2007 Credit Suisse Energy Summit. February 5 9, 2007

Transcription

1 2007 Credit Suisse Energy Summit February 5 9, 2007

2 Noble Energy Well Positioned For The Current Environment High Production Growth From Organic Projects Exploration Directed Towards Significant Resources International Expertise and Relationships Capturing New Opportunities Resource Draining Areas Being Eliminated Differentially Positive Cost Structure Price-resilient Investment Program Significant Financial Flexibility 2

3 A Simplified Business Model For Value Creation High Impact Exploration Deepwater West Africa New Ventures LONG-TERM GROWTH Large Inventory of High Return/ Low Risk Projects Wattenberg / Niobrara / Piceance Buffalo Wallow / Billy Rose NEAR-TERM GROWTH High Quality / Long-lived Assets N. America Onshore International Legacy FOUNDATION 3

4 A Very Different Noble Energy More Stable, Longer-lived Production Production 100% 80% 60% 40% 20% 0% 13% 6% 17% 1% 63% 20% 6% 18% 2% 54% 27% 7% 23% 4% 39% 32% 6% 21% 8% 33% 42% 41% 6% 17% 7% 28% 30% 11% 7% E 2006E Proforma 3% 15% 35% 38% 13% 7% 38% 41% 7% 14% GOM Deepwater GOM Shelf Gulf Coast Midcon/Rockies International 4

5 Noble Energy Is The Lowest Cost Producer In Our Peer Group [1] $ Per Boe NBL Co.1 Co.2 Co.3 Co.4 Co.5 Co.6 Co.7 Co.8 Co.9 Co.10 Co.11 Co.12 Co.13 LOE Transportation Production Tax SG&A 5 [1] Trailing four quarters ended 9/30/06

6 Capital Efficiency And Discipline Mean Substantial Free Cash Flow 2,250 2,000 1,750 1,500 North America 990 ($MM) 1,250 1, ,030 International 335 Total = $1,325MM Cash Flow 2006E [1] Pre-acquisition Organic Capital Acquisitions and Corporate GOM Sale Proceeds Free Cash Flow 2006E 6 [1] Estimate based on First Call consensus figures of November 3, 2006.

7 2007 Capital Program Builds Core Areas While Expanding High Impact Exploration Wattenberg 30% Rockies 13% Deepwater 13% Other Onshore 19% Africa 10% Development 74% Exploration 26% UK/MedSea 7% Corporate 5% Other Int l 3% 7

8 North America Continuous Efficiency (Cost) Improvement Buffalo Wallow Drilling Days Decreased 8% Billy Rose Drilling Days Decreased 13% Buffalo Wallow and Billy Rose Compression Being Installed Wattenberg Drilling Days Decreased 10% Wattenberg, Niobrara and Buffalo Wallow Automation In Use Piceance Pad Operations Improves Drilling Costs 25 50% Bayou Unit Cost Per Well Decreased 35% Rig Optimization Operated Rigs 3-4 Long Term Rigs Remainder 3-6 Months or Less 2 Deepwater Rigs ENSCO Months, 18 Months Net NBL (2Q09 Delivery) Diamond Ocean Quest 24 Month Extension Beginning 1Q07 8

9 Substantial Global Resource Potential North America Total Proven Reserves (12/31/05): 425 MMBoe Total Unproven Resource Inventory (12/31/05): 515 MMBoe Northern Region Number of Potential Projects 16,990 Unrisked Net Potential Resources (MMBoe) 380 Southern Region (2006 Program) Number of Potential Projects 253 Unrisked Net Potential Resources (MMBoe) 135 9

10 Substantial Global Resource Potential International Total Proven Reserves (12/31/05): 381 MMBoe Total Unproven Resource Inventory (12/31/05): 489 1,484 MMBoe North Sea Unrisked Net Potential Resources (MMBoe) China Unrisked Net Potential Resources (MMBoe) Ecuador Unrisked Net Potential Resources (MMBoe) Israel Unrisked Net Potential Resources (MMBoe) West Africa Unrisked Net Potential Resources (MMBoe) 373 1,204 10

11 North America Program Expansion Onshore 43% 2003 North America Capital Development 33% North America Gross Well Activity Offshore 57% Exploration 67% North America Capital (700% Increase Over 2003) Onshore 88% Offshore 12% Development 57% Acquisition 30% Exploration 13% Onshore Offshore 11

12 Northern Region 2006 Activity Summary Washakie Basin Wind River Basin Piceance Basin San Juan Basin Anadarko Basin Bowdoin Dome Wattenberg DJ Basin NE Colorado Nebraska DJ Basin Wattenberg Legacy 204 Well Drilling Program 601 Refracs, Trifracs and Recompletions Wattenberg USX April Dec Well Drilling Program 73 Refracs and Recompletions San Juan 18 Mesaverde/Dakota/Fruitland Coal Well Drilling Program Niobrara 50 Well Drilling Program Legacy 20 Non-operated Wells Legacy 20 Well Drilling Program Teton Bowdoin 25 Well Drilling Program Piceance 39 Well Drilling Program Iron Horse 6 Well Drilling Program Siberia Ridge 2 Well Drilling Program Anadarko Basin 101 Well Drilling Program Currently Operating 13 Drilling Rigs and 32 Completion Units 12

13 Patina Assets Exhibiting Strong Performance Patina Announcement 12/16/2004 3Q06 3Q06 Patina & USX Potential Resources (MMBoe) Production Growth (%) 6.1% 8.4% 15.3% Trailing 12 Months Wattenberg Basin Central Kansas Uplift Basin Illinois Basin San Juan Basin Permian Basin Anadarko & Ardmore- Marietta Basins 13

14 Wattenberg Performance Able To Withstand Commodity Cycles Actual 2005 Wattenberg Capital Program $178MM 125% 100% 105% 150% 125% 134% 135% AFIT IROR 75% 50% 25% 28% 52% AFIT IROR 100% 75% 50% 25% 87% 83% 82% 46% 46% 32% 26% 33% 15% 18% 0% $3 & $40 Flat $4 & $50 Flat Nymex Strip [1] 0% Drilling Refracs Trifact Recompletes $3 & $40 Flat $4 & $50 Flat Nymex Strip [1] 14 [1] As of April 18th.

15 Southern Region Activity Summary Deepwater Development Swordfish Oct Ticonderoga Feb Lorien Apr Deepwater Exploration 2006 Drilling Redrock, Raton, Raton South 2007 Drilling Plan 2-4 Exploration Wells Gulf Coast Onshore South Louisiana Maturing High Impact Deepwater Prospects South Texas Expanding Yegua Play West Texas South Robertson Waterflood 15-20% Production Increase 2005 to 2006 Eastern Mid Continent 146 Development Wells in Exploration Wells in New Albany Shale Wells in 2006 West Texas South Texas Kansas Central Oklahoma Illinois & Indiana South Louisiana 2006 Deepwater Drilling 2007 Deepwater Drilling Deepwater Development Onshore Drilling Locations 15

16 International Continues To Deliver Strong Growth Stable, Low-cost and High Margin Production from Legacy Projects YTD 3Q06 Average International Unit Opex of $3.93/Boe YTD 3Q06 Average International Unit DD&A of $2.92/Boe New Projects Creating Additional Potential Blocks O and I Cameroon Suriname Dumbarton International Generating Free Cash Flow Reserves Production Operating Income BFIT Percent Growth H06 0% 200% 400% 600% 800% 1000% 16

17 North Sea Contributing To International Growth Strong Production Growth in 2007 Successful Start-up of Dumbarton in January Increased Ownership in MacCulloch Successful Appraisal of Flyndre 15/14, 15 NBL: 100% Dumbarton NBL: 30% Exploration Blocks Producing Fields Development Fields MacCulloch NBL: 6.5% New Entry into Norway Fiddich NBL: 10% Opportunities to Expand Fiddich Selkirk North Channel Morgan 21/20b NBL: 50% Cook NBL: 12.88% 28/5a NBL: 76.75% Flyndre NBL: 22.5% 22/22b NBL: 30.5% Norway 1/5a NBL: 15% Hanze NBL: 15% [1] Non-GAAP measure, see appendix. 17

