Noble Energy Riding High on 1Q06 Results

Noble Energy, Inc. (NYSE: NBL) reported its highest ever quarterly net income of $226.1 million for the first quarter 2006, an increase of 106 percent compared to $110.0 million reported for the first quarter last year. Earnings per basic share was $1.28 compared to 93 cents for the first quarter of 2005. Discretionary cash flow (non-GAAP measure, see Schedule 2 - Determination of Discretionary Cash Flow and Reconciliation) for the first quarter was $504.0 million, a 129 percent increase over $220.4 million for the first quarter of 2005. Net cash provided by operating activities was $527.5 million. Capital expenditures for the quarter totaled $263.0 million excluding the acquisition of United States Exploration, Inc.

    Noteworthy operating items for the first quarter 2006 include:
     * Successful completion of the acquisition of United States Exploration,
       Inc. in March
     * Daily equivalent sales volumes increase of 77 percent versus first
       quarter 2005
     * Early production from the Ticonderoga deepwater Gulf of Mexico
       development
     * Successful exploration well (Redrock) in the deepwater Gulf of Mexico

Charles D. Davidson, the company's Chairman, President and CEO, said, "Our first quarter results continued our company's trend of delivering outstanding operating and financial performance. Over the past two years, strong organic growth came from international developments in Equatorial Guinea, Israel, China and Ecuador. In 2006, substantial organic growth will come from North America. Our deepwater Gulf of Mexico program is proving to be a substantial contributor with Swordfish, Lorien and Ticonderoga adding new production this year. In addition, our recently announced Redrock discovery and our current exploration well at Raton offer potentially significant upside from our current deepwater portfolio. Onshore in North America, our recent acquisition of United States Exploration will enhance our continuing successful operations in the Wattenberg field, while our Piceance, Buffalo Wallow and Billy Rose programs are adding to our already substantial onshore production."

First quarter 2006 sales volumes increased 77 percent to 186,453 barrels of oil equivalent per day (Boepd), compared to 105,051 Boepd for the first quarter last year. Liquids sales volumes were 80,630 barrels per day (Bpd) compared to 46,583 Bpd for the first quarter of 2005. Natural gas sales volumes were 634,937 million cubic feet per day (MMcfpd) compared to 350,807 MMcfpd last year. Pretax hedge losses of $107.3 million, $69.7 million after tax, lowered realized crude oil and natural gas prices $7.73 per barrel and 90 cents per thousand cubic feet (Mcf), respectively.

North America sales volumes increased 113 percent over the first quarter last year, primarily as a result of the acquisition of Patina Oil & Gas, which closed May 16, 2005. Production from Noble Energy's Swordfish and Ticonderoga deepwater developments, which commenced in October 2005 and February 2006, respectively, contributed approximately 12,000 Boepd during the first quarter of 2006.

International sales volumes increased 40 percent compared to the first quarter of 2005. The increase in international sales volumes was primarily attributable to increased production associated with the Phase 2B liquids expansion project in Equatorial Guinea. Increased natural gas sales in Israel also contributed to increased international sales volumes.

NORTH AMERICA

North America reported pre-tax operating income for the first quarter of $187.5 million, an increase of $106.8 million, or 132 percent, compared to operating income of $80.7 million for the first quarter last year.

Operations benefited from higher sales volumes and higher realized prices during the quarter. First quarter sales volumes increased to 114,296 Boepd from 53,677 Boepd for the same period last year. Liquids sales volumes were 37,205 Bpd compared to 17,927 Bpd for the first quarter of 2005. Natural gas sales volumes were 462,547 MMcfpd compared to 214,500 MMcfpd last year. The average liquids price was $42.20 per Bbl compared to $38.60 per Bbl during the first quarter of 2005. The average realized natural gas price was $6.96 per Mcf compared to $6.54 per Mcf last year.

During the first quarter, the company had 22 drilling rigs running onshore (nine in the Rocky Mountains, 10 in the Mid-continent and three in the Gulf Coast) and 52 workover rigs (27 in the Rocky Mountains and 20 in the Mid- continent and five in the Gulf Coast). Noble Energy plans to drill 778 onshore wells in 2006, of which 53 are to be drilled in the Gulf Coast, 480 are planned for the Rocky Mountains and 245 for the Mid-continent. The company also plans approximately 950 refrac and recompletion projects for 2006, most of which will be in the Wattenberg field.

Noble Energy continues to experience strong growth in the deepwater Gulf of Mexico, where the company has three significant projects that recently began producing. The first of three wells at the company's Swordfish project began production in October. The second project, Ticonderoga, began producing in February 2006. The remaining project, Lorien, began producing during April 2006.

In January 2006, Noble Energy entered into an acreage earning agreement with Teton Energy Corporation. Under the terms of the agreement, Noble Energy will earn a 75 percent working interest in approximately 184,000 acres in the D-J basin by drilling 20 wells on or before March 1, 2007. Upon completion of the first 20 wells, Noble Energy and Teton will split all costs associated with future drilling according to each party's working interest. The acreage included in this agreement is near Noble Energy's Wattenberg field and is northeast of Noble Energy's current operations in the Niobrara producing trend in Yuma County, Colorado.

On March 29, 2006, Noble Energy closed on its agreement to acquire U.S. Exploration Holdings, Inc. for $412 million. The acquisition significantly expands the company's operations in its core Wattenberg field, adding 65,000 net acres to the 218,000 net acres Noble Energy currently owns. Total proved reserves and probable and possible resources are estimated to be approximately 465 billion cubic feet equivalent (Bcfe). Production is expected to grow from the current rate of approximately 20 million cubic feet equivalent per day (MMcfepd) to about 70 MMcfepd by the end of 2007.

INTERNATIONAL OPERATIONS

International operations reported operating income for the first quarter of $211.3 million, an increase of $96.4 million, or 84 percent, compared to $114.9 million in the first quarter last year. First quarter 2006 sales volumes increased 40 percent to 72,157 Boepd from 51,374 Boepd last year. Liquids sales volumes were 43,425 Bpd compared to 28,656 Bpd for the first quarter of 2005. Natural gas sales volumes were 172,390 MMcfpd compared to 136,307 MMcfpd last year.

Equatorial Guinea

Total operating income in Equatorial Guinea increased 137 percent to $147.9 million compared to $62.4 million last year. Total sales volumes in Equatorial Guinea were 40,472 Boepd, net to Noble Energy's interest, compared to 21,435 Boepd during the first quarter of 2005.

Condensate and natural gas sales, exclusive of the Alba Plant, LLC, accounted for $108.2 million, or 73 percent, of operating income from Equatorial Guinea. First quarter 2006 net condensate and natural gas sales volumes averaged 32,348 Boepd compared to 20,638 Boepd last year. The average realized price for condensate during the first quarter was $58.46 per Bbl compared to $44.72 per Bbl for the same period last year.

Alba Plant, LLC reported $27.1 million of income from liquefied petroleum gas and condensate sales, net to Noble Energy's interest, compared to $3.3 million during the first quarter 2005. Net Alba Plant, LLC condensate and LPG sales totaled 8,124 Bpd compared to 797 Bpd for the same period last year. The increase in operating income and production for Alba Plant, LLC reflects the completion and ramp up to full production of the Phase 2B expansion. The average Alba Plant, LLC realized price during the first quarter was $45.07 per Bbl compared to $32.57 per barrel for the same period last year.

Income from methanol operations was $12.5 million, net to Noble Energy's interest, compared to $16.6 million during the first quarter 2005. First quarter 2006 income from methanol operations declined relative to the same period last year due to lower methanol sales as inventory was built up in anticipation of a 46 day plant turnaround and expansion scheduled to begin during the first week of May. The company's share of methanol sales volumes was 34.1 million Gal compared to last year's 43.1 million Gal. First quarter realized methanol prices were 82 cents per gallon (Gal).

North Sea

In the North Sea, operating income for the first quarter of 2006 was $25.7 million compared to $19.7 million last year. In the U.K. sector of the North Sea, the Dumbarton development was sanctioned during the fourth quarter 2005. Noble Energy expects production from Dumbarton to commence during the first quarter of 2007, with net production averaging 9,000 Boepd during 2007.

Israel

First quarter operating income was $14.7 million compared to $10.5 million for the same period in 2005. Natural gas production, net to Noble Energy, averaged 82.6 MMcfpd for the first quarter 2006, compared to 58.7 MMcfpd last year. The increased natural gas sales reflect the conversion of the Eshkol power plant's natural gas turbine from a simple-cycle peaking unit to a combined-cycle base load unit. The average realized natural gas price during the first quarter 2006 was $2.66 per thousand cubic feet (Mcf) compared to $2.78 per Mcf for the same period last year. Lease operating expense averaged 29 cents per Mcf and DD&A averaged 43 cents per Mcf.

Argentina, China, Ecuador and Suriname

Argentina, China, Ecuador and Suriname combined recorded first quarter 2006 operating income of $23.0 million compared to $22.3 million for first quarter last year.

Noble Energy's Machala power plant contributed $7.3 million of operating income during the first quarter 2006 compared to $10.2 million for the same period last year, reflecting a decline in the average electricity sales price of 2.5 cents per kilowatt hour (Kwh) to 7.8 cents per Kwh. For the quarter, electricity sales totaled 229,703 megawatt hours. Noble Energy produced 26.3 MMcfpd of natural gas from the Amistad field during the first quarter of 2006.

In China, first quarter operating income was $15.1 million. Net production in China averaged 4,186 barrels of oil per day for the first quarter. Net production in Argentina averaged 3,681 Boepd for the first quarter.

Noble Energy is one of the nation's leading independent energy companies and operates throughout major basins in the United States including Colorado's Wattenberg field, the Mid-continent region of western Oklahoma and the Texas Panhandle, the San Juan basin in New Mexico, the Gulf Coast and the Gulf of Mexico. In addition, Noble Energy operates internationally in Argentina, China, Ecuador, Equatorial Guinea, the Mediterranean Sea, the North Sea and Suriname.

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