Noble Announces First Quarter 2008 Earnings and Record Volumes

Noble Energy, Inc. reported its first quarter 2008 results. Net income for the quarter was $215 million, or $1.20 per share diluted, on revenues of $1.0 billion. The results included a previously disclosed $218 million ($149 million after-tax) unrealized commodity derivative loss. Excluding this item, first quarter 2008 adjusted net income (a non-GAAP measure, see Schedule 1) was $364 million, or $2.05 per share diluted. For the same period in 2007, the company reported net income of $212 million, or $1.22 per diluted share, on revenues of $743 million.

Discretionary cash flow (a non-GAAP measure, see Schedule 5) for the first quarter 2008 was a record $662 million, compared to $448 million for the same period in 2007. Net cash provided by operating activities was $506 million.

Key highlights for the first quarter 2008 include:

--Record sales volumes of 222 thousand barrels of oil equivalent per day (MBoepd)

--Continued production growth in the Rocky Mountains

--Net natural gas sales in Israel were a record 145 million cubic feet per day (MMcfpd)

--New Ticonderoga development wells brought online in the deepwater Gulf of Mexico

--Successful high bidder on 15 deepwater blocks in Central Gulf of Mexico lease sale 206

"We are experiencing exceptional performance from multiple areas as we begin this new year. Our outstanding first quarter results were driven by strong worldwide growth in production coupled with increasing energy prices. As such, we find ourselves in an excellent position for delivering on our 2008 growth objectives. We are also looking forward to the results of important upcoming exploration programs which include significant wells in West Africa and Suriname, where rigs are already on location, as well as in Israel and the deepwater Gulf of Mexico," said Noble Energy's Chairman, President and CEO, Charles D. Davidson.

Noble Energy's operating income for the quarter was $563 million, an increase of 64 percent over the similar quarter last year. Sales volumes for the quarter averaged 222 MBoepd, up 23 percent over first quarter 2007, with growth coming from both the United States and International assets.

During the quarter, Rocky Mountain volumes reached a record level of 57 MBoepd due to continued drilling success. Deepwater Gulf of Mexico volumes rebounded with strong performance from the development projects at Swordfish and Ticonderoga. Internationally, higher natural gas demand in Israel resulted in record sales in the quarter, and in West Africa, volumes benefited from natural gas sales to the liquefied natural gas facility and the timing of condensate and LPG cargo liftings.

Effective in 2008, Noble Energy began reporting natural gas liquid volumes separately where the company has the right to the liquids recovered from its natural gas processed at third-party processing plants. The effect is evidenced with lower natural gas volumes in the United States compared to 2007. Where the rights do not exist, the processing revenue will continue to be included in natural gas revenues and benefit realized prices.

Worldwide commodity markets were robust during the quarter. On average for the quarter, Noble Energy received $78.89 per barrel for crude oil and condensate, $5.34 per thousand cubic feet for natural gas, and domestic natural gas liquids prices averaged $55.15 per barrel. Crude oil and natural gas realizations for the quarter were impacted by the settlement of commodity derivative contracts.

Production costs, including lease operating, production and ad valorem taxes, and transportation expenses, were $6.83 per barrel of oil equivalent (Boe), a decrease of three percent from the first quarter 2007. Depreciation, depletion, and amortization was $10.05 per Boe, down over one percent. The lower per unit costs benefited from increased volumes in the Rocky Mountains, Israel, and West Africa.

The company also announced an increase to its 2008 capital program from $1.6 billion to $1.9 billion. The incremental $300 million will fund new opportunities that expand its positions in the deepwater Gulf of Mexico, East Texas, and the Rocky Mountains, as well as accelerate the phase two development of the Dumbarton project in the North Sea.