EX-99.2 4 h12337exv99w2.txt PRESS RELEASE DATED FEBRUARY 3, 2004 EXHIBIT 99.2 (NOBLE ENERGY LOGO) NEWS RELEASE 100 GLENBOROUGH DRIVE CONTACT: Greg Panagos: 281-872-3125 SUITE 100 Investor_Relations@nobleenergyinc.com HOUSTON, TX 77067 NOBLE ENERGY ANNOUNCES FULL YEAR AND FOURTH QUARTER 2003 RESULTS Cash Flow Reached Record High of $639 Million For 2003 HOUSTON (February 3, 2004) -- Noble Energy, Inc. (NYSE: NBL) today reported full year and fourth quarter 2003 results. For the full year 2003, net income was $78.0 million, or $1.37 per share. Discretionary cash flow (see Determination of Discretionary Cash Flow and Reconciliation schedule) for the year was a record $638.9 million. For the fourth quarter 2003, the company reported a net loss of $21.1 million, or 37 cents per share, and discretionary cash flow was $171.5 million. Full year and fourth quarter 2003 income from continuing operations included a pretax, non-cash charge for asset impairments of $31.9 million ($20.8 million after tax), primarily related to a reserve revision on the East Cameron 338 field in the Gulf of Mexico after recompletion and remediation activities produced less-than-expected results. An analysis of the performance response of the field resulted in a reduction in proved reserves of 2.2 million barrels of oil equivalent. The impairment should result in substantially lower depletion costs in 2004. As previously announced on December 17, 2003, full year and fourth quarter continuing operations also included a pretax, non-cash exploration charge of $20.2 million ($5.9 million after tax) to write off the company's investment in Vietnam. Noble Energy realized a $14.3 million current tax benefit as a result of the Vietnam write-off. Discontinued operations reported a net loss of $20.9 million for the quarter, or 37 cents per share. Net income from discontinued operations included a pretax, non-cash charge of $45.8 million ($29.8 million after tax) for losses on the disposition of assets and to write down assets held for sale to their estimated fair value, which were also announced on December 17, 2003. For the year, discontinued operations reported a loss of $6.1 million, or 11 cents per share, including a pretax, non-cash charge of $59.2 million ($38.5 million after tax) for losses on the disposition of assets and to write down assets held for sale to their estimated fair value. Excluding the effects of special charges, which include the asset impairments, the Vietnam write-off, the loss on asset sales and the write down of assets held for sale, Noble Energy's net income for the fourth quarter 2003 would have been $35.4 million, or 62 cents per share. Adding back these special charges and the cumulative effect of change in accounting principle ($5.8 million after tax) to full year 2003 results, net income would have been $149.0 million, or $2.62 per share. (See Determination of Non-GAAP Measures, Table 1.) Charles Davidson, Noble Energy's Chairman, President and CEO, said, "This past year was strong with record cash flow, and we made substantial progress in 2003 toward completing the transformation of our company. Our international business is now poised to contribute significantly for years to come. Our projects in China, Ecuador and Israel are now complete. In Equatorial Guinea, Phase 2A production is ramping up and Phase 2B is scheduled for completion by year-end, so our international capital commitments are declining rapidly while free cash flow will be increasing. Our domestic operations have fully implemented disciplined business processes that have stabilized production. As a result, Noble Energy has the financial and operational flexibility to take advantage of new opportunities to create value." FULL YEAR 2003 Excluding special charges and the cumulative effect of change in accounting principle, full year 2003 net income was $149.0 million, or $2.62 per share, compared to net income of $17.7 million, or 31 cents per share, for the same period last year. Discretionary cash flow for 2003 was $638.9 million compared to last year's $476.8 million. The year-on-year increase in net income and discretionary cash flow resulted primarily from higher production volumes and realized commodity prices. The increase in realized prices that had the greatest impact on earnings and cash flow was in natural gas, which increased 43 percent year-on-year to $4.13 per thousand cubic feet (Mcf) from $2.89 per Mcf last year. The company's average realized liquids price increased 14 percent to $27.72 per barrel (Bbl) compared to $24.22 per Bbl last year. Compared to 2002, realized methanol and power prices increased by 51 percent and 13 percent, respectively. Reported production from continuing operations for the year increased seven percent to 92,116 barrels of oil equivalent per day (Boepd) from 85,949 Boepd. International volumes increased 6,650 Boepd, or 26 percent, compared to last year, primarily because of increased production in Equatorial Guinea and a full year of operations at Noble Energy's power plant in Ecuador. Domestic volumes were virtually unchanged compared to last year. Excluding the impact of property sales and discontinued operations, overall production increased four percent compared to the prior year. Exploration expense totaled $148.8 million, including the non-cash charge to write off the company's investment in Vietnam. Excluding the Vietnam write-off, exploration expense declined 15 percent compared to $150.7 million last year. (See Determination of Non-GAAP measures, Table 5.) Selling, general and administrative expense for the year was $52.5 million compared to $47.7 million in 2002. The ten percent increase in selling, general and administrative expense primarily reflects increased corporate governance costs, professional fees and other costs related to Sarbanes-Oxley compliance, along with increased salary and legal costs. Oil and gas operating expense for 2003 was $145.8 million compared to $105.4 million last year. The increase in oil and gas operating expense was due to several factors, including new operations in China, increased production and the start-up of Phase 2A in Equatorial Guinea, new production in the Gulf of Mexico and higher production taxes. Including discontinued operations, oil and gas operating expense increased 30 percent compared to 2002. Depreciation, depletion and amortization for 2003 totaled $288.7 million compared to $236.9 million last year. The increase was primarily due to higher domestic depreciation, depletion and amortization rates. Including discontinued operations, depreciation, depletion and amortization increased 11 percent over last year. FOURTH QUARTER 2003 Fourth quarter 2003 net income excluding special charges was $35.4 million, or 62 cents per share, double fourth quarter 2002 net income of $16.8 million, or 29 cents per share. Discretionary cash flow for the fourth quarter 2003 was $171.5 million compared to $149.3 million last year. Noble Energy benefited from higher realized prices for liquids and natural gas during the quarter, which increased ten percent and 12 percent, respectively, compared to the fourth quarter of 2002. The company's average realized liquids price was $28.22 per Bbl compared to $25.77 per Bbl during the fourth quarter of 2002. The company's average realized natural gas price was $3.96 per Mcf compared to $3.55 per Mcf last year. Higher realized methanol and power prices also contributed to improved operating results compared to the fourth quarter 2002, increasing seven percent and nine percent, respectively. Reported fourth quarter 2003 production, net of adjustments for discontinued operations, increased over six percent to 95,070 Boepd compared to third quarter 2003 production of 89,287 Boepd. Reported domestic production increased due to the start-up of new production in the deepwater Gulf of Mexico. 2 International volumes increased because of increased production in Equatorial Guinea, the North Sea and Ecuador. Reported fourth quarter 2003 production volumes increased 11 percent from 85,608 Boepd for the same period last year. The increase in volumes was primarily attributable to the start-up of new projects in the deepwater Gulf of Mexico and operations in China. DOMESTIC OPERATIONS - FOURTH QUARTER 2003 Domestic operations reported a pretax operating loss for the fourth quarter of $41.7 million compared to operating income of $31.6 million for the fourth quarter last year. Excluding non-cash charges for asset impairments, losses on asset sale and the write down to market value, fourth quarter 2003 domestic operating income would have been $36.1 million. (See Determination of Non-GAAP Measures, Table 2.) Domestic operations benefited from higher realized prices for liquids and natural gas during the quarter, which increased 11 percent and eight percent, respectively, compared to the fourth quarter of 2002. The average domestic realized liquids price was $27.08 per Bbl compared to $24.45 per Bbl during the fourth quarter of 2002. The average domestic realized natural gas price was $4.44 per Mcf compared to $4.12 per Mcf last year. During 2003, Noble Energy participated in 100 gross domestic exploration and development wells, of which 64 were successful. INTERNATIONAL OPERATIONS - FOURTH QUARTER 2003 International operations reported operating income for the fourth quarter of $26.1 million compared to $23.6 million in the fourth quarter last year. Fourth quarter 2003 results reflected a 15 percent year-on-year increase in production volumes, higher realized commodity prices and operating income from China, partially offset by the pretax, non-cash charge to write off the company's investment in Vietnam. Excluding the Vietnam write-off, fourth quarter 2003 international operating income would have increased 96 percent to $46.3 million. (See Determination of Non-GAAP Measures, Table 3.) International operations benefited from higher realized prices for liquids and natural gas during the quarter, which increased nine percent and 31 percent, respectively, compared to the fourth quarter of 2002. The average international realized liquids price was $29.24 per Bbl compared to $26.81 per Bbl during the fourth quarter of 2002. The average international realized natural gas price was $1.51 per Mcf compared to $1.15 per Mcf during the fourth quarter of 2002. During 2003, Noble Energy participated in 64 gross international exploration and development wells, of which 58 were successful. Equatorial Guinea Total operating income in Equatorial Guinea, which includes results from field operations and methanol, for the fourth quarter of 2003 increased 36 percent to $22.5 million compared to $16.5 million last year. Liquid petroleum gas (LPG), natural gas and condensate sales accounted for $15.0 million, or 67 percent, of operating income from Equatorial Guinea. Fourth quarter 2003 production volumes averaged 13,266 Boepd compared to 12,946 Boepd last year. The increase in production was due to the start-up of the Phase 2A expansion project, which began producing in November 2003. The average realized price for liquids during the fourth quarter was $29.00 per Bbl compared to $25.63 per 3 Bbl for the same period last year. Natural gas was sold to the Atlantic Methanol Production Company (AMPCO) at a price of 25 cents per Mcf. AMPCO, an unconsolidated subsidiary in which the company owns a 45 percent interest, produced $7.4 million of operating income, net to Noble Energy's interest, during the fourth quarter 2003. AMPCO results are reported as income from unconsolidated subsidiaries. Fourth quarter realized methanol prices were 60 cents per gallon (Gal) compared to 56 cents per Gal last year. The company's share of AMPCO methanol sales volumes was 29.3 million Gal, flat with last year's 29.0 million Gal. North Sea In the North Sea, operating income for the fourth quarter of 2003 increased 67 percent to $15.6 million from $9.3 million last year. The quarter-on-quarter improvement reflects higher crude oil and natural gas prices and lower overall operating costs. Other International Other international, which includes operating results from Argentina, China, Ecuador, Israel and Vietnam, recorded a fourth quarter 2003 operating loss of $12.0 million compared to an operating loss of $2.2 million for fourth quarter last year. The larger operating loss resulted from the write-off of Noble Energy's investment in Vietnam, partially offset by operations in Ecuador and China. Other international operating income for the fourth quarter 2003, excluding the Vietnam write-off, would have been $8.3 million. (See Determination of Non-GAAP Measures, Table 4.) Noble Energy's Machala power plant contributed $2.3 million of operating income during the fourth quarter 2003 compared to $1.5 million for the same period last year. For the quarter, 232,348 megawatts (MW) were produced at an average sales price of 7.2 cents per kilowatt hour (Kwh). For the fourth quarter 2003, Noble Energy produced 26.3 million cubic feet per day of natural gas from the Amistad field at an average price of $3.49 per Mcf. In south Bohai Bay offshore China, production commenced from the Cheng Dao Xi (CDX) field in January 2003. Fourth quarter operating income was $4.0 million. Production averaged 3,158 barrels of oil per day for the fourth quarter. Noble energy has a 57 percent working interest in CDX. Noble Energy is one of the nation's leading independent energy companies and operates throughout major basins in the United States including the Gulf of Mexico, as well as internationally, in Argentina, China, Ecuador, Equatorial Guinea, the Mediterranean Sea and the North Sea. Noble Energy markets natural gas and crude oil through its subsidiary, Noble Energy Marketing, Inc. This news release 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. Important factors that could cause the actual results to differ materially from those projected include, without limitation, the volatility in commodity prices for oil and 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. -xxx- PR 255 02/03/04 4 NOBLE ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED SUMMARY OF RESULTS (Unaudited) (In thousands, except per share)
Three Months Ended Twelve Months Ended ------------------------ ------------------------ 12/31/2003 12/31/2002 12/31/2003 12/31/2002 ---------- ---------- ---------- ---------- REVENUES Oil and Gas Sales and Royalties $ 214,869 $ 171,420 $ 839,144 $ 609,026 Gathering, Marketing and Processing 13,501 16,920 68,158 64,517 Electricity Sales 16,661 14,326 58,022 18,257 Income From Unconsol. Subs 7,436 8,254 40,626 9,532 Other Income (Loss) (8,026) 274 (15,573) 1,246 ---------- ---------- ---------- ---------- 244,441 211,194 990,377 702,578 ---------- ---------- ---------- ---------- COST AND EXPENSES Oil and Gas Operations 36,465 26,875 145,836 105,358 Transportation 4,109 3,214 14,679 16,441 Oil and Gas Exploration 53,259 43,435 148,818 150,701 Gathering, Marketing and Processing 10,424 13,831 59,114 53,982 Electricity Generation 14,407 12,829 50,846 15,946 Depreciation, Depletion and Amortization 74,401 56,561 288,734 236,881 Impairment of Operating Assets 31,937 31,937 Selling, General and Administrative 11,397 9,423 52,466 47,664 Accretion of Asset Retirement Obligation 2,316 9,331 Interest Expense 14,748 16,948 61,111 64,040 Interest Capitalized (4,556) (2,599) (14,134) (16,331) ---------- ---------- ---------- ---------- 248,907 180,517 848,738 674,682 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES (4,466) 30,677 141,639 27,896 INCOME TAX PROVISION (BENEFIT) Current (3,098) 3,876 42,975 2,479 Deferred (1,172) 14,539 8,772 17,322 ---------- ---------- ---------- ---------- (4,270) 18,415 51,747 19,801 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (196) 12,262 89,892 8,095 DISCONTINUED OPERATIONS (NET OF TAX) (20,854) 4,559 (6,061) 9,557 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX (5,839) ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ (21,050) $ 16,821 $ 77,992 $ 17,652 ========== ========== ========== ========== INCOME (LOSS) PER SHARE BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE $ 0.00 $ 0.21 $ 1.58 $ 0.14 INCOME (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS $ (0.37) $ 0.08 $ (0.11) $ 0.17 LOSS PER SHARE FROM CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE $ (0.10) ---------- ---------- ---------- ---------- NET INCOME (LOSS) PER SHARE $ (0.37) $ 0.29 $ 1.37 $ 0.31 ========== ========== ========== ========== AVERAGE SHARES OUTSTANDING 56,816 57,306 56,964 57,196
NOBLE ENERGY, INC. AND SUBSIDIARIES DETERMINATION OF DISCRETIONARY CASH FLOW AND RECONCILIATION (Unaudited) (In thousands)
Three Months Ended Twelve Months Ended -------------------------- -------------------------- 12/31/2003 12/31/2002 12/31/2003 12/31/2002 ---------- ---------- ---------- ---------- Net Income (Loss) $ (21,050) $ 16,821 $ 77,992 $ 17,652 Depreciation, Depletion and Amortization (DD&A) 74,401 56,561 288,734 236,881 Power Project DD&A 7,937 6,892 27,116 8,459 Oil and Gas Exploration 53,259 43,435 148,818 150,701 Interest Capitalized (4,556) (2,599) (14,134) (16,331) Undistributed Earnings From Unconsol. Subs (7,436) (8,254) (40,626) (9,532) Distribution From Unconsol. Subs 8,550 12,334 46,125 23,196 DD&A - Discontinued Operations 1 9,537 28,762 48,405 Non-cash Loss on Asset Disposition 45,835 59,171 Impairment of Operating Assets 31,937 31,937 Change in Accounting Principle, net of tax 5,839 Allowance for Doubtful Accounts (250) 4,686 Deferred Income Tax Provision (Benefit) (19,414)[1] 14,539 (34,855)[2] 17,322 Accretion of Asset Retirement Obligation 2,316 9,331 ---------- ---------- ---------- ---------- DISCRETIONARY CASH FLOW [3] $ 171,530 $ 149,266 $ 638,896 $ 476,753 Adjustments to Reconcile: Working Capital $ (25,637) $ 59,695 $ (26,135) $ 58,863 Cash Exploration Costs (20,697) (18,421) (51,801) (48,051) Capitalized Interest 4,556 2,599 14,134 16,331 Return of Capital - Unconsolidated Subs (5,500) Deferred Tax, Misc. Credits and Other (21,572) 6,009 2,893 5,895 ---------- ---------- ---------- ---------- Net Cash Provided by Operating Activities $ 108,180 $ 199,148 $ 577,987 $ 504,291 ========== ========== ========== ==========
[1] Includes deferred income tax benefit from continuing operations of $1.2 million and discontinued operations of $18.2 million. [2] Includes deferred income tax provision from continuing operations of $8.8 million, and deferred income tax benefit from discontinued operations and the cumulative effect of change in accounting principle of $40.5 million and $3.2 million, respectively. [3] The table above reconciles discretionary cash flow to net cash provided by operating activities. While discretionary cash flow is not a GAAP measure of financial performance, management believes it is a good tool for internal use and the investment community in evaluating the company's overall financial performance. Among management, professional research analysts, portfolio managers and investors following the oil and gas industry, discretionary cash flow is broadly used as an indicator of a company's ability to fund exploration and production activities and meet financial obligations. Discretionary cash flow is also commonly used as a basis to value and compare companies in the oil and gas industry. -------------------------------------------------------------------------------- CONSOLIDATED CONDENSED BALANCE SHEET (Unaudited) (In thousands)
------------ ------------ 12/31/2003 12/31/2002 ------------ ------------ ASSETS Current Assets $ 537,597 $ 310,374 ------------ ------------ Property, Plant and Equipment 3,924,987 4,334,015 Less: Accumulated Depreciation (1,825,246) (2,194,230) ------------ ------------ 2,099,741 2,139,785 Investment In Unconsol. Subs 227,669 234,668 Other 34,517 45,188 ------------ ------------ $ 2,899,524 $ 2,730,015 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities $ 711,667 $ 471,754 Long-term Debt 776,021 977,116 Deferred Income Taxes, Other Deferred Credits and Noncurrent Liabilities 337,227 271,759 Shareholders' Equity 1,074,609 1,009,386 ------------ ------------ $ 2,899,524 $ 2,730,015 ============ ============
NOBLE ENERGY, INC. INCOME BEFORE INCOME TAXES (Unaudited) (Dollars in thousands) -------------------------------------------------------------------------------- THREE MONTHS ENDED 12/31/03
EQUATORIAL OTHER CORPORATE CONSOLIDATED DOMESTIC NORTH SEA GUINEA INTERNATIONAL [1] AND OTHER [2] ------------ ----------- ----------- ----------- ----------------- ------------- REVENUES Oil Sales $ 105,311 $ 47,743 $ 21,625 $ 20,172 $ 15,771 Gas Sales [3] 109,558 102,759 5,981 787 31 Gathering, Marketing and Processing Revenue 13,501 13,501 Electricity Sales 16,661 16,661 Income from Unconsolidated Subsidiaries 7,436 7,436 Other (8,026) (8,554) 1,399 293 (1,164) ----------- ----------- ----------- ----------- ----------- ----------- Total Revenues 244,441 141,948 29,005 28,395 32,756 12,337 COSTS AND EXPENSES Oil and Gas Operations 36,465 24,214 2,532 4,354 4,308 1,057 Transportation 4,109 2,604 1,505 Oil and Gas Exploration 53,259 30,191 2,287 83 20,282 416 Gathering, Marketing and Processing Expense 10,424 10,424 Electricity Generation 14,407 14,407 DD&A 74,401 61,753 5,991 1,223 4,456 978 Impairment of Operating Assets 31,937 31,937 SG&A 11,397 3,425 264 (251) 7,959 Interest Expense (net) 12,508 12,508 ----------- ----------- ----------- ----------- ----------- ----------- Total Costs and Expenses 248,907 151,520 13,414 5,924 44,707 33,342 OPERATING INCOME (LOSS) $ (4,466) $ (9,572) $ 15,591 $ 22,471 $ (11,951) $ (21,005) Discontinued Operations (32,083) (32,083) ----------- ----------- ----------- ----------- ----------- ----------- OPERATING INCOME AFTER DISCONTINUED OPERATIONS $ (36,549) $ (41,655) $ 15,591 $ 22,471 $ (11,951) $ (21,005) =========== =========== =========== =========== =========== =========== KEY STATISTICS DAILY PRODUCTION Liquids (Bbl) 40,567 19,167 7,928 7,560 5,912 Natural Gas (Mcf) 327,015 251,602 13,992 34,236 27,185 AVERAGE REALIZED PRICE Liquids $ 28.22 $ 27.08 $ 29.65 $ 29.00 $ 29.00 Natural Gas $ 3.96 $ 4.44 $ 4.65 $ 0.25 $ 0.39
-------------------------------------------------------------------------------- THREE MONTHS ENDED 12/31/02
EQUATORIAL OTHER CORPORATE CONSOLIDATED DOMESTIC NORTH SEA GUINEA INTERNATIONAL [1] AND OTHER [2] ------------ ----------- ----------- ----------- ----------------- ------------- REVENUES Oil Sales $ 66,420 $ 27,582 $ 19,532 $ 14,291 $ 4,954 $ 61 Gas Sales 105,000 99,721 5,244 908 35 (908) Gathering, Marketing and Processing Revenue 16,920 16,920 Electricity Sales 14,326 14,326 Income from Unconsolidated Subsidiaries 8,254 8,254 Other 274 511 565 (1,055) 253 ----------- ----------- ----------- ----------- ----------- ----------- Total Revenues 211,194 127,814 25,341 23,453 18,260 16,326 COSTS AND EXPENSES Oