-=Noble Energy (NBL) reported earnings on Tue 20 Feb 18 (b/o)

Noble Energy beats by $0.28, beats on revs; Increases proved reserves by 37%; Provides 2018 outlook and three year outlook 

• Reports Q4 (Dec) earnings of $0.32 per share, $0.28 better than the Capital IQ Consensus of $0.04; revenues rose 18.9% year/year to $1.2 bln vs the $1.18 bln Capital IQ Consensus.
  • Total Company sales volumes for the fourth quarter 2017 were 380 thousand barrels of oil equivalent per day (MBoe/d), an increase of 25 MBoe/d from the third quarter 2017 and up nearly 50 MBoe/d(1) from the fourth quarter of last year.

Proved Reserves

• NBL announced total proved reserves of 1.965 billion barrels of oil equivalent as of December 31, 2017, a net increase of 528 million barrels of oil equivalent (MMBoe) versus year-end 2016. Organic reserve additions, comprised of extensions, discoveries and performance and price revisions, totaled 871 MMBoe and were added at a cost of approximately $2.90 per barrel of oil equivalent (BOE). These additions represent approximately 6.3 times 2017 production. The value of future after-tax net cash flows from the Company's proved reserves, according to U.S. Securities and Exchange Commission price guidelines and discounted at 10 percent, increased to more than $11 billion, up nearly 100 percent from 2016.

2018 Guidance

• Capital expenditures are expected to total between $2.7 and $2.9 billion, with nearly 70 percent allocated to the U.S. onshore program and over 25 percent to the Eastern Mediterranean.
• Full-year sales volumes, at the midpoint of the Company's expected range, are approximately 12 percent higher than 2017.
• U.S. onshore volumes are expected to increase more than 20 percent and U.S. onshore oil volumes are anticipated to be up nearly 30 percent with upstream capital investments essentially flat to 2017 levels.

Outlook through 2020

• Expects to generate a cumulative total of $1.5 billion of excess cash flows through 2020 in the $50 scenario, and an additional $1.5 billion at strip pricing.
• Board-authorized $750 million share repurchase program and current dividend payout will result in more than $1.3 billion in direct shareholder return over the plan period.
• Capital expenditures are estimated to be approximately $2.8 billion annually through 2020 in both pricing scenarios, with no changes in activity levels assumed.
• Estimated cash flow from operations is anticipated to grow at a 35 percent compound annual growth rate in the $50 scenario and 40 percent at strip pricing as compared to 2017.
• Estimated volumes are anticipated to grow to approximately 525 thousand barrels of oil equivalent per day (MBoe/d) in 2020, a 20 percent compound annual growth rate from 2017.
• Leverage (net debt to EBITDA) is anticipated to be reduced below 1.5 times in 2020 in the $50 scenario, or in 2019 in the strip pricing scenario.