Noble Energy Closes on GOM Asset Sale

Noble Energy, Inc. on Friday closed on the previously announced $625 million sale of its Gulf of Mexico shelf assets to Coldren Resources LP. The sales price is subject to adjustments from the effective date of March 1, 2006, to the closing date.

After-tax cash proceeds from the sale are expected to total $504 million, including proceeds to be received from parties who exercised preferential rights to purchase certain minor properties. For the full year 2006, the company expects to record an after-tax loss of $155 million, which includes a pretax gain of approximately $215 million offset by the following non-cash items:

--Pretax charge of approximately $400 million related to cash flow hedges associated with shelf production that are currently included in equity as accumulated other comprehensive losses (AOCL)
--A net tax benefit of about $30 million.

During the second quarter of 2006, Noble expects to recognize the non-cash charge of $400 million pretax, or $250 million after tax. By recognizing the AOCL during the second quarter, future North America revenues will be positively impacted from the closing date until the end of 2008, estimated as follows:

--July through Dec. 2006: $37 million
--FY 2007: $183 million
--FY 2008: $180 million

As a result of the sales of the Gulf of Mexico properties, Noble expects to recognize pretax gains of $215 million, $95 million after tax, during the third quarter of this year. The effective tax rate of 56 percent on the gain on sale reflects the write-off of approximately $100 million of goodwill that cannot be deducted for tax purposes.

The above discussion of the after-tax cash proceeds and loss associated with the Gulf of Mexico shelf sale may be subject to change due to customary post-closing adjustments and final analysis of assets and liabilities associated with the sale.

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. Noble Energy markets natural gas and crude oil through its subsidiary, Noble Energy Marketing, Inc.

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