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Noble's Production Rises 28% with Patina Acquisition

With higher prices and daily production up 28%, Houston-based independent Noble Energy Inc.'s second quarter income rose 90% from a year ago to the highest level in its history, $136.9 million ($1.87/share) compared with $72 million ($1.24) in 2Q2004. Cash flow grew 49% to $329.9 million compared with $221.4 million.

Part of the growth in daily production was attributed to Noble's acquisition of Denver-based Patina Oil & Gas last year (see Daily GPI, Dec. 17, 2004). In the first half of this year, Noble's worldwide gas production averaged 417 MMcf/d while in North America gas production averaged 269 MMcf/d.

"Our strong second quarter results reflect the integration of Patina Oil & Gas with Noble Energy's operations, effective May 16," said CEO Charles D. Davidson. "The large inventory of high-return, low-risk exploitation opportunities associated with the Patina properties significantly enhances our domestic production base."

Quarterly production was 139,765 boe/d, which included 27,344 boe/d from Patina assets. The second quarter results included 45 days of Patina's results. However, excluding Patina, Noble's production still was up 3% over the same period of 2004, with domestic production up 21%. Excluding Patina, production increased 3% over the same period last year and 7% compared to the first quarter of 2005. Domestic production increased 21% compared to the second quarter last year.

Noble's U.S. output, excluding Patina, decreased primarily because of natural decline in properties on the Gulf of Mexico (GOM) Shelf, including an anticipated decline at Roaring Fork (South Timbalier 315/316) and the shut-in of production at Main Pass 293/305/306 in the GOM resulting from Hurricane Ivan damage in 3Q2004.

North American operations reported operating income for the second quarter of $139.4 million, an increase of 104% compared to $68.3 million for the second quarter last year. Quarterly North American production volumes increased to 79,218 boe/d from 65,530 boe/d in 2Q2004.

When Patina's acquisition was completed in May, Noble's North American operations were divided into three regions: the Rocky Mountains, Midcontinent and Southern regions. The Rocky Mountain region includes the DJ (Wattenberg), San Juan, Wind River, and Piceance basins, as well as the Niobrara, Bowdoin and Siberia Ridge fields. The Midcontinent region includes Illinois, Kansas, Oklahoma and the Texas Panhandle. The Southern region includes the Gulf Coast onshore, West and East Texas, North Louisiana and the Gulf of Mexico.

Average boe production in 2005, including Patina, is expected to increase nearly 42%, compared with full-year 2004, with average production of 150,000 boe/d.

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