 | 70 | ||||||||||||
Total
|
1,098 | 814 | 3,328 | 2,350 | ||||||||||||
Costs
and Expenses
|
||||||||||||||||
Lease
operating expense
|
98 | 82 | 268 | 243 | ||||||||||||
Production
and ad valorem taxes
|
47 | 27 | 141 | 81 | ||||||||||||
Transportation
expense
|
14 | 13 | 43 | 40 | ||||||||||||
Exploration
expense
|
39 | 46 | 181 | 145 | ||||||||||||
Depreciation,
depletion and amortization
|
194 | 197 | 593 | 547 | ||||||||||||
General
and administrative
|
63 | 49 | 184 | 142 | ||||||||||||
Other
operating expense, net
|
97 | 24 | 136 | 106 | ||||||||||||
Total
|
552 | 438 | 1,546 | 1,304 | ||||||||||||
Operating
Income
|
546 | 376 | 1,782 | 1,046 | ||||||||||||
Other
(Income) Expense
|
||||||||||||||||
(Gain)
loss on commodity derivative instruments
|
(875 | ) | 2 | 190 | (1 | ) | ||||||||||
Interest,
net of amount capitalized
|
18 | 29 | 52 | 87 | ||||||||||||
Other
(income) expense, net
|
(51 | ) | 2 | (33 | ) | 20 | ||||||||||
Total
|
(908 | ) | 33 | 209 | 106 | |||||||||||
Income
Before Income Taxes
|
1,454 | 343 | 1,573 | 940 | ||||||||||||
Income
Tax Provision
|
480 | 120 | 528 | 296 | ||||||||||||
Net
Income
|
$ | 974 | $ | 223 | $ | 1,045 | $ | 644 | ||||||||
Earnings
Per Share
|
||||||||||||||||
Basic
|
$ | 5.64 | $ | 1.30 | $ | 6.06 | $ | 3.76 | ||||||||
Diluted
|
$ | 5.37 | $ | 1.28 | $ | 5.86 | $ | 3.72 | ||||||||
Weighted
average number of shares outstanding
|
||||||||||||||||
Basic
|
173 | 171 | 172 | 171 | ||||||||||||
Diluted
|
176 | 173 | 176 | 173 | ||||||||||||
The
accompanying notes are an integral part of these financial
statements.
|
||||||||||||||||
Noble
Energy, Inc. and Subsidiaries
|
||||||||
Consolidated
Balance Sheets
|
||||||||
(in
millions, except share amounts)
|
||||||||
(Unaudited)
|
||||||||
September
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 992 | $ | 660 | ||||
Accounts
receivable - trade, net
|
641 | 594 | ||||||
Other
current assets
|
236 | 315 | ||||||
Total
current assets
|
1,869 | 1,569 | ||||||
Property,
plant and equipment
|
||||||||
Oil
and gas properties (successful efforts method of
accounting)
|
11,769 | 10,217 | ||||||
Other
property, plant and equipment
|
158 | 112 | ||||||
Total
property, plant and equipment
|
11,927 | 10,329 | ||||||
Accumulated
depreciation, depletion and amortization
|
(2,946 | ) | (2,384 | ) | ||||
Total
property, plant and equipment, net
|
8,981 | 7,945 | ||||||
Goodwill
|
759 | 761 | ||||||
Other
noncurrent assets
|
507 | 556 | ||||||
Total
Assets
|
$ | 12,116 | $ | 10,831 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable - trade
|
$ | 646 | $ | 781 | ||||
Commodity
derivative instruments
|
189 | 540 | ||||||
Other
current liabilities
|
541 | 315 | ||||||
Total
current liabilities
|
1,376 | 1,636 | ||||||
Deferred
income taxes
|
2,169 | 1,984 | ||||||
Asset
retirement obligations
|
147 | 131 | ||||||
Commodity
derivative instruments
|
69 | 83 | ||||||
Other
noncurrent liabilities
|
299 | 337 | ||||||
Long-term
debt
|
2,051 | 1,851 | ||||||
Total
Liabilities
|
6,111 | 6,022 | ||||||
Commitments
and Contingencies
|
||||||||
Shareholders’
Equity
|
||||||||
Preferred
stock - par value $1.00; 4 million shares authorized, none
issued
|
- | - | ||||||
Common
stock - par value $3.33 1/3; 250 million shares authorized; 192
million and 191 million shares issued, respectively
|
641 | 636 | ||||||
Capital
in excess of par value
|
2,182 | 2,106 | ||||||
Accumulated
other comprehensive loss
|
(129 | ) | (284 | ) | ||||
Treasury
stock, at cost; 19 million shares
|
(614 | ) | (613 | ) | ||||
Retained
earnings
|
3,925 | 2,964 | ||||||
Total
Shareholders’ Equity
|
6,005 | 4,809 | ||||||
Total
Liabilities and Shareholders’ Equity
|
$ | 12,116 | $ | 10,831 | ||||
The
accompanying notes are an integral part of these financial
statements.
|
Noble
Energy, Inc. and Subsidiaries
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
(in
millions)
|
||||||||
(unaudited)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows From Operating Activities
|
||||||||
Net
income
|
$ | 1,045 | $ | 644 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation,
depletion and amortization
|
593 | 547 | ||||||
Dry
hole expense
|
78 | 48 | ||||||
Deferred
income taxes
|
173 | 192 | ||||||
Income
from equity method investees
|
(158 | ) | (140 | ) | ||||
Dividends
received from equity method investees
|
192 | 153 | ||||||
Unrealized
(gain) on commodity derivative instruments
|
(9 | ) | (1 | ) | ||||
Settlement
of previously recognized hedge losses
|
(144 | ) | (133 | ) | ||||
Loss
on involuntary conversion
|
9 | 51 | ||||||
Impairment
of operating assets
|
38 | 4 | ||||||
Allowance
for doubtful accounts
|
47 | 11 | ||||||
Other
|
12 | 69 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
decrease in accounts receivable, trade
|
(94 | ) | 21 | |||||
(Increase)
decrease in other current assets
|
(19 | ) | 92 | |||||
(Decrease)
in accounts payable
|
(135 | ) | (12 | ) | ||||
Increase
(decrease) in other current liabilities
|
239 | (225 | ) | |||||
Net
Cash Provided by Operating Activities
|
1,867 | 1,321 | ||||||
Cash
Flows From Investing Activities
|
||||||||
Additions
to property, plant and equipment
|
(1,852 | ) | (1,017 | ) | ||||
Proceeds
from property sales
|
131 | - | ||||||
Distributions
from equity method investees
|
- | 2 | ||||||
Net
Cash Used in Investing Activities
|
(1,721 | ) | (1,015 | ) | ||||
Cash
Flows From Financing Activities
|
||||||||
Exercise
of stock options
|
26 | 19 | ||||||
Excess
tax benefits from stock-based awards
|
23 | 14 | ||||||
Cash
dividends paid
|
(84 | ) | (54 | ) | ||||
Purchases
of treasury stock
|
(2 | ) | (102 | ) | ||||
Proceeds
from credit facility
|
650 | 280 | ||||||
Repayment
of credit facility
|
(425 | ) | (165 | ) | ||||
Repayment
of installment notes
|
(25 | ) | - | |||||
Proceeds
from short term borrowings
|
23 | - | ||||||
Net
Cash Provided by (Used in) Financing Activities
|
186 | (8 | ) | |||||
Increase
in Cash and Cash Equivalents
|
332 | 298 | ||||||
Cash
and Cash Equivalents at Beginning of Period
|
660 | 153 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 992 | $ | 451 | ||||
The
accompanying notes are an integral part of these financial
statements.
|
Noble
Energy, Inc. and Subsidiaries
|
|||||||||||||||||||||||||
Consolidated
Statements of Shareholders' Equity
|
|||||||||||||||||||||||||
(in
millions)
|
|||||||||||||||||||||||||
(unaudited)
|
|||||||||||||||||||||||||
Accumulated
|
|||||||||||||||||||||||||
Shares of Stock |
Capital
in
|
Other
|
Treasury
|
Total
|
|||||||||||||||||||||
Common
|
Treasury
|
Common
|
Excess
of
|
Comprehensive
|
Stock
|
Retained
|
Shareholders'
|
||||||||||||||||||
Stock
|
Stock
|
Stock
|
Par
Value
|
Loss
|
at
Cost
|
Earnings
|
Equity
|
||||||||||||||||||
December
31, 2007
|
191 | 19 | $ | 636 | $ | 2,106 | $ | (284 | ) | $ | (613 | ) | $ | 2,964 | $ | 4,809 | |||||||||
Net
income
|
- | - | - | - | - | - | 1,045 | 1,045 | |||||||||||||||||
Stock-based
compensation expense
|
- | - | - | 30 | - | - | - | 30 | |||||||||||||||||
Exercise
of stock options
|
1 | - | 4 | 22 | - | - | - | 26 | |||||||||||||||||
Tax
benefits related to exercise of stock options
|
- | - | - | 23 | - | - | - | 23 | |||||||||||||||||
Restricted
stock awards, net
|
- | - | 1 | (1 | ) | - | - | - | - | ||||||||||||||||
Dividends
($0.48 per share)
|
- | - | - | - | - | - | (84 | ) | (84 | ) | |||||||||||||||
Changes
in treasury stock, net
|
- | - | - | 2 | - | (1 | ) | - | 1 | ||||||||||||||||
Oil
and gas cash flow hedges:
|
|||||||||||||||||||||||||
Realized
amounts reclassified into earnings
|
- | - | - | - | 155 | - | - | 155 | |||||||||||||||||
Interest
rate cash flow hedges:
|
|||||||||||||||||||||||||
Unrealized
change in fair value
|
- | - | - | - | 1 | - | - | 1 | |||||||||||||||||
Net
change in other
|
- | - | - | - | (1 | ) | - | - | (1 | ) | |||||||||||||||
September
30, 2008
|
192 | 19 | $ | 641 | $ | 2,182 | $ | (129 | ) | $ | (614 | ) | $ | 3,925 | $ | 6,005 | |||||||||
December
31, 2006
|
188 | 17 | $ | 629 | $ | 2,041 | $ | (140 | ) | $ | (511 | ) | $ | 2,095 | $ | 4,114 | |||||||||
Net
income
|
- | - | - | - | - | - | 644 | 644 | |||||||||||||||||
Stock-based
compensation expense
|
- | - | - | 20 | - | - | - | 20 | |||||||||||||||||
Exercise
of stock options
|
1 | - | 4 | 15 | - | - | - | 19 | |||||||||||||||||
Tax
benefits related to exercise of stock options
|
- | - | - | 14 | - | - | - | 14 | |||||||||||||||||
Restricted
stock awards, net
|
1 | - | 2 | (2 | ) | - | - | - | - | ||||||||||||||||
Dividends
($0.315 per share)
|
- | - | - | - | - | - | (54 | ) | (54 | ) | |||||||||||||||
Purchases
of treasury stock
|
- | 2 | - | - | - | (102 | ) | - | (102 | ) | |||||||||||||||
Oil
and gas cash flow hedges:
|
|||||||||||||||||||||||||
Realized
amounts reclassified into earnings
|
- | - | - | - | 5 | - | - | 5 | |||||||||||||||||
Unrealized
change in fair value
|
- | - | - | - | (44 | ) | - | - | (44 | ) | |||||||||||||||
Net
change in other
|
- | - | - | - | 2 | - | - | 2 | |||||||||||||||||
September
30, 2007
|
190 | 19 | $ | 635 | $ | 2,088 | $ | (177 | ) | $ | (613 | ) | $ | 2,685 | $ | 4,618 | |||||||||
The
accompanying notes are an integral part of these financial
statements.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Other
Revenues
|
||||||||||||||||
Electricity
sales
|
$ | 14 | $ | 17 | $ | 42 | $ | 54 | ||||||||
Gathering,
marketing and processing revenues
|
4 | 5 | 13 | 16 | ||||||||||||
Total
|
$ | 18 | $ | 22 | $ | 55 | $ | 70 | ||||||||
Other
Operating Expense, net
|
||||||||||||||||
Electricity
generation (1)
|
$ | 13 | $ | 14 | $ | 41 | $ | 42 | ||||||||
Gathering,
marketing and processing
|
5 | 4 | 14 | 13 | ||||||||||||
Loss
on involuntary conversion
|
9 | - | 9 | 51 | ||||||||||||
Impairment
of operating assets (2)
|
38 | 4 | 38 | 4 | ||||||||||||
Other
operating (income) expense, net (3)
|
32 | 2 | 34 | (4 | ) | |||||||||||
Total
|
$ | 97 | $ | 24 | $ | 136 | $ | 106 | ||||||||
Other
Expense, net
|
||||||||||||||||
Deferred
compensation (4)
|
$ | (47 | ) | $ | 8 | $ | (25 | ) | $ | 23 | ||||||
Interest
income
|
(6 | ) | (2 | ) | (18 | ) | (8 | ) | ||||||||
Other
(income) expense, net
|
2 | (4 | ) | 10 | 5 | |||||||||||
Total
|
$ | (51 | ) | $ | 2 | $ | (33 | ) | $ | 20 |
(1)
|
Includes
increases in the allowance for doubtful accounts of $3 million each in
third quarter 2008 and 2007 and $9 million and $11 million for the first
nine months of 2008 and 2007,
respectively.
|
(2)
|
Includes
third quarter 2008 impairment loss on Gulf of Mexico Main Pass
assets.
|
(3)
|
Includes
$38 million write-down of SemCrude L.P. receivable in third quarter 2008.
See Note 13 – Commitments and
Contingencies.
|
(4)
|
Amount
represents increases or (decreases) in the fair value of Noble Energy
common stock held in a rabbi trust.
|
September
30,
|
December
31,
|
|||||
2008
|
2007
|
|||||
(in
millions)
|
||||||
Other
Current Assets
|
||||||
Inventories
|
$ | 91 | $ | 60 | ||
Commodity
derivative instruments
|
40 | 15 | ||||
Prepaid
expenses and other current assets
|
28 | 25 | ||||
Deferred
income taxes
|
49 | 131 | ||||
Assets
held for sale
|
11 | 82 | ||||
Probable
insurance claims
|
17 | 2 | ||||
Total
|
$ | 236 | $ | 315 | ||
Other
Noncurrent Assets
|
||||||
Equity
method investments
|
$ | 324 | $ | 357 | ||
Mutual
fund investments
|
101 | 124 | ||||
Probable
insurance claims
|
8 | 37 | ||||
Commodity
derivative instruments
|
18 | 5 | ||||
Other
noncurrent assets
|
56 | 33 | ||||
Total
|
$ | 507 | $ | 556 | ||
Other
Current Liabilities
|
||||||
Accrued
and other current liabilities
|
$ | 258 | $ | 207 | ||
Current
income taxes payable
|
181 | 52 | ||||
Short-term
borrowings
|
48 | 25 | ||||
Asset
retirement obligations
|
13 | 13 | ||||
Interest
payable
|
17 | 18 | ||||
Deferred
gain on sale of assets
|
24 | - | ||||
Total
|
$ | 541 | $ | 315 | ||
Other
Noncurrent Liabilities
|
||||||
Deferred
compensation liability
|
$ | 185 | $ | 225 | ||
Accrued
benefit costs
|
53 | 51 | ||||
Other
noncurrent liabilities
|
61 | 61 | ||||
Total
|
$ | 299 | $ | 337 |
Fair Value Measurements Using | ||||||||||||||
Quoted
Prices in Active Markets
(Level
1)
|
Significant
Other Observable Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
Netting
Adjustment (1)
|
Fair Value Measurement | ||||||||||
(in
millions)
|
||||||||||||||
Financial
assets:
|
||||||||||||||
Mutual
fund investments
|
$ |
101
|
$ |
-
|
$ |
-
|
$
|
-
|
$ |
101
|
||||
Commodity
derivative instruments
|
-
|
149
|
-
|
(91)
|
58
|
|||||||||
Financial
liabilities:
|
||||||||||||||
Commodity
derivative instruments
|
-
|
(349)
|
-
|
91
|
(258)
|
(1)
|
Amount
represents the impact of master netting agreements that allow us to settle
asset and liability positions with the same
counterparty.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Unrealized
(gain) on commodity derivative instruments
|
$ | (943 | ) | $ | - | $ | (9 | ) | $ | - | ||||||
Realized
loss on commodity derivative instruments
|
68 | - | 199 | - | ||||||||||||
Ineffectiveness
loss (gain)
|
- | 2 | - | (1 | ) | |||||||||||
(Gain)
loss on commodity derivative instruments
|
$ | (875 | ) | $ | 2 | $ | 190 | $ | (1 | ) |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
(Decrease)
in crude oil sales
|
$ | (89 | ) | $ | (60 | ) | $ | (279 | ) | $ | (128 | ) | ||||
(Decrease)
increase in natural gas sales
|
(4 | ) | 48 | 31 | 120 | |||||||||||
Total
(decrease) in oil and gas sales
|
$ | (93 | ) | $ | (12 | ) | $ | (248 | ) | $ | (8 | ) |
Variable
to Fixed Price Swaps
|
Costless
Collars
|
|||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||
Production
|
Bbls
|
Average
|
Bbls
|
Average
|
Average
|
|||||||||||||||||
Period
|
Index
|
Per
Day
|
Fixed
Price
|
Index
|
Per
Day
|
Floor
Price
|
Ceiling
Price
|
|||||||||||||||
4th
Qtr 2008
|
NYMEX
WTI
|
16,500 | $ | 37.92 |
NYMEX
WTI
|
3,100 | $ | 60.00 | $ | 72.40 | ||||||||||||
4th
Qtr 2008
|
Dated
Brent
|
2,000 | 88.18 |
Dated
Brent
|
3,587 | 45.00 | 65.90 | |||||||||||||||
4th
Qtr 2008 Average
|
18,500 | 43.35 | 6,687 | 51.95 | 68.91 | |||||||||||||||||
2009
|
NYMEX
WTI
|
9,000 | 88.43 |
NYMEX
WTI
|
6,700 | 79.70 | 90.60 | |||||||||||||||
2009
|
Dated
Brent
|
2,000 | 87.98 |
Dated
Brent
|
5,074 | 70.62 | 87.93 | |||||||||||||||
2009
Average
|
11,000 | 88.35 | 11,774 | 75.79 | 89.45 | |||||||||||||||||
2010
|
-
|
- | - |
NYMEX
WTI
|
5,500 | 69.00 | 85.65 |
Variable
to Fixed Price Swaps
|
Costless
Collars
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||
Production
|
MMBtu
|
Average
|
MMBtu
|
Average
|
Average
|
||||||||||||||||||
Period
|
Index
|
Per
Day
|
Fixed
Price
|
Index
|
Per
Day
|
Floor
Price
|
Ceiling
Price
|
||||||||||||||||
4th
Qtr 2008
|
NYMEX
HH
|
170,000 | $ | 5.63 |
IFERC
CIG
|
14,000 | $ | 6.75 | $ | 8.70 | |||||||||||||
2009
|
- | - | - |
NYMEX
HH
|
170,000 | 9.15 | 10.81 | ||||||||||||||||
2009
|
- | - | - |
IFERC
CIG
|
15,000 | 6.00 | 9.90 | ||||||||||||||||
2009
Average
|
- | - | 185,000 | 8.90 | 10.73 | ||||||||||||||||||
2010
|
- | - | - |
IFERC
CIG
|
15,000 | 6.25 | 8.10 |
Basis
Swaps
|
||||||||||||
Weighted
|
||||||||||||
Production
|
Index
Less
|
MMBtu
|
Average
|
|||||||||
Period
|
Index
|
Differential
|
Per
Day
|
Differential
|
||||||||
4th
Qtr 2008
|
IFERC
CIG
|
NYMEX
HH
|
100,000 | $ | 1.66 | |||||||
4th
Qtr 2008
|
IFERC
ANR-OK
|
NYMEX
HH
|
40,000 | 1.01 | ||||||||
4th
Qtr 2008
|
IFERC
PEPL
|
NYMEX
HH
|
10,000 | 0.98 | ||||||||
4th
Qtr 2008 Average
|
150,000 | 1.44 | ||||||||||
2009
|
IFERC
CIG
|
NYMEX
HH
|
140,000 | 2.49 |
Nine
Months Ended
|
||||
September
30, 2008 (1)
|
||||
(in
millions)
|
||||
Capitalized
exploratory well costs at beginning of period
|
$ | 249 | ||
Additions
to capitalized exploratory well costs pending determination of
proved reserves
|
267 | |||
Reclassified
to proved oil and gas properties based on determination of
proved reserves
|
- | |||
Capitalized
exploratory well costs charged to expense
|
(1 | ) | ||
Capitalized
exploratory well costs at end of period
|
$ | 515 |
(1)
|
Changes
in capitalized exploratory well costs exclude amounts that were
capitalized and subsequently expensed in the same
period.
|
September
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
(in
millions, except
number
of projects)
|
|||||||
Exploratory
well costs capitalized for a period of one year or less
|
$ | 364 | $ | 187 | |||
Exploratory
well costs capitalized for a period greater than one year after completion
of drilling
|
151 | 62 | |||||
Balance
at end of period
|
$ | 515 | $ | 249 | |||
Number
of projects with exploratory well costs that have been capitalized
for a period greater than one year after completion of
drilling
|
5 | 5 | |||||
Suspended
Since
|
||||||||||||||||
Total
|
2007
|
2006
|
2005
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Project
|
||||||||||||||||
Raton
South (deepwater Gulf of Mexico)
|
$ | 28 | $ | 5 | $ | 23 | $ | - | ||||||||
Redrock
(deepwater Gulf of Mexico)
|
17 | - | 17 | - | ||||||||||||
Blocks
O and I (West Africa)
|
88 | 68 | 1 | 19 | ||||||||||||
Flyndre
(North Sea)
|
15 | 12 | 3 | - | ||||||||||||
Other
|
3 | - | 3 | - | ||||||||||||
Total
capitalized exploratory well costs that have been
|
||||||||||||||||
capitalized for a
period greater than one year since completion of
drilling
|
$ | 151 | $ | 85 | $ | 47 | $ | 19 |
Nine
Months Ended
|
||||
September
30, 2008
|
||||
(in
millions)
|
||||
Asset
retirement obligations at January 1, 2008
|
$ | 144 | ||
Liabilities
incurred in current period
|
15 | |||
Liabilities
settled in current period
|
(16 | ) | ||
Revisions
|
10 | |||
Accretion
expense
|
7 | |||
Asset
retirement obligations at September 30, 2008
|
$ | 160 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Service
cost
|
$ | 3 | $ | 3 | $ | 9 | $ | 9 | ||||||||
Interest
cost
|
3 | 3 | 9 | 7 | ||||||||||||
Expected
return on plan assets
|
(3 | ) | (3 | ) | (9 | ) | (8 | ) | ||||||||
Other
|
1 | - | 2 | 2 | ||||||||||||
Net
periodic benefit cost
|
$ | 4 | $ | 3 | $ | 11 | $ | 10 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Stock-based
compensation expense
|
$ | 10 | $ | 8 | $ | 30 | $ | 20 | ||||||||
Tax
benefit recognized
|
$ | (4 | ) | $ | (3 | ) | $ | (11 | ) | $ | (8 | ) |
Weighted
|
Weighted
|
|||||||||||||||
Net
|
Average
|
Net
|
Average
|
|||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
2008
|
2007
|
|||||||||||||||
(in
millions, except per share amounts)
|
||||||||||||||||
Three
Months Ended September 30:
|
||||||||||||||||
Net
income
|
$ | 974 | 173 | $ | 223 | 171 | ||||||||||
Basic
Earnings Per Share
|
$ | 5.64 | $ | 1.30 | ||||||||||||
Net
income
|
$ | 974 | 173 | $ | 223 | 171 | ||||||||||
Effect
of dilutive stock options and restricted stock
|
- | 2 | - | 2 | ||||||||||||
Effect
of shares of Noble Energy stock in rabbi trust (1)
|
(29 | ) | 1 | - | - | |||||||||||
Net
income available to common shareholders
|
$ | 945 | 176 | $ | 223 | 173 | ||||||||||
Diluted
Earnings Per Share
|
$ | 5.37 | $ | 1.28 | ||||||||||||
Nine
Months Ended September 30:
|
||||||||||||||||
Net
income
|
$ | 1,045 | 172 | $ | 644 | 171 | ||||||||||
Basic
Earnings Per Share
|
$ | 6.06 | $ | 3.76 | ||||||||||||
Net
income
|
$ | 1,045 | 172 | $ | 644 | 171 | ||||||||||
Effect
of dilutive stock options and restricted stock
|
- | 3 | - | 2 | ||||||||||||
Effect
of shares of Noble Energy stock in rabbi trust (1)
|
(16 | ) | 1 | - | - | |||||||||||
Net
income available to common shareholders
|
$ | 1,029 | 176 | $ | 644 | 173 | ||||||||||
Diluted
Earnings Per Share
|
$ | 5.86 | $ | 3.72 |
(1)
|
The
diluted earnings per share calculation for the three and nine months ended
September 30, 2008 includes decreases to net income of $29 million and $16
million (net of tax) respectively, related to a deferred compensation gain
from Noble Energy shares held in a rabbi trust. When dilutive, the
deferred compensation gain or loss (net of tax) is excluded from net
income while the Noble Energy shares held in the rabbi trust are included
in the diluted share count.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Current
|
$ | 316 | $ | 32 | $ | 355 | $ | 104 | ||||||||
Deferred
|
164 | 88 | 173 | 192 | ||||||||||||
Total
income tax provision
|
$ | 480 | $ | 120 | $ | 528 | $ | 296 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Net
income
|
$ | 974 | $ | 223 | $ | 1,045 | $ | 644 | ||||||||
Other
items of comprehensive income (loss)
|
||||||||||||||||
Oil
and gas cash flow hedges:
|
||||||||||||||||
Realized
amounts reclassified into earnings
|
93 | 12 | 248 | 8 | ||||||||||||
Less
tax provision
|
(35 | ) | (5 | ) | (93 | ) | (3 | ) | ||||||||
Unrealized
change in fair value
|
- | 12 | - | (71 | ) | |||||||||||
Less
tax provision
|
- | (4 | ) | - | 27 | |||||||||||
Interest
rate cash flow hedges:
|
||||||||||||||||
Unrealized
change in fair value
|
12 | - | 1 | - | ||||||||||||
Less
tax provision
|
(5 | ) | - | - | - | |||||||||||
Net
change in other
|
- | - | (1 | ) | 2 | |||||||||||
Other
comprehensive income (loss)
|
65 | 15 | 155 | (37 | ) | |||||||||||
Comprehensive
income
|
$ | 1,039 | $ | 238 | $ | 1,200 | $ | 607 |
Other
Int'l
|
||||||||||||||||||||||||
United
|
West
|
North
|
Corporate
&
|
|||||||||||||||||||||
Consolidated
|
States
|
Africa
|
Sea
|
Israel
|
Marketing
|
|||||||||||||||||||
(in
millions)
|
||||||||||||||||||||||||
Three
Months Ended September 30, 2008
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ | 1,151 | $ | 646 | $ | 156 | $ | 136 | $ | 51 | $ | 162 | ||||||||||||
Amount
reclassified from AOCL (1)
|
(93 | ) | (84 | ) | (9 | ) | - | - | - | |||||||||||||||
Intersegment
revenue
|
- | 112 | - | - | - | (112 | ) | |||||||||||||||||
Income
from equity method investees
|
40 | - | 40 | - | - | - | ||||||||||||||||||
Total
Revenues
|
1,098 | 674 | 187 | 136 | 51 | 50 | ||||||||||||||||||
DD&A
|
194 | 158 | 8 | 12 | 7 | 9 | ||||||||||||||||||
Loss
on involuntary conversion
|
9 | 9 | - | - | - | - | ||||||||||||||||||
Impairment
of operating assets
|
38 | 38 | - | - | - | - | ||||||||||||||||||
(Gain)
on commodity derivative instruments
|
(875 | ) | (749 | ) | (126 | ) | - | - | - | |||||||||||||||
Income
(loss) before taxes
|
1,454 | 1,058 | 303 | 107 | 40 | (54 | ) | |||||||||||||||||
Three
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ | 780 | $ | 406 | $ | 101 | $ | 122 | $ | 35 | $ | 116 | ||||||||||||
Amount
reclassified from AOCL (1)
|
(12 | ) | (9 | ) | (3 | ) | - | - | - | |||||||||||||||
Intersegment
revenue
|
- | 60 | - | - | - | (60 | ) | |||||||||||||||||
Income
from equity method investees
|
46 | - | 46 | - | - | - | ||||||||||||||||||
Total
Revenues
|
814 | 457 | 144 | 122 | 35 | 56 | ||||||||||||||||||
DD&A
|
197 | 145 | 9 | 30 | 5 | 8 | ||||||||||||||||||
Impairment of operating assets | 4 | 4 | - | - | - | - | ||||||||||||||||||
Loss
on commodity derivative instruments
|
2 | 2 | - | - | - | - | ||||||||||||||||||
Income
(loss) before taxes
|
343 | 181 | 112 | 78 | 28 | (56 | ) | |||||||||||||||||
Nine
Months Ended September 30, 2008
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ | 3,418 | $ | 1,975 | $ | 460 | $ | 327 | $ | 121 | $ | 535 | ||||||||||||
Amount
reclassified from AOCL (1)
|
(248 | ) | (216 | ) | (32 | ) | - | - | - | |||||||||||||||
Intersegment
revenue
|
- | 372 | - | - | - | (372 | ) | |||||||||||||||||
Income
from equity method investees
|
158 | - | 158 | - | - | - | ||||||||||||||||||
Total
Revenues
|
3,328 | 2,131 | 586 | 327 | 121 | 163 | ||||||||||||||||||
DD&A
|
593 | 487 | 26 | 40 | 18 | 22 | ||||||||||||||||||
Loss
on involuntary conversion
|
9 | 9 | - | - | - | - | ||||||||||||||||||
Impairment
of operating assets
|
38 | 38 | - | - | - | - | ||||||||||||||||||
Loss
on commodity derivative instruments
|
190 | 137 | 53 | - | - | - | ||||||||||||||||||
Income
(loss) before taxes
|
1,573 | 990 | 491 | 234 | 94 | (236 | ) | |||||||||||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Revenues
from third parties
|
$ | 2,218 | $ | 1,214 | $ | 286 | $ | 239 | $ | 85 | $ | 394 | ||||||||||||
Amount
reclassified from AOCL (1)
|
(8 | ) | (5 | ) | (3 | ) | - | - | - | |||||||||||||||
Intersegment
revenue
|
- | 227 | - | - | - | (227 | ) | |||||||||||||||||
Income
from equity method investees
|
140 | - | 140 | - | - | - | ||||||||||||||||||
Total
Revenues
|
2,350 | 1,436 | 423 | 239 | 85 | 167 | ||||||||||||||||||
DD&A
|
547 | 433 | 19 | 58 | 13 | 24 | ||||||||||||||||||
Loss
on involuntary conversion
|
51 | 51 | - | - | - | - | ||||||||||||||||||
Impairment of operating assets | 4 | 4 | - | - | - | - | ||||||||||||||||||
Gain
on commodity derivative instruments
|
(1 | ) | (1 | ) | - | - | - | - | ||||||||||||||||
Income
(loss) before taxes
|
940 | 559 | 338 | 137 | 65 | (159 | ) | |||||||||||||||||
Total
assets at September 30, 2008
(2)
|
$ | 12,116 | 8,937 | 1,650 | 759 | 285 | 485 | |||||||||||||||||
Total
assets at December 31, 2007
(2)
|
10,831 | 7,918 | 1,355 | 562 | 268 | 728 |
(1)
|
Revenues
include decreases resulting from hedging activities. The decreases
resulted from hedge gains and losses that were deferred in AOCL, as a
result of previous cash flow hedge accounting, and subsequently
reclassified to revenues.
|
(2)
|
The
US reporting unit includes goodwill of $759 million at September 30, 2008
and $761 million at December 31,
2007.
|
Financial
results for third quarter 2008 also included the
following:
|
|
·
|
net
income of $974 million, as compared with $223 million for
2007;
|
|
·
|
diluted
income per share of $5.37, as compared with $1.28 for 2007;
and
|
|
·
|
cash
flow from operating activities of $713 million, as compared with $548
million for third quarter 2007.
|
Operational
results for third quarter 2008 included the
following:
|
|
·
|
significant
oil discovery at the Gunflint prospect in the deepwater Gulf of
Mexico;
|
|
·
|
successful
appraisal of the South Raton discovery in the deepwater Gulf of
Mexico;
|
|
·
|
record
quarterly natural gas production in Israel of 155
MMcfpd;
|
|
·
|
commencement
of production from the phase two development of Dumbarton in the North
Sea;
|
|
·
|
successful
oil test offshore Equatorial Guinea at the Diega discovery;
and
|
|
·
|
acquisition
of producing properties in western
Oklahoma.
|
|
·
|
higher
sales of natural gas from the Alba field in Equatorial
Guinea;
|
|
·
|
growth
in demand for natural gas in
Israel;
|
|
·
|
growing
production from our Rocky Mountain assets, where we are continuing active
drilling programs;
|
|
·
|
natural
field decline in the Gulf Coast and Mid-continent areas of our US
operations.
|
|
·
|
hurricane-related
volume curtailments in the Gulf of Mexico and Gulf Coast areas of our US
operations as occurred with Hurricanes Gustav and
Ike;
|
|
·
|
potential
winter storm-related volume curtailments in the Northern region of our US
operations;
|
|
·
|
potential
pipeline and processing facility capacity constraints in the Rocky
Mountain area of our US operations;
|
|
·
|
infrastructure
development and deliverability of Egyptian gas in Israel, which could
lower our sales volumes;
|
|
·
|
potential
downtime at the methanol, LPG and/or LNG facilities in Equatorial
Guinea;
|
|
·
|
timing
of workovers and turbine repairs and seasonal variations in rainfall in
Ecuador that affect our natural gas-to-power
project;
|
|
·
|
timing
and success of capital expenditures, as discussed below, which are
expected to result in near-term production;
and
|
|
·
|
timing of
significant project completion and initial
production.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Crude
oil and condensate sales
|
$ | 629 | $ | 450 | $ | 1,830 | $ | 1,205 | ||||||||
Natural
gas sales
|
361 | 296 | 1,132 | 935 | ||||||||||||
NGL
sales (1)
|
50 | - | 153 | - | ||||||||||||
Total
|
$ | 1,040 | $ | 746 | $ | 3,115 | $ | 2,140 |
(1)
|
For
2007, US NGL sales volumes were included with natural gas
volumes. Effective in 2008, we began reporting US NGLs, which
has lowered the comparative natural gas sales revenues from 2007 to
2008.
|
Sales
Volumes
|
Average
Realized Sales Prices
|
|||||||||||||||||||||||
Crude
Oil &
|
Natural
|
Crude
Oil &
|
Natural
|
|||||||||||||||||||||
Condensate
|
Gas
(1)
|
NGLs
(1)
|
Condensate
|
Gas
(1)
|
NGLs
(1)
|
|||||||||||||||||||
(MBopd)
|
(MMcfpd)
|
(MBpd)
|
(Per
Bbl)
|
(Per
Mcf)
|
(Per
Bbl)
|
|||||||||||||||||||
Three
Months Ended September 30, 2008
|
||||||||||||||||||||||||
United
States (2)
|
38 | 384 | 10 | $ | 93.47 | $ | 8.48 | $ | 57.06 | |||||||||||||||
West
Africa (3)
|
14 | 194 | - | 109.90 | 0.27 | - | ||||||||||||||||||
North
Sea
|
12 | 6 | - | 117.44 | 11.54 | - | ||||||||||||||||||
Israel
|
- | 155 | - | - | 3.57 | - | ||||||||||||||||||
Ecuador
(4)
|
- | 21 | - | - | - | - | ||||||||||||||||||
Other
International
|
3 | - | - | 106.03 | - | - | ||||||||||||||||||
Total
Consolidated Operations
|
67 | 760 | 10 | 101.82 | 5.31 | 57.06 | ||||||||||||||||||
Equity
Investees (5)
|
2 | - | 5 | 116.04 | - | 67.56 | ||||||||||||||||||
Total
|
69 | 760 | 15 | $ | 102.25 | $ | 5.31 | $ | 60.80 | |||||||||||||||
Three
Months Ended September 30, 2007
|
||||||||||||||||||||||||
United
States (2)
|
40 | 404 | - | $ | 55.85 | $ | 6.77 | $ | - | |||||||||||||||
West
Africa (3)
|
14 | 208 | - | 73.25 | 0.27 | - | ||||||||||||||||||
North
Sea
|
17 | 5 | - | 77.13 | 7.26 | - | ||||||||||||||||||
Israel
|
- | 131 | - | - | 2.95 | - | ||||||||||||||||||
Ecuador
(4)
|
- | 25 | - | - | - | - | ||||||||||||||||||
Other
International
|
6 | - | - | 55.55 | - | - | ||||||||||||||||||
Total
Consolidated Operations
|
77 | 773 | - | 63.53 | 4.30 | - | ||||||||||||||||||
Equity
Investees (5)
|
2 | - | 5 | 77.91 | - | 49.98 | ||||||||||||||||||
Total
|
79 | 773 | 5 | $ | 62.98 | $ | 4.30 | $ | 49.98 | |||||||||||||||
Nine
Months Ended September 30, 2008
|
||||||||||||||||||||||||
United
States (2)
|
41 | 393 | 10 | $ | 87.84 | $ | 9.10 | $ | 57.39 | |||||||||||||||
West
Africa (3)
|
15 | 212 | - | 103.31 | 0.27 | - | ||||||||||||||||||
North
Sea
|
10 | 6 | - | 114.42 | 10.62 | - | ||||||||||||||||||
Israel
|
- | 140 | - | - | 3.15 | - | ||||||||||||||||||
Ecuador
(4)
|
- | 22 | - | - | - | - | ||||||||||||||||||
Other
International
|
4 | - | - | 73.37 | - | - | ||||||||||||||||||
Total
Consolidated Operations
|
70 | 773 | 10 | 78.89 | 5.50 | 57.39 | ||||||||||||||||||
Equity
Investees (5)
|
2 | - | 6 | 110.43 | - | 66.08 | ||||||||||||||||||
Total
|
72 | 773 | 16 | $ | 95.47 | $ | 5.50 | $ | 60.80 | |||||||||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||||||||||
United
States (2)
|
43 | 410 | - | $ | 51.04 | $ | 7.42 | $ | - | |||||||||||||||
West
Africa (3)
|
15 | 127 | - | 66.97 | 0.29 | - | ||||||||||||||||||
North
Sea
|
12 | 6 | - | 70.41 | 6.05 | - | ||||||||||||||||||
Israel
|
- | 111 | - | - | 2.81 | - | ||||||||||||||||||
Ecuador
(4)
|
- | 25 | - | - | - | |||||||||||||||||||
Other
International
|
7 | - | - | 50.30 | - | - | ||||||||||||||||||
Total
Consolidated Operations
|
77 | 679 | - | 57.03 | 5.24 | - | ||||||||||||||||||
Equity
Investees (5)
|
2 | - | 6 | 69.63 | - | 44.75 | ||||||||||||||||||
Total
|
79 | 679 | 6 | $ | 56.47 | $ | 5.24 | $ | 44.75 |
(1)
|
In
2007, US NGL sales volumes were included with natural gas
volumes. Effective in 2008, we began reporting US NGLs, which
has lowered the comparative natural gas sales volumes from 2007 to
2008.
|
(2)
|
Average
realized crude oil and condensate prices reflect reductions of $22.95 per
Bbl and $15.64 per Bbl for third quarter 2008 and 2007, respectively, and
reductions of $21.69 per Bbl and $10.57 per Bbl for the first nine months
of 2008 and 2007, respectively, from hedging activities. Average realized
natural gas prices reflect a reduction of $0.12 per Mcf and an increase of
$1.29 per Mcf for third quarter 2008 and 2007, respectively, and increases
of $0.29 per Mcf and $1.07 per Mcf for the first nine months of 2008 and
2007, respectively, from hedging activities. The price
increases and reductions resulted from hedge gains and losses that had been
previously deferred
in AOCL.
|
(3)
|
Average
realized crude oil and condensate prices reflect reductions of $7.42 per
Bbl and $2.18 per Bbl for third quarter 2008 and 2007, respectively, and
reductions of $8.10 per Bbl and $0.68 per Bbl for the first nine months of
2008 and 2007, respectively, from hedging activities. The price
reductions resulted from hedge losses that had been previously deferred in
AOCL. 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 facility. The methanol and LPG plants are owned by affiliated
entities accounted for under the equity method of
accounting. Natural gas volumes sold to the LNG facility
totaled 160 MMcfpd and 155 MMcfpd during third quarter 2008 and 2007,
respectively, and 169 MMcfpd and 72 MMcfpd during the first nine months of
2008 and 2007, respectively. The natural gas sold to the LNG facility and
methanol plant has a lower Btu content than the natural gas sold to the
LPG plant. As a result of the increase in natural gas volumes sold to
the LNG plant in 2008, the average price received on an Mcf basis is
lower.
