THIRD QUARTER 2016 SUPPLEMENTAL INFORMATION. Energizing the World, Bettering People s Lives

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Transcription:

THIRD QUARTER 2016 SUPPLEMENTAL INFORMATION Energizing the World, Bettering People s Lives

3Q16 Key Messages and Highlights Operational records and leading execution across the business Third Quarter Sales Volumes of 425 MBoe/d, Up 12% from 3Q15 Crude oil above expectations with significant contributions from the DJ Basin, Gulf of Mexico and West Africa Record Israel sales volumes of 313 MMcfe/d Continuing to Drive Capital and Operating Efficiencies Quarterly capital expenditures of $297 MM, below low end of guidance Reduced LOE on a BOE basis to $3.37, or 14% versus 3Q15 proforma Accelerating High-Return U.S. Onshore Portfolio Doubling rig count in Texas (Increasing to 2 rigs in each of the Eagle Ford and Delaware) Strong DJ, Eagle Ford, Delaware results with enhanced completions Offshore Major Project Start-Ups Growing Cash Flows Outstanding Tamar Performance and Leviathan Moving Toward Sanction in Israel Reached a cumulative 1 Tcf of gas sold at Tamar since first production in 2013 Leviathan gas sales agreement with NEPCO executed Successful IPO of Noble Midstream Partners (NBLX) Distribution to NBL of $297 MM Enhanced Control and Flexibility Over Future Marcellus Investment 2

3Q16 Outperformance Versus Expectation Actuals beat nearly every line item Financial and Operating Metric 3Q Guidance 3Q Actuals Total Sales Volumes (MBoe/d) 405-415 425 Product Mix (Oil / NGL / Gas) 28% / 14% / 58% 29% / 14% / 57% Organic Capital ($MM) 400-450 297 Equity Investment Income ($MM) 25-35 28 Lease Operating ($/Boe) 4.25-4.45 3.37 Transportation, Gathering ($/Boe) 2.90-3.10 2.88 DD&A ($/Boe) 16.00-16.50 15.87 Production Taxes (% Oil, NGL, Gas Revenues) 4.0-4.5 3.4 Marketing & Processing ($MM) 25-30 20 Exploration ($MM) 60-75 125* (44) G&A ($MM) 105-115 95 Interest, net ($MM) 75-85 86 Earnings Reconciliation 3Q ($MM) GAAP Net Loss (144) GAAP Net Loss, Before Tax (280) Adjustments to Net Loss, Before Tax 175 Adjusted Net Loss, Before Tax (105) Current Tax Expense, Adjusted (37) Deferred Tax Benefit, Adjusted 113 Adjusted Net Loss** (30) Cash Flow Reconciliation 3Q ($MM) Adjusted Net Loss** (30) DD&A 621 Interest, net 86 Exploration, Adjusted 44 Current Tax Expense, Adjusted 37 Deferred Tax Benefit, Adjusted (113) Adjusted EBITDAX** 645 * Includes $81 million related to impairment of certain leases in the Gulf of Mexico and the Falkland Islands ** Non-GAAP reconciliation to GAAP measure available in respective earnings release. 3

NBLX: Strategic Midstream Assets Critical assets supporting NBL long-term growth ~340,000 Net Dedicated Acres from NBL and a Third-Party Producer ~300,000* in the DJ Basin ~40,000 in the Delaware Long-term, fixed-fee commercial agreements Currently Provides Diverse Midstream Services Crude oil gathering & treating and natural gas gathering Crude oil transportation (under construction) Water services Targeted 20% Distribution Growth NBL Owns ~55% of NBLX LP Units DevCo Areas Served NBLX Service NBLX Ownership Colorado River Green River Blanco River Laramie River Wells Ranch IDP - DJ East Pony IDP - DJ Mustang IDP - DJ Delaware Basin Greeley Crescent IDP - DJ Natural Gas Gathering Water Services Natural Gas Gathering Water Services Produced Water Services Water Services NBL Ownership 80% 20% 25% 75% 25% 75% 100% 0% San Juan River East Pony IDP - DJ Water Services 25% 75% * Includes 265,000 acres dedicated from Noble and the balance from a 3 rd party. Does not include 85,000 NBL acres in the DJ Basin under the ROFR to NBLX. Gunnison River Bronco IDP - DJ Water Services 5% 95% 4

Material Midstream Embedded Value 5 A growing portion of the NBL value opportunity NBLX and CONE With Access to Premier U.S. Unconventional Assets NBLX and CNNX yields in top quartile of MLP valuations NBL Maintains Ownership and Control of Critical Midstream Assets 55% of Noble Midstream Partners LP units 32% of CONE Midstream Partners LP units Attractive Future Drop Down Potential Substantial retained EBITDA in development companies NBLX ROFR on Eagle Ford assets and East Pony (DJ) gas processing MLP Ownership Provides Cash Cost Advantage Portion of midstream fees returns through LP ownership Additional Value Upside Potential Future distributions, retained sponsor EBITDA growth, GP and IDR value growth $MM 2,500 2,000 1,500 1,000 500 0 Over $2.5 Bn in Midstream Value Net to NBL Realized Cash* NBLX CNNX Combined Value Chart LP Units** Retained NBL EBITDA Value*** GP/IDR Value **** Total * IPO proceeds plus additional distributions made to NBL **Represents market value of LP units held by NBL as of 10/31/16 *** EBITDA of retained asset and development company interest. Applies potential future drop down multiple of 7.5x and 10x to next 12 month EBITDA. EBITDA is a Non-GAAP metric that cannot be easily reconciled to GAAP metric at this asset level ****NBL owns 100% of the GP/IDRs of NBLX (assumed value of $75 MM today). NBL owns 50% of the GP of CNNX (applies a 30X multiple to net annual incentive distributions)

Active Portfolio Management Generating substantial cash flows and strengthening the balance sheet 1.5 1.0 0.5 0.0 $2.5 Bn of Cumulative Asset Monetizations Over Last 4 Years CONE MLP, U.S. Onshore, China U.S. Onshore NBLX, EMed, U.S. Onshore 2013 2014 2015 2016 Onshore CONE MLP Int'l NBLX MLP Nearly $1.5 Bn of Divestment Proceeds Expected to be Received in 2016 Accelerated value of long-dated DJ inventory Established strong valuation marker for Tamar NBLX IPO Positioned for Additional Value-Creating Asset Monetization EMED farm-downs Midstream financing Ensuring Robust Liquidity and Supporting Balance Sheet Strength $5.8 B of liquidity end of 3Q16 Debt reduction and activity acceleration in 4Q16 Maintain Investment Grade Credit Rating 6

Marcellus Joint Venture Separation 7 WV Before PA Enhancing control over pace and scale of development NBL Operated CNX Operated NBL - 50% WI in 669,000 gross acres NBL - 535 MMcfe/d net production $1.6 B carry obligation and JV/JDA with CNX After WV PA NBL Acreage CNX Acreage NBL - 100% WI in 363,000 net acres NBL - 450 MMcfe/d net production Carry obligation removed, JV/JDA dissolved Maximizes Value and Flexibility For All Parties 100% working interest in retained acreage Maintain Premium Position in the Best U.S. Gas Basin 363,000 net acres Keep core areas in Majorsville, Moundsville and North Ninevah No Changes in CONE Ownership Structure All acreage remains dedicated to CONE No modifications to fee structure or long-term contracts

4Q16 Sales Volume Expectations and Guidance Production outperformance offsetting asset divestiture impacts 4Q16 Guidance MBoe/d 425 400 New 4Q 16 Volume Guidance Increasing Oil Percentage for 4Q DJ & GOM 400 410 Higher 400-410 Sales Volumes (MBoe/d) 400-410 Product Mix (Oil / NGL / Gas) 31% / 14% / 55% Organic Capital ($MM) 425-475* Equity Investment Income ($MM) 25-35 375 Combined 7 MBoe/d Divest Impact Lease Operating ($/Boe) 3.90-4.10 Transportation, Gathering ($/Boe) 2.90-3.10 DD&A ($/Boe) 16.00-16.50 350 Original 4Q Guide Marcellus JV Impact Eagle Ford Sale Tamar Sale Timing Performance Updated 4Q Improvement Guide Production Taxes (% Oil, Gas, NGL Revenues) Marketing and Processing ($MM) 3.5-4.0 25-30 Exploration ($MM) 50-65 G&A ($MM) 95-105 Interest, net ($MM) 75-85 8 * Includes NBLX capital of $20-25 million

Upcoming Investor Webcast Event What: Long-Term Outlook U.S. Onshore Overview When: Wednesday, November 16 at 9:00 a.m. CT Estimated to Last ~1.5 Hours Where: www.nobleenergyinc.com Investors page 9

Forward-looking Statements and Other Matters This presentation contains certain forward-looking statements within the meaning of the federal securities law. Words such as anticipates, believes, expects, intends, will, should, may, estimate, and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy s current views about future events. They may include estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this presentation will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks 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 actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy s business that are discussed in its most recent Form 10-K and in other reports on file with the Securities and Exchange Commission ( SEC ). These reports are also available from Noble Energy s offices or website, http://www.nobleenergyinc.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change. The SEC requires oil and gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The SEC permits the optional disclosure of probable and possible reserves, however, we have not disclosed our probable and possible reserves in our filings with the SEC. We use certain terms in this presentation, such as MBoe type curve, MMBoe type curve and type curve. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent Form 10-K and in other reports on file with the SEC, available from Noble Energy s offices or website, http://www.nobleenergyinc.com. 10

Investor Relations Contacts Brad Whitmarsh brad.whitmarsh@nblenergy.com Megan Repine megan.repine@nblenergy.com 281.943.1670 832.639.7380 Visit us at the Investor Relations Homepage on nobleenergyinc.com Energizing the World, Bettering People s Lives