Noble Energy Updates 2004 Performance Guidance

Noble Energy, Inc. (NYSE: NBL) updates its guidance for 2004 expenses and production, including the impact of Hurricane Ivan.

Production from continuing operations for the full year 2004 is expected to increase 15 percent to 16 percent over 2003's average of 92,116 barrels of oil equivalent per day (Boepd). The strong expected increase in year-over- year production is due to several factors:

  • The contribution of the Phase 2A condensate expansion project in Equatorial Guinea, which commenced in November of last year and has been ramping up production throughout 2004;
  • The start-up of natural gas sales in Israel, which commenced in February of this year; and
  • Increased domestic production.

  • Due to Hurricane Ivan, Noble Energy temporarily suspended production operations in the Gulf of Mexico on September 14, 2004. The impact from Ivan on the third quarter's production is estimated to be approximately 2,900 Boepd.

    The Gulf of Mexico accounts for approximately 36 percent of the company's total production. Essentially all of Noble Energy's production operations in the Gulf of Mexico have been resumed, with the exception of Main Pass 293/305/306. As a result of infrastructure damage incurred due to Hurricane Ivan, Main Pass 293/305/306 is expected to remain shut-in for the rest of 2004 pending the design and implementation of a plan to return the field to production. No date has been set for returning Main Pass 293/305/306 to production. Prior to Hurricane Ivan, net production at Main Pass 293/305/306 was approximately 3,400 Boepd.

    Third quarter 2004 production is expected to average approximately 104,400 Boepd which represents a 17 percent increase over third quarter 2003 production from continuing operations of 89,287 Boepd. Increases in production in the third quarter over last year's third quarter included approximately 1,500 Boepd from domestic operations, even after considering the impact of Ivan, and approximately 13,600 Boepd from international operations. Increased international production was the result of volume growth in Equatorial Guinea and Israel offset by approximately 1,600 Boepd of reduced volumes in Ecuador due to extended maintenance at the Machala Power Plant.

    The company estimates fourth quarter 2004 production will be in the range of 103,000 to 107,000 Boepd, which includes an estimated reduction due to Hurricane Ivan of approximately 3,800 Boepd. This fourth quarter estimate assumes there will be no production from Main Pass 293/305/306.

    Guidance for full year 2004 costs and expenses is as follows:

  • Exploration expense is still expected to range from $130 million to $140 million;
  • Selling, general and administrative expense is still expected to range from $1.30 per barrel of oil equivalent (BOE) to $1.50 per BOE;
  • Oil and gas operations expense is still expected to range from $4.50 per BOE to $4.75 per BOE;
  • Depreciation, depletion and amortization is still expected to range from $7.50 per BOE to $8.00 per BOE; and
  • The effective tax rate is still expected to range from 36 percent to 44 percent. Of the total book taxes planned for 2004, 20 percent to 40 percent are expected to be deferred.


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