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Noble Energy (NBL) Posts in-Line Q1 Loss, Revenues Lag

Noble Energy, Inc. NBL reported adjusted loss of 53 cents per share for the first quarter of 2016, which came in line with the Zacks Consensus Estimate. In the first quarter of 2015, the company had reported earnings of 3 cents.

On a GAAP basis, the company incurred a loss of 67 cents per share, compared to the year-ago loss of 6 cents. The variance between adjusted and GAAP figures was due to the combined effect of a loss on commodity derivative instruments and assets due to contract termination, along with other adjustments, partially offset by a gain on debt extinguishment.

Total Revenue

Noble Energy's total revenue fell around 5.6% year over year to $724 million in the first quarter. Reported revenues also missed the Zacks Consensus Estimate of $814 million by 11.1%.

Operational Results

In the quarter under review, sales volumes averaged 416 thousand barrels of oil equivalent per day (MBoe/d), reflecting a 31% year-over-year surge. U.S. sales volume comprised 73.6% of the total volume, while international volumes accounted for the rest. In the U.S., the Denver/Julesburg (DJ) Basin and Marcellus Shale continued to be the prime volume drivers.

Noble Energy's total operating expenses during the quarter shot up 27.2% year over year to around $1,146 million mainly due to higher lease operating, transportation & gathering, and exploration expenses, along with higher depreciation.

Interest expenses in the quarter were $79 million, up 38.6% year over year.

Realized Prices

Realized crude oil and condensate prices in the quarter decreased to $31.04 per barrel from the year-ago level of $45.96 owing to lower prices in both the domestic and international markets.

Natural gas realizations decreased to $2.30 per thousand cubic feet (Mcf) from $2.81 in the year-ago period.

Realized prices for natural gas liquids plunged 40.5% to $11.18 per barrel.

Financial Highlights

Noble Energy's cash and cash equivalents as of Mar 31, 2016 were $953 million, compared with $1,028 million as of Dec 31, 2015.

Long-term debt was $7,882 million as of Mar 31, 2016, compared with $7,976 million as of Dec 31, 2015.

Cash flow from operating activities in the quarter stood at $251 million, compared with $541 million last year.

Capital expenditure in the quarter was $374 million, compared with $939 million a year ago.

Guidance

Noble Energy raised its total sales volume guidance for 2016 by 4% to 405 MBoe/d from 390 MBoe/d.

In 2016, the company plans to make capital expenditure of less than earlier expectation of $1.5 billion.

For the second quarter, Noble Energy expects capital expenditure in the range of $350–$400 million and total sales volumes in the range of 405–415 MBoe/d.

Peer Releases

Devon Energy Corporation DVN reported first-quarter 2016 adjusted loss per share of 53 cents, narrower than the Zacks Consensus Estimate of a loss of 60 cents.

PetroQuest Energy Inc. PQ reported a first-quarter 2016 adjusted loss of 30 cents per share, wider than the Zacks Consensus Estimate of a loss of 19 cents.

Anadarko Petroleum Corp. APC reported a first-quarter 2016 adjusted loss of $1.12 per share, narrower than the Zacks Consensus Estimate of a loss of $1.19.

Zacks Rank

Noble Energy currently carries a Zacks Rank #3 (Hold).

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