18 Israel Significant Milestone Reached Reliable Secure Energy For The Future YTD 3Q06 Gross Sales of MMcfpd Five Wells Capable of 480 MMcfpd Facilities Capacity 600 MMcfpd Mediterranean Sea Haifa Hagit Alon Tavor 18 Peaking Gas Commanding Higher Prices Low Cost Production (YTD 3Q06 ) ~$0.41/Mcf DD&A ~$0.26/Mcf Operating Costs Production Growing with Infrastructure Completion Super Well Currently Being Completed Resuming Exploration with High Impact Prospect Scheduled for Late 2007 Noa Mari-B Ashkelon Egypt Ashdod Israel 2005 Average Tel Aviv / Ashdod Expansion Hagit / Gezer New and Existing Industrial Customers Gezer Zafit Tel Aviv R. Hovav Jerusalem Dead Sea Works

19 Equatorial Guinea Building A Solid Position Alba Production Reaches Record Levels YTD 3Q06 $281MM Cash Flow [1] Alba Field (34% WI) 296,526 Acres Pipeline BUEA VICTORIA Oil Rim Development Continues Methanol YTD 3Q06 $39MM Cash Flow [1] Methanol Plant (45% WI) LPG Plant (28% WI) MALABO BIOKO ISLAND Cameroon Equatorial Guinea BLOCK 0 (45% WI) 437,871 Acres YTD 3Q06 85 MMGal Sales Expansion to Add 300 Tons Per Day BLOCK 1 (40% WI) New Exploration Opportunities Belinda Block O Discovery 4Q05 199,167 Acres Completed Block O & I Infill Seismic Multiple Prospects Provide Significant Upside at Reduced Risk [1] Non-GAAP measure, see appendix. 19

20 Adriana SW Prospect Block O Equatorial Guinea Adriana SW Adriana Adriana SW 19 Miles O-1 Belinda Technical Operator: Noble Energy NBL WI: 51% Risk: Pg 0.50 Acreage: P25 20,130 Acres P75 12,420 Acres Resources: P MMBoe P75 85 MMBoe Water Depth: 1,500 Ft. 20

21 Belinda Appraisal Prospect Block O Equatorial Guinea O-1 Belinda Appraisal Belinda Appraisal 4.4 Miles Technical Operator: Noble Energy NBL WI: 51% Risk: Pg 0.85 Acreage: P25 12,250 Acres P75 8,800 Acres Resources: P MMBoe P MMBoe Water Depth: 1,700 Ft. 21

22 Benita Prospect Block I Equatorial Guinea Benita Benita Miles 11.2 Miles Technical Operator: Noble Energy NBL WI: 40% Risk: Pg 0.53 Acreage: P25 9,700 acres P75 7,400 acres Resources: P MMBoe P MMBoe Water Depth: 2,900 Ft. 22

23 West Africa Drilling Program Songa Saturn Mobilization: Early February 2007 Spud Adriana: Late February Early March Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Adriana Benita Well #3 Well #4 Well #5 Well #6 Prospect Inventory Belinda Appraisal Diega Isabella Felicita Arabella Yoyo Pilar Delineation Wells Option #1 Dry Hole Option #2 Test and T&A Note: One or more wells may have side tracks as part of the testing program. 23

24 A Changed Company And An Industry Leader A Balanced and Diversified Portfolio Long-lived Production Base Multiple Sources of Growth Sector Leading Performance Production Growth Cost Improvements Growth Opportunities Value Accretion More Obvious 24

25 Forward-looking Statement 25 This presentation/communication may include projections and other forward-looking statements within the meaning of the federal securities laws. Any such projections or statements reflect Noble Energy s current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected, and actual results may differ materially from those projected. Risks, uncertainties and assumptions that could cause actual results to differ materially from those projected include, without limitation, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other action, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy s business that are detailed in its Securities and Exchange Commission filings. In addition, in connection with the recent merger of Patina Oil & Gas Corporation into a subsidiary of Noble Energy, additional risks, uncertainties and assumptions include the possibility that problems may arise in successfully integrating the businesses of the two companies and the possibility that the combined company may be unable to achieve cost-cutting synergies. Noble Energy assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law. This presentation also contains certain forward-looking non-gaap measures of financial performance that management believes are good tools for internal use and the investment community in evaluating the company s overall financial performance. These non-gaap measures are broadly used to value and compare companies in the crude oil and natural gas industry. This presentation contains forwardlooking non-gaap financial measures identified as discretionary cash flow and discretionary cash flow per share (utilizing current shares outstanding). The GAAP measure most comparable to discretionary cash flow is net cash provided by operating activities (net operating cash). Net operating cash is not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort. The reconciling information that is unavailable would include a forward-looking balance sheet prepared in accordance with GAAP. The probable significance of having a forwardlooking GAAP balance sheet is estimated to be a variance of plus or minus 10 percent of the forwardlooking discretionary cash flow in this presentation. For additional information website

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27 Appendix

28 Disclosure and Reconciliation of Non-GAAP Measures Cash Flow North Sea YTD 2006 ($MM) FY05 ($MM) Cash Flow From North Sea Operations [1] $ 75.4 $ Less: DD&A and Accretion of ARO Exploration Expense Operating Income $ 59.3 $ 88.5 [1] The table above reconciles cash flow from North Sea operations to operating income. While cash flow from operations is not a GAAP measure of financial performance, management believes it is a good tool for internal use and the investment community in evaluating the company s overall financial performance. Among management, professional research analysts, portfolio managers and investors, cash flow from operations is broadly used as an indicator of a company s ability to fund business activities and meet financial obligations. Cash flow from operations is also commonly used as a basis to value and compare companies. 28

29 Disclosure and Reconciliation of Non-GAAP Measures Cash Flow Equatorial Guinea YTD 2006 Methanol Operations ($MM) Field Operations ($MM) Cash Flow From Operations [1] $ 39.1 $ Less: DD&A and Accretion Exploration Expense Natural Gas Sales 4.6 (4.6) Income from Equity Investees - (108.9) Operating Income $ 27.4 $ [1] The table above reconciles cash flow from operations to operating income. While cash flow from operations is not a GAAP measure of financial performance, management believes it is a good tool for internal use and the investment community in evaluating the company s overall financial performance. Among management, professional research analysts, portfolio managers and investors, cash flow from operations is broadly used as an indicator of a company s ability to fund business activities and meet financial obligations. Cash flow from operations is also commonly used as a basis to value and compare companies. 29

30 Hedge Positions Crude Oil Production Instrument Volumes Avg. Price Period Type (Bpd) Index ($ Per Bbl) 4Q way Collar 1,100 WTI $ Q 2006 Swaps 16,600 WTI FY 2007 Swaps 17,100 WTI FY way Collar 6,748 Brent FY way Collar 2,700 WTI $74.30 FY 2008 Swaps 16,500 WTI FY way Collar 4,066 Brent FY way Collar 3,100 WTI $72.40 FY way Collar 3,074 Brent FY way Collar 3,700 WTI FY way Collar 3,500 WTI

31 Hedge Positions Natural Gas Production Instrument Volumes Avg. Price Period Type (Mcfpd) Index ($ Per MMBTU) 4Q 2006 Swaps 170,000 Nymex Q way Collar 10,000 CIG FY 2007 Swaps 170,000 Nymex 6.04 FY way Collar 12,000 CIG FY 2008 Swaps 170,000 Nymex 5.67 FY way Collar 14,000 CIG FY way Collar 15,000 CIG FY way Collar 15,000 CIG

32 Hedge Positions Natural Gas Differentials Production Period Instrument Type Volumes (Mcfpd) Avg. Price ($ Per MMBTU) 4Q 2006 Swaps (CIG Vs. Henry Hub) 70, Q 2006 Swaps (ANR-OK Vs. Henry Hub) 20, FY 2007 Swaps (CIG Vs. Henry Hub) 100, FY 2007 Swaps (ANR-OK Vs. Henry Hub) 30, FY 2007 Swaps (PAN-OK Vs. Henry Hub) 10, FY 2008 Swaps (CIG Vs. Henry Hub) 100, FY 2008 Swaps (ANR-OK Vs. Henry Hub) 40, FY 2008 Swaps (PAN-OK Vs. Henry Hub) 10,

33 Northern Region Key Potential Resource Exposure Working Interest Number of Potential Projects Unrisked Net Potential Resources (Bcfe) Wattenberg Codell Drilling + 94% 2, Wattenberg Codell Refrac/Trifac + 94% 3, Wattenberg Niobrara Program + 94% 4, USX Program + 80% 3, Piceance 10-acre Development % Iron Horse 160-acre Development + 55% Bowdoin 80-acre Spacing + 65% Acreage Earnings Agreement (Teton) + 75% 1, Anadarko Basin Program + 85% Additional Acquisitions/Expansions Total 16,990 2,280 33

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