Noble Energy, Inc. NBL announced that owing to strong performance in the first two months of the fourth quarter, it has raised its fourth-quarter sales volume guidance. The announcement comes at a time when crude prices have hit multi-year lows.
This Houston, TX-based energy company has increased its sales volume projection for the fourth quarter of 2015 to the range of 405–415 thousand barrels of oil equivalent per day (MBoe/d) from the earlier projection of 385–405 MBoe/d. The midpoint of its new estimate represents a 15 MBoe/d boost over the prior projection. In the fourth quarter of 2014, Noble Energy had registered sales volume of 315 MBoe/d.
Noble Energy has capitalized on the before-schedule completion of modernization practices in the DJ Basin and Eagle Ford Shale to drive output. The company’s Big Bend facility in the Gulf of Mexico and Dantzler recently commenced production and have already reached their peak production rate of 20,000 barrels per day of oil equivalent, allowing Noble to significantly boost production. The performance of the company’s other assets in the U.S., West Africa and Israel has also exceeded expectations, according to management.
Keeping in mind the crash in commodity prices, the company is currently focusing on best-return assets to maximize existing facility infrastructure. Recently, Noble Energy announced that Britain’s BG International has agreed to acquire 35% stake in Block 12 for a total cash consideration of $165 million. Noble Energy will continue as the operator of Aphrodite with 35% interest (read: Noble Energy to Sell 35% Stake in Block 12, Cyprus for $165M).
The company stated that the capital budget for 2015 stands unchanged and capital investment in the fourth quarter will be the lowest compared with all the preceding quarters. This will help the company to retain its financial strength and flexibility. Noble Energy has been able to cut costs through supplier negotiations and operational efficiencies. Reduced drilling times are resulting in savings and more number of wells being completed this year.
Shares of Noble Energy climbed 2.35% to close at $33.06 following the announcement.
Zacks Rank
Noble Energy carries a Zacks Rank #3(Hold). Better-ranked peers include Antero Resources Corporation AR and Contango Oil & Gas Company MCF, both sporting a Zacks Rank #1 (Strong Buy); and Devon Energy Corporation DVN, carrying a Zacks Rank #2 (Buy).
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