Basis of Presentation

Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the US (US GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. The accompanying consolidated financial statements at March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013 contain all normally recurring adjustments considered necessary for a fair presentation of our financial position, results of operations, cash flows and shareholders’ equity for such periods. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Consolidation Our consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries. In addition, we use the equity method of accounting for investments in entities that we do not control but over which we exert significant influence. All significant intercompany balances and transactions have been eliminated upon consolidation.

Discontinued Operations In 2012, we initiated a strategy to exit the North Sea geographical area through sales of our non-operated working interests in the assets. The North Sea geographical segment was classified as held for sale and the operations were reflected as discontinued operations in 2012 and 2013.

The most significant North Sea assets were sold during 2012 and 2013. However, we have been unable to locate purchasers for the remaining assets, and a sale is no longer considered probable. Therefore, during first quarter 2014, we reclassified the remaining North Sea assets to held and used, and the North Sea geographical segment is included in continuing operations in first quarter 2014. In addition, we recorded an impairment in first quarter 2014.

North Sea revenues and operating expenses for first quarter 2014, except for the impairment, were de minimis. See Note 3. Divestitures, Note 4. Asset Impairments, and Note 7. Fair Value Measurements and Disclosures.

Common Stock Split On April 22, 2013, Noble Energy’s Board of Directors approved a 2-for-1 split of its common stock to be effected in the form of a stock dividend. The stock dividend was distributed on May 28, 2013 to shareholders of record as of May 14, 2013. Earnings per share and common shares outstanding are reported giving retrospective effect to the common stock split.

Recently Issued Accounting Standards In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-08: Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08). ASU 2014-08 changes the criteria for reporting discontinued operations while enhancing disclosures in this area and is effective for annual and interim periods beginning after December 15, 2014. We are currently evaluating the provisions of ASU 2014-08 and assessing the impact, if any, it may have on our financial position and results of operations.

Estimates The preparation of consolidated financial statements in conformity with US GAAP requires us to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment.

Statements of Operations Information Other statements of operations information is as follows:



	Three Months Ended March 31,
(millions)	2014		2013
Production Expense
Lease Operating Expense	$	145	$	117
Production and Ad Valorem Taxes	49		43
Transportation and Gathering Expense	38		27
Total	$	232	$	187
Other Operating (Income) Expense, Net
(Gain) Loss on Divestitures	$	1	$	(15	)
Other, Net	6		7
Total	$	7	$	(8	)
Other Non-Operating (Income) Expense, Net
Deferred Compensation Expense ⁽¹⁾	$	4	$	10
Other Expense, Net	1		—
Total	$	5	$	10


⁽¹⁾	Amounts represent increases in the fair value of shares of our common stock held in a rabbi trust.

Balance Sheet Information Other balance sheet information is as follows:



(millions)	March 31, 2014			December 31, 2013
Accounts Receivable, Net
Commodity Sales	$	403		$	495
Joint Interest Billings	364			382
Other	111			81
Allowance for Doubtful Accounts	(13		)	(11		)
Total	$	865		$	947
Other Current Assets
Inventories, Materials and Supplies	$	113		$	96
Inventories, Crude Oil	24			25
Deferred Income Taxes, Net	38			62
Assets Held for Sale ⁽¹⁾	294			292
Prepaid Expenses and Other Current Assets	76			72
Total	$	545		$	547
Other Noncurrent Assets
Equity Method Investments	$	464		$	437
Mutual Fund Investments	116			114
Commodity Derivative Assets	11			16
Other Assets	99			112
Total	$	690		$	679
Other Current Liabilities
Production and Ad Valorem Taxes	$	101		$	103
Commodity Derivative Liabilities	95			65
Income Taxes Payable	210			156
Asset Retirement Obligations	39			39
Interest Payable	61			63
Current Portion of Long Term Debt ⁽²⁾	200			200
Current Portion of Capital Lease Obligations and Other ⁽²⁾	55			58
Liabilities Associated with Assets Held for Sale ⁽¹⁾	58			111
Other	202			193
Total	$	1,021		$	988
Other Noncurrent Liabilities
Deferred Compensation Liabilities	$	263		$	253
Asset Retirement Obligations	616			547
Accrued Benefit Costs	107			155
Other	186			154
Total	$	1,172		$	1,109


⁽¹⁾	Assets held for sale as of March 31, 2014 include oil and gas properties located onshore US, offshore Israel, and offshore China. Assets held for sale as of December 31, 2013 include oil and gas properties located onshore US, offshore China, and the North Sea. Liabilities associated with assets held for sale primarily include asset retirement obligations. See Note 3. Divestitures.

⁽²⁾See Note 6. Debt.