2009 Credit Suisse Energy Summit February 2-6, 2009

Transcription

1 2009 Credit Suisse Energy Summit February 2-6, 2009

2 Noble Energy Focused on long-term value creation Run a Diversified Portfolio of Assets Multiple plays and markets Able to self fund reinvestment opportunities Resilient to price volatility Manage a Best in Class Exploration Process Focused on Meaningful Opportunities Commit to Disciplined Investment Retain capacity for additional opportunities Keep balance sheet strong Hedge appropriately By-pass high cost pays Maintain Competitive Cost Structure 2

3 Total Net Unrisked Resources Diverse opportunity set across risk spectrum BBoe (31.8 Tcfe) World-class International Assets Discovered significant resources in West Africa and Israel Further exploration opportunities with extensive running room BBoe 4 Exploration An Improved Deepwater GOM Position with OCS Lease Sale Gunflint discovery largest ever in GOM 2 Emerging U.S. Resource Plays Extensive Acreage in Onshore U.S. Resource Plays Discovered Unbooked Added 400,000 net acres in 2008 at average cost of $160 per acre Proved* 0 May 2008 * Prior year-end reserves, 880 MMBoe 3

4 Exploration Positioning Noble Energy for the next decade Executing a Best in Class Exploration Process Technology and people 160 Exploration Resources Predicted vs. Found Portfolio and risk management Focusing on Large Resource Opportunities Exposure to new legacy assets Leveraging Exploration Success Large acreage positions with similar plays Net MMBoe estimated unrisked net resources of 345 MMBoe E Risked Predicted - Annual Avg. (3 Yr.) Found - Annual Avg. (3 Yr.) 4

5 Commitment to Disciplined Investing Growth while planning for the future 5-year Discretionary Cash Flow* 5-year Free Cash Flow Through 2007 of $1.3 Billion Accelerated Programs Original Capital Program Incremental Opportunities Built Inventory of Future Projects Free Cash Flow Grew Dividends and Repurchased Stock Reduced Debt / Book Cap to 26% at End of 3Q08 Dividends, Stock Buyback, Other Built Cash to ~ $1 Billion at End of 3Q08 * Excludes corporate acquisitions. Non-GAAP measure. See Appendix. 5

6 Managing Costs Leads to Better Margins Competitive advantage generated over time Cash Costs* DD&A $ / Boe $ / Boe YTD 3Q YTD 3Q08 NBL Peers NBL Peers Cost Focus and Asset Quality Drives Results 29% Better than Peers in 2008 Continued Efforts to Improve Effective Investment 28% Better than Peers in 2008 * OPEX, Production Taxes, Transportation, and G&A 6

7 Reducing Volatility and Protecting Returns Effective risk management Ensure Cash Flow to Support Future Capital Needs Protect Returns on Price Sensitive Projects and Acquisitions Patina Acquisition Hedges Expired in 2008 Enhancing 2009 Pre-tax Cash Flow by at Least $450 MM 100 Average Hedge Price 10 Sales Volumes Crude Oil ($/Bbl) U.S. Natural Gas ($/MMbtu) Liquids Unhedged Liquids Hedged US Gas Hedged International Gas US Gas Unhedged Crude Oil Natural Gas 7

8 2009 Capital Program Continuing to build for the future Preliminary Capital Budget of $1.6 Billion Could be adjusted +/ % Retaining Flexibility in the Program Less Focus on Near-term Volume Growth Especially N.A. Natural Gas Shifting More Capital into Longer Term Investments Deepwater GOM West Africa Israel/North Sea/China Exploration Modest Shift to International Preliminary 2009 Capital Long-term Near-term International United States 8

9 International Legacy assets and long-term growth potential Portfolio Generating Free Cash Flow for Reinvestment Low cost, long-lived properties that require little maintenance capital Development and planning underway on discoveries in EG and Cameroon Significant exploration prospects New Venture Program Identifying and Evaluating New Leads Large blocks of unexplored acreage still available 9

10 Israel Mediterranean Sea Significant new discovery Cyprus Tamar 36% WI Lebanon 12.5 miles Tamar-1 Tamar-1 Haifa Dalit 36% WI Hunter Egypt Mari-B 47% WI Tel Aviv Natural Gas Discovered at Tamar More than 460 feet net pay 3 high-quality lower Miocence reservoirs Resource estimate at least 3.1 Tcf gross WD 5,500 feet, TD 16,100 feet Awarded Licenses Testing and Evaluation Underway One to Two Additional Wells May Follow 10

11 Israel Mediterranean Sea Long-term volume growth expectations Sales Growth Every Year, Up 25% in 2008 Mari-B Deliverability 600 MMcf/d from 6 Wells 800 Infrastructure and Markets Continue to Expand Natural Gas Demand Source: Israel NGA MMcf/d Demand Requiring Added Gas Commitments Robust Market for Monetizing Uncommitted and New Gas Market prices continue to improve 20-25% reserves still uncommitted Provides incentive for new exploration Mari-B Contracts Est Imports Est Demand 11

12 West Africa Generating multiple growth opportunities West Africa Alba Operations Net volumes 215 MMcf/d, 23 MBbls/d Exceptional Exploration Track Record 10 wells successful out of 11 drilled 6 new fields discovered (Belinda, Benita, Yo-Yo, Yolanda, Felicita, Diega) 2 oil reservoirs and 5 gas condensate reservoirs Alba 34% WI Cameroon Development Planning Underway Additional Exploration Provides Further Upside Methanol Plant 45% WI LPG Plant 28% WI Bioko Island Cameroon Equatorial Guinea Block O 45% WI Block I 40% WI PH-77 50% WI 12

13 Equatorial Guinea Drilling Activity Previous success reduces risk of follow-up opportunities Benita Down Dip Oil Appraisal 42 feet net oil pay Moved LKO down 28 feet 6,250 B/d; 5.4 MMcf/d Bioko Island Block O Belinda Felicita Carmen Felicita Discovery Identified gas condensate sands Diega Discovery Primary zone encountered 38 feet net gas condensate pay I-4 Diega Discovered untested feature with 37 feet net oil pay, and 30 feet net gas condensate pay Benita Block I Yolanda Currently Drilling the Carmen Prospect in Block O 13

14 West Africa Development Significant impact from 2007 discoveries Net Capital* $1.6 - $2.2 B Engineering Studies Underway Scenarios better defined Phased-in approach Overall liquid content 40% High-quality reservoirs Accelerating Benita Oil Discovery Project sanction 2009; first oil Net Resources* (Mean) F&D, $ / BOE* 270 MMBoe $ $8.00 Net Production* Gas Monetization Options Being Evaluated MBoe/d *Excludes impact of additional resources found with Felicita and Diega discoveries Assumes: Gross Production - Benita in 2012 of 50 MB/d (5 wells); Belinda in 2014 of 80 MBoe/d (5 wells); YoYo in 2014 of 30 MBoe/d (2 wells) and Yolanda in 2014 of 40 MBoe/d (3 wells) 14

15 North Sea UK Additional development opportunities Successful Start-up of Dumbarton Using GPIII FPSO Payback reached in 14 months Dumbarton 30% WI Lochranza 30% WI MacCulloch 14% WI Production Growth Through 2010 Dumbarton phase 2 and Lochranza MacCulloch infill Numerous tiebacks / appraisals 15

16 Deepwater Gulf of Mexico Significant exploration upside with ongoing development 325,000 Net Acres Significant Oil Discovery at Gunflint Currently Drilling Santa Cruz Exploration Potential >1 BBoe Net Unrisked Test with 2-4 wells per year Focus on more material opportunities Multiple Discoveries in Various Stages of Development Texas Louisiana NBL Interests Producing Discovery Lorien 60% WI Raton 67% WI South Raton 62% WI Redrock 67% WI Tortuga 57% WI Swordfish 85% WI Isabela 33% WI Lost Ark 48% WI Ticonderoga 50% WI Gunflint 38% WI 16

17 Gunflint Mississippi Canyon 948 Noble Energy s largest GOM discovery to-date Well-imaged Miocene Subsalt 4-way Closure with Multiple Objectives Louisiana On Trend with Recent Industry Discovery Significant Oil Discovery More than 550 feet net pay, twice as thick as originally expected Tubular Bells Kodiak Devil s Tower Multiple high-quality reservoirs Pre-drill gross resources MMBoe (P75-25) Bob North Water depth 6,100 feet Well depth 29,300 feet Gunflint 37.5% WI Acquiring Additional Seismic and Preparing for Appraisal