|
(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 are included in other
revenues.
|
(5)
|
Volumes
represent sales of condensate and LPG from the Alba plant in Equatorial
Guinea. See Equity Method Investees
below.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(MBopd)
|
||||||||||||||||
United
States
|
38 | 40 | 41 | 43 | ||||||||||||
West
Africa
|
15 | 15 | 15 | 16 | ||||||||||||
North
Sea
|
9 | 16 | 10 | 12 | ||||||||||||
Other
International
|
3 | 7 | 4 | 7 | ||||||||||||
Total
Consolidated Operations
|
65 | 78 | 70 | 78 | ||||||||||||
Equity
Investees
|
2 | 2 | 2 | 2 | ||||||||||||
Total
|
67 | 80 | 72 | 80 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30, 2008
|
September
30, 2008
|
|||||||||||||||
Crude
Oil &
|
Natural
|
Crude
Oil &
|
Natural
|
|||||||||||||
Condensate
|
Gas
|
Condensate
|
Gas
|
|||||||||||||
(Per
Bbl)
|
(Per
Mcf)
|
(Per
Bbl)
|
(Per
Mcf)
|
|||||||||||||
United
States
|
$
|
88.77
|
$ |
8.41
|
$
|
78.11
|
$ |
8.55
|
||||||||
West
Africa
|
106.61
|
0.27
|
95.83
|
0.27
|
||||||||||||
Total
Consolidated Operations
|
98.47
|
5.28
|
71.59
|
5.22
|
||||||||||||
Total
|
99.00
|
5.28
|
88.37
|
5.22
|
|
·
|
higher
worldwide commodity prices; and
|
|
·
|
growth
in the Rocky Mountain area of our US
operations;
|
|
·
|
hurricane-related
production shut-ins in the Gulf of Mexico from Hurricanes Gustav and
Ike;
|
|
·
|
declining
production in the Gulf Coast onshore and Mid-continent areas of our US
operations; and
|
|
·
|
natural
field decline in the North Sea.
|
|
·
|
higher
commodity prices;
|
|
·
|
successful
drilling program in the Piceance basin along with less severe winter
weather in the Rocky Mountain area of our US
operations;
|
|
·
|
increased
natural gas sales volumes in Israel;
and
|
|
·
|
increased
sales from the Alba field in Equatorial Guinea to an LNG
plant;
|
|
·
|
hurricane-related
production shut-ins in the Gulf of Mexico from Hurricanes Gustav and
Ike;
|
|
·
|
a
reduction for shrink gas associated with the natural gas liquids now being
reported separately;
|
|
·
|
declining
production in the Gulf Coast onshore and Mid-continent areas of our US
operations; and
|
|
·
|
lower
average realized prices in West
Africa.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
income
|
(in
millions, except where noted)
|
|||||||||||||||
AMPCO
and affiliates
|
$ | 5 | $ | 15 | $ | 51 | $ | 50 | ||||||||
Alba
Plant
|
$ | 35 | $ | 31 | $ | 107 | $ | 90 | ||||||||
Distributions/Dividends
|
||||||||||||||||
AMPCO
|
$ | 16 | $ | 17 | $ | 54 | $ | 60 | ||||||||
Alba
Plant
|
$ | 55 | $ | 41 | $ | 138 | $ | 95 | ||||||||
Sales
volumes
|
||||||||||||||||
Methanol
(Mgal)
|
23 | 44 | 93 | 117 | ||||||||||||
Condensate
(MBopd)
|
2 | 2 | 2 | 2 | ||||||||||||
LPG
(MBpd)
|
5 | 5 | 6 | 6 | ||||||||||||
Production
volumes
|
||||||||||||||||
Methanol
(Mgal)
|
21 | 41 | 83 | 122 | ||||||||||||
Condensate
(MBopd)
|
2 | 2 | 2 | 2 | ||||||||||||
LPG
(MBpd)
|
6 | 6 | 6 | 6 | ||||||||||||
Average
realized prices
|
||||||||||||||||
Methanol
(per gallon)
|
$ | 1.16 | $ | 0.80 | $ | 1.33 | $ | 0.96 | ||||||||
Condensate
(per Bbl)
|
$ | 116.04 | $ | 77.91 | $ | 110.43 | $ | 69.63 | ||||||||
LPG
(per Bbl)
|
$ | 67.56 | $ | 49.98 | $ | 66.08 | $ | 44.75 |
United
|
West
|
North
|
Other
Int'l /
|
|||||||||||||||||||||
Consolidated
|
States
|
Africa
|
Sea
|
Israel
|
Corp(1)
|
|||||||||||||||||||
(in
millions)
|
||||||||||||||||||||||||
Three
Months Ended September 30, 2008
|
||||||||||||||||||||||||
Oil
and gas operating costs (2)
|
$ | 88 | $ | 55 | $ | 10 | $ | 17 | $ | 3 | $ | 3 | ||||||||||||
Workover
and repair expense
|
10 | 9 | - | 1 | - | - | ||||||||||||||||||
Lease
operating expense
|
98 | 64 | 10 | 18 | 3 | 3 | ||||||||||||||||||
Production
and ad valorem taxes
|
47 | 38 | - | - | - | 9 | ||||||||||||||||||
Transportation
expense
|
14 | 12 | - | 2 | - | - | ||||||||||||||||||
Total
production costs
|
$ | 159 | $ | 114 | $ | 10 | $ | 20 | $ | 3 | $ | 12 | ||||||||||||
Three
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Oil
and gas operating costs (2)
|
$ | 77 | $ | 50 | $ | 7 | $ | 11 | $ | 3 | $ | 6 | ||||||||||||
Workover
and repair expense
|
5 | 5 | - | - | - | - | ||||||||||||||||||
Lease
operating expense
|
82 | 55 | 7 | 11 | 3 | 6 | ||||||||||||||||||
Production
and ad valorem taxes
|
27 | 21 | - | - | - | 6 | ||||||||||||||||||
Transportation
expense
|
13 | 10 | - | 3 | - | - | ||||||||||||||||||
Total
production costs
|
$ | 122 | $ | 86 | $ | 7 | $ | 14 | $ | 3 | $ | 12 | ||||||||||||
Nine
Months Ended September 30, 2008
|
||||||||||||||||||||||||
Oil
and gas operating costs (2)
|
$ | 244 | $ | 160 | $ | 29 | $ | 37 | $ | 7 | $ | 11 | ||||||||||||
Workover
and repair expense
|
24 | 23 | - | 1 | - | - | ||||||||||||||||||
Lease
operating expense
|
268 | 183 | 29 | 38 | 7 | 11 | ||||||||||||||||||
Production
and ad valorem taxes
|
141 | 112 | - | - | - | 29 | ||||||||||||||||||
Transportation
expense
|
43 | 36 | - | 6 | - | 1 | ||||||||||||||||||
Total
production costs
|
$ | 452 | $ | 331 | $ | 29 | $ | 44 | $ | 7 | $ | 41 | ||||||||||||
Nine
Months Ended September 30, 2007
|
||||||||||||||||||||||||
Oil
and gas operating costs (2)
|
$ | 229 | $ | 156 | $ | 25 | $ | 24 | $ | 7 | $ | 17 | ||||||||||||
Workover
and repair expense
|
14 | 14 | - | - | - | - | ||||||||||||||||||
Lease
operating expense
|
243 | 170 | 25 | 24 | 7 | 17 | ||||||||||||||||||
Production
and ad valorem taxes
|
81 | 66 | - | - | - | 15 | ||||||||||||||||||
Transportation
expense
|
40 | 32 | - | 7 | - | 1 | ||||||||||||||||||
Total
production costs
|
$ | 364 | $ | 268 | $ | 25 | $ | 31 | $ | 7 | $ | 33 |
(1)
|
Other
international includes Ecuador, China, and Argentina (through February
2008).
|
(2)
|
Oil
and gas operating costs include labor, fuel, repairs, replacements,
saltwater disposal and other related lifting
costs.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Oil
and gas operating costs
|
$ | 4.71 | $ | 4.08 | $ | 4.27 | $ | 4.40 | ||||||||
Workover
and repair expense
|
0.51 | 0.24 | 0.42 | 0.28 | ||||||||||||
Lease
operating expense
|
5.22 | 4.32 | 4.69 | 4.68 | ||||||||||||
Production
and ad valorem taxes
|
2.50 | 1.41 | 2.47 | 1.55 | ||||||||||||
Transportation
expense
|
0.76 | 0.70 | 0.75 | 0.78 | ||||||||||||
Total
production costs (1) (2)
(3)
|
$ | 8.48 | $ | 6.43 | $ | 7.91 | $ | 7.01 |
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity method
investees.
|
(2)
|
Sales
volumes include natural gas sales to an LNG facility in Equatorial Guinea
that began late first quarter 2007. Inclusion of these volumes reduced the
unit rate by $1.28 per BOE and $0.92 per BOE for third quarter 2008 and
2007, respectively, and $1.23 per BOE and $0.47 per BOE for the first nine
months of 2008 and 2007, respectively.
|
(3)
|
Natural
gas volumes are converted to oil equivalent volumes on the basis of six
thousand cubic feet of gas per barrel of
oil.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Oil
and gas exploration expense (1)
|
$ | 39 | $ | 46 | $ | 181 | $ | 145 |
(1)
|
Oil
and gas exploration expense includes dry hole expense, unproved lease
amortization, seismic expense, staff expense, lease rentals and other
miscellaneous exploration expense.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions, except unit rate)
|
||||||||||||||||
DD&A
expense - property, plant and equipment
|
$ | 191 | $ | 195 | $ | 586 | $ | 541 | ||||||||
Accretion
of discount on asset retirement obligations
|
3 | 2 | 7 | 6 | ||||||||||||
Total
DD&A expense
|
$ | 194 | $ | 197 | $ | 593 | $ | 547 | ||||||||
Unit
rate per BOE (1)
(2)
|
$ | 10.38 | $ | 10.41 | $ | 10.37 | $ | 10.47 |
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity method
investees.
|
(2)
|
Sales
volumes include natural gas sales to an LNG facility in Equatorial Guinea
that began late first quarter 2007. Inclusion of these volumes reduced the
unit rate by $1.25 per BOE and $1.20 per BOE for third quarter 2008 and
2007, respectively, and $1.31 per BOE and $0.57 per BOE for the first nine
months of 2008 and 2007,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
G&A
expense (in millions)
|
$ | 63 | $ | 49 | $ | 184 | $ | 142 | ||||||||
Unit
rate per BOE (1)
(2)
|
$ | 3.37 | $ | 2.61 | $ | 3.22 | $ | 2.74 |
(1)
|
Consolidated
unit rates exclude sales volumes and costs attributable to equity method
investees.
|
(2)
|
Sales
volumes include natural gas sales to an LNG facility in Equatorial Guinea
that began late first quarter 2007. Inclusion of these volumes reduced the
unit rate by $0.51 per BOE and $0.38 per BOE for third quarter 2008 and
2007, respectively, and $0.50 per BOE and $0.18 per BOE for the first nine
months of 2008 and 2007,
respectively.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Interest
expense
|
$ | 26 | $ | 33 | $ | 75 | $ | 97 | ||||||||
Capitalized
interest
|
(8 | ) | (4 | ) | (23 | ) | (10 | ) | ||||||||
Interest
expense, net
|
$ | 18 | $ | 29 | $ | 52 | $ | 87 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Income
tax provision (in millions)
|
$ | 480 | $ | 120 | $ | 528 | $ | 296 | ||||||||
Effective
rate
|
33.0 | % | 35.1 | % | 33.6 | % | 31.5 | % |
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2008
|
2007
|
|||||||
(in
millions)
|
||||||||
Total
cash provided by (used in):
|
||||||||
Operating
activities
|
$ | 1,867 | $ | 1,321 | ||||
Investing
activities
|
(1,721 | ) | (1,015 | ) | ||||
Financing
activities
|
186 | (8 | ) | |||||
Increase
in cash and cash equivalents
|
$ | 332 | $ | 298 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Acquisition,
Capital and Other Exploration Expenditures
|
||||||||||||||||
Unproved
property acquisition (1)
|
$ | 36 | $ | 2 | $ | 299 | $ | 93 | ||||||||
Proved
property acquisition
(2)
|
255 | - | 255 | 6 | ||||||||||||
Exploration
expenditures
|
142 | 97 | 385 | 250 | ||||||||||||
Development
expenditures
|
334 | 345 | 840 | 842 | ||||||||||||
Corporate
and other expenditures
|
19 | 5 | 53 | 24 | ||||||||||||
Total
capital expenditures
|
$ | 786 | $ | 449 | $ | 1,832 | $ | 1,215 |
(1)
|
Unproved
property acquisition cost for the first nine months of 2008 includes
deepwater lease blocks acquired in the March 2008 Gulf of Mexico lease
sale and the Mid-continent acquisition completed in July
2008.
|
(2)
|
Proved
property acquisition cost for the first nine months of 2008 includes the
Mid-continent acquisition.
|
|
·
|
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;
|
|
·
|
effect
of current volatility in the credit
markets;
|
|
·
|
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.
|
None.
|
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
None.
|
ITEM
5. OTHER INFORMATION
|
NOBLE
ENERGY, INC.
|
||
(Registrant)
|
||
Date: October
29, 2008
|
/s/
CHRIS TONG
|
|
CHRIS
TONG
|
||
Senior
Vice President and Chief Financial
Officer
|
10.1
|
Amendment
to the 2005 Stock Plan for Non-Employee Directors of Noble Energy,
Inc. (effective September
1, 2008), filed herewith.
|
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).
|