Noble Energy, Inc. NBL is expected to beat expectations when it reports first-quarter 2015 earnings results before the opening bell on May 5, 2015.
Last quarter, Noble Energy recorded an 8.57% positive earnings surprise. Let’s see how things are shaping up for the first quarter.
What’s Driving the Upbeat Results?
Noble Energy is an independent oil and gas exploration and production (E&P) company having high-grade hydrocarbon assets across the U.S. and several international locations. The company has operations in five areas – the Denver/Julesburg Basin in onshore U.S., the Marcellus Shale also in onshore U.S., the deepwater Gulf of Mexico (GoM) in offshore U.S., West Africa and Eastern Mediterranean.
In 2014, Noble Energy added total proved reserves of 141 million barrels of oil equivalent, which included extensions, discoveries and revisions. These additions replaced approximately 1.3 times 2014 production. It is focused on exploiting fresh exploration prospects in both the U.S. as well as international locations.
The company is enhancing its efficiency by drilling extended reach laterals which deliver higher recovery and lower well cost per lateral foot. Noble Energy projects 50% of its wells in 2015 to be extended reach.
The company expects increased sales volume from the DJ Basin and Marcellus Shale but slightly lower revenues from the GoM. Moreover, to dodge the risk of fluctuating oil prices, the company had plans to hedge a large portion of global crude oil and the U.S. natural gas production.
Why a Likely Positive Surprise?
Our proven model shows that Noble Energy is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +33.33%. This is because the Most Accurate estimate of 4 cents is higher than the Zacks Consensus Estimate of 3 cents. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: Noble Energy currently carries a Zacks Rank #3 (Hold). The combination of Noble Energy’s Zacks Rank #3 and +33.33% ESP is an indicator of a likely earnings beat this season.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Noble Energyis not the only stock looking up this earnings season. We also see likely earnings beat coming from these oil and gas E&P peers.
Devon Energy Corp. DVN has an earnings ESP of +7.69% and a Zacks Rank #3.
Emerald Oil, Inc. EOX has an earnings ESP of +66.67% and a Zacks Rank #3.
Warren Resources Inc. WRES has an earnings ESP of +71.43% and a Zacks Rank #3.
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