Noble Energy 2Q Profit Slips 0.7% as Expenses Rise

Noble Energy Inc.'s second-quarter earnings slipped 0.7% as the oil-and-gas explorer's operating expenses increased and realized prices for crude oil fell, though volume increased.

Adjusted earnings and revenue missed analyst expectations.

Noble has been selling its noncore assets to focus capital spending on higher-return areas, such as horizontal drilling in the U.S. and offshore projects in the deepwater U.S. Gulf of Mexico, the Eastern Mediterranean and offshore West Africa. In May, the company agreed to sell its stake in certain properties in the U.K.'s North Sea to Maersk Oil North Sea Ltd. for approximately $127 million. Earlier this month, Noble agreed to sell certain oil and natural gas assets in the Anadarko Basin to Unit Corp. (UNT) for $617.1 million.

In December, Noble announced a major natural-gas discovery in the waters near Cyprus, building on a string of recent success in the area known as the greater Levant basin. The company and its partners have made several discoveries in the basin, which is off the coasts of Cyprus, Israel, Lebanon and Syria. This could help make the area a major natural-gas exporter.

Noble said the growth of crude oil and liquids, which accounted for nearly half of production in the latest period, continues to be a key driver for its results. It said its Galapagos project as well as program in the DJ Basin and Marcellus shale will make significant contributions to production growth in the second half of the year.

Noble reported a profit of $292 million, or $1.58 a share, down from $294 million, or $1.61 a share, a year earlier. Excluding derivatives impacts and other items, earnings fell to 77 cents a share from $1.44 a share. Revenue increased 15% to $966 million.

Analysts polled by Thomson Reuters most recently projected earnings of 95 cents a share and revenue of $1 billion.

Operating expenses rose 34%.

Sales volume of the company, which has core operations are in the U.S., West Africa and Israel, rose 7.4% to 231,000 barrels of oil equivalent a day.

Crude-oil and condensate sales volume jumped 62% as realized prices fell 5.3% to $99.67.

Shares closed at $84.91 Wednesday and were inactive premarket. The stock is off 15% over the past three months.

Copyright (c) 2012 Dow Jones & Company, Inc.


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