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 the Asia/Pacific region, the Middle East, the Mediterranean, West Africa, and the North Sea. In 2014 Noble reported proved reserves of about 1.4 billion barrels of oil equivalent. The company markets natural gas, NGLs, and oil.
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 accounts for 62% of the company's 2014 revenues; West Africa, 26%; Eastern Mediterranean, 10%; and other countries, 2%.
The company is a leading independent energy company engaged in worldwide oil and gas exploration and production. Its 2014 proved reserves mix included 31% global liquids (crude oil and NGLs), 36% international natural gas, and 33% US natural gas. International operations accounted for 39% of its total sales volumes in 2014 and 86% natural gas and 14% crude oil and condensate.
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 22% of 2014 total oil, gas, and NGL sales. Shell Trading (US) Company and Shell International Trading and Shipping Limited accounted for 10% of 2014 total oil, gas, and NGL sales, or 15% of crude oil sales.
In 2014 Noble's net revenues increase by 2% due to higher natural gas (25%) and NGL (26%) sales, offset by lower crude oil and condensate revenues due to lower oil prices.
Natural gas sales increased due to higher sales volumes in the Marcellus Shale and Eastern Mediterranean, offset by lower sales volumes due to non-core onshore US property divestures in 2013. NGL revenues were up due to higher sales volumes in the DJ Basin and Marcellus Shale, offset by lower NGL prices linked to crude oil price declines.
In 2014 Noble's net income increased by 24% due to a commodity derivative instrument gain from crude oil.
That year cash from operating activities increased by 19%.
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. 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.
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.