Noble Energy prizes petroleum and has the reserves to prove it. Noble looks for oil and natural gas and produces and markets them in the US and internationally. US operations are focused on the Denver-Julesberg Basin and Marcellus Shale, and the Gulf of Mexico. The company's international operations include onshore and offshore activities in the Asia/Pacific region, the Middle East, the Mediterranean, West Africa, and the North Sea. In Noble reports proved reserves of about 1.4 billion barrels of oil equivalent. The company markets natural gas, NGLs, and oil. In 2017 Noble Energy bought Clayton Williams Energy for $2.7 billion.
The company is a leading independent energy company engaged in worldwide oil and gas exploration and production. Its 2015 proved reserves mix included 35% global liquids (crude oil and NGLs), 33% international natural gas, and 32% US natural gas. International operations accounted for more than 30% of its total sales volumes in 2015 and 88% natural gas and 12% crude oil and condensate.
In 2015 the company conducted exploration activities in domestic and international locations including the Deepwater Gulf of Mexico, offshore West Africa, and offshore the Falkland Islands.
Noble's five core areas are the Denver-Julesberg (DJ) Basin (onshore US); the Marcellus Shale (onshore US); the deepwater Gulf of Mexico (offshore US); offshore West Africa; and offshore Eastern Mediterranean. Outside of the US it has offices in Cameroon, China, Cyprus, Equatorial Guinea, Israel, Nicaragua, and the UK.
The US accounted for 64% of the company's 2015 revenues; West Africa, 20%; and Eastern Mediterranean, 16%.
Sales and Marketing
Crude oil, natural gas, condensate and NGLs produced in the US are sold under short-term and long-term contracts at market-based prices adjusted for location and quality. Crude oil and condensate are distributed through pipelines and by trucks and rail cars to gatherers, transportation companies and refineries.
Deepwater Gulf of Mexico production is sold under short-term and long-term contracts at market-based prices. Onshore production of crude oil and condensate are distributed through pipelines and by trucks and rail cars to gatherers, transportation companies and refineries. Gulf of Mexico production is distributed through pipelines.
In Israel, Noble sells natural gas from the Mari-B, Noa and Pinnacles fields, and have contracted to sell natural gas from the Tamar field, under long-term contracts.
The company's UK North Sea crude oil production is transported by tanker and sold on the spot market. In China, it sells crude oil into the local market through pipelines under a long-term contract at market-based prices.
Sales to Glencore Energy accounted for 18% of 2015 total oil, gas, and NGL sales. Shell Trading (US) Company and Shell International Trading and Shipping Limited accounted for 11% of 2015 total oil, gas, and NGL sales, or 18% of crude oil sales.
In 2015 net sales declined by $1.9 billion compared to 2014.
Revenues from crude oil and condensate sales decreased due to the decline in global crude oil prices that began in the second half of 2014 and continued in 2015; and a decrease in sales volumes due to planned downtime and maintenance as well as natural field decline in the Deepwater Gulf of Mexico and the Aseng field, offshore Equatorial Guinea.
Revenues from natural gas sales dropped due to a decrease in realized natural gas prices, primarily due to oversupply; and a widening of location basis differentials in the Marcellus Shale due to an oversupply.
Revenues from NGL sales decreased due to lower NGL prices.
In 2015 Noble incurred a net loss of $2.4 billion compared to a net income of $1.2 billion incurred in the previous year. The primary reason was due to decreased sales and goodwill impairment expense partially offset by a lower income tax provision.
In 2015 the company incurred a goodwill impairment charge of $779 million.
Net cash provided by the operating activities decreased by $1.4 billion.
Noble focuses on organic growth from exploration and development drilling and augments that with a periodic, opportunistic new business development (mergers and acquisitions). The company is continuing its program to drilling higher value extended-reach laterals in both the DJ Basin and the Marcellus drilling. In 2016 the company spun off Noble Midstream Partners to manage its midstream assets the DJ Basin.
To manage the portfolio for superior returns and to ensure geographic portfolio diversification, it periodically sells non-core assets.
Noble signed a gas sales deal with Arab Potash and Jordan Bromine (both of which are located in Amman, Jordan) in 2014 to supply them (beginning with 2016) with gas from the Tamar field, offshore Israel.
To raise cash to help with the Clayton Williams purchase, in 2017 Noble agreed to sell its Appalachian natural gas assets for $1.2 billion.
In 2016 Noble signed a definitive agreement to divest certain oil and natural gas properties (33,100 primarily undeveloped net acres) in the Greeley Crescent area of Weld County, Colorado to Synergy Resources for $505 million. That year it also divested its 47% working interest in the Alon A and Alon C offshore Israel licenses, which include the Karish and Tanin fields, to the Delek Group for $73 million.
The company planned to drill two to three prospects in 2016 while being focused on its capabilities on adding high-quality inventory to its portfolio.
In 2015 Noble added two new core operating areas, the Eagle Ford Shale and the Permian Basin, as a result of its acquisition of Rosetta Resources. It also looking to enter other potential new core areas and are conducting exploration activities in locations such as the Falkland Islands, Cameroon, Suriname and Gabon.
During 2015 the company continued its non-core asset divestiture program with the sale of certain smaller onshore US property packages for $151 million.
In 2014 the company spun off CONE Midstream Partners in 2014 with net proceeds of $200 million to Noble. CONE Midstream Partners should provide an efficient vehicle for future development of the midstream infrastructure needed to support Marcellus development. Both Noble and CONSOL Energy retained 32% stakes in the partnership.
Mergers and Acquisitions
Boosting its shale oil and gas assets, in 2015 Noble acquired Rosetta Resources in an all-stock transaction valued at $2.1 billion, plus the assumption of Rosetta's net debt of $1.8 billion. Rosetta's liquids-rich asset base includes 50,000 net acres in the Eagle Ford Shale and 56,000 net acres in the Permian (46,000 acres in the Delaware Basin and 10,000 acres in the Midland Basin).
Growing its Gulf of Mexico portfolio, in 2014 the company acquired working interests in 17 deepwater exploration leases in the Atwater Valley protraction area, Deepwater Gulf of Mexico. It bought a 50% working interest in 13 leases and an average 26% working interest in four leases.