18 Onshore United States A stable foundation with multi-year growth Multi-year Inventory of Exploitation and Development Projects Piceance Wattenberg Tri-State New Albany Position in Conventional and Unconventional Plays Continue to Expand Mid-Con Focused Cost and Completion Improvements East Texas Execution of Repeatable Long-lived, Strong Return Opportunities 18

19 Wattenberg Field A true Resource Play CO NBL s Largest Onshore U.S. Field Continues to Grow Denver ~ 5% annual growth over the next 5 years 1,200 projects in 2008 Net Unrisked Resources of 4.4 Tcfe Proved and discovered 3.3 Tcfe, net 15-year plus project inventory Strong Economics 45% liquids, 55% natural gas Low operating cost F&D $1.60/Mcfe Improving and Expanding Infrastructure 19

20 Wattenberg Drilling & Completion Efficiencies Continual improvement with latest technology NBL Pacesetter for Completion Practices Over 30% Decrease in Drill Times Since 2005 NBL Engineers On-site to Manage the Process 6 of Top 10 Footage Rigs in U.S. Contracted for NBL* Further Efficiency Gains with ADR Rigs and Coil Tubing 60% New Drills with Initial Production Rate > 1 MMcfe/d 55% 8 Number of Days (Spud to Spud) 40% 28% 32% % 16% 2 0% E *Source: The Land Rig Newsletter, February

21 Piceance Basin Significant resource opportunity Significant Volume Growth Up over 80% from 2007 Two Drilling Rigs Operating New build fit for purpose Reduced drill times and well costs Net Unrisked Resources of 2.4 Tcfe Proved and discovered 1.7 Tcfe, net > 1, acre infill locations Deeper potential Parachute Rulison CO Grand Valley Mamm Cr Denver Colorado River Battlement Mesa Rulison S Rulison S Grand Valley Brush Creek Field 21

22 Important Messages About Noble Energy Unrecognized potential and value Exploration Portfolio Growing Rapidly in Value Diversity and Depth of Visible Growth Projects Resource Base Has Dramatically Expanded Breadth of Organization s Capabilities Well-positioned to Deliver Differential Value Growth 22

23 Forward-looking Statement and Non-GAAP Measures 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. Words such as anticipates, believes, expects, intends, will, should, may, and similar expressions may be used to identify forward-looking statements. 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 forward-looking 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 forwardlooking balance sheet prepared in accordance with GAAP. The probable significance of having a forward-looking GAAP balance sheet is estimated to be a variance of plus or minus 10 percent of the forward-looking discretionary cash flow in this presentation. For additional information website 23

24 Appendix

25 Crude Oil Hedges Fixed Price Swaps Weighted Production Volumes Average Price Period Index (Bopd) ($ per Bbl) 3Q 2008 WTI 16,500 $ Q 2008 WTI 16,500 $ Q 2008 Brent 2,000 $ Q 2008 Brent 2,000 $ way Collars Weighted Average Volumes Price ($ per Bbl) Index (Bopd) Floor Ceiling WTI 3,100 $ $72.40 WTI 3,100 $ $72.40 Brent 3,848 $ $ Brent 3,587 $45.00 $65.90 FY 2009 WTI 9,000 $88.43 Brent 2,000 $87.98 WTI 6,700 $ $90.60 Brent 5,074 $ $87.93 FY 2010 WTI 5,500 $ $

26 Natural Gas Hedges Production Period Fixed Price Swaps Index Volumes (MMBtupd) Weighted Average Price ($ per MMBtu) 2-way Collars Weighted Average Volumes Price ($ per MMBtu) (MMBtupd) Floor Ceiling 3Q 2008 NYMEX 170,000 $5.33 CIG 14,000 $ $8.70 4Q 2008 NYMEX 170,000 $5.63 CIG 14,000 $ $8.70 FY 2009 NYMEX 170,000 $ $10.81 CIG 15,000 $ $9.90 Index FY 2010 CIG 15,000 $ $8.10 Production Period Index Basis Swaps Volumes (MMBtupd) Weighted Average Price ($ per MMBtu) FY 2008 CIG 100,000 ($1.66) FY 2008 ANR 40,000 ($1.01) FY 2008 PEPL 10,000 ($0.98) FY 2009 CIG 140,000 ($2.49) FY 2010 CIG 50,000 ($1.92) 26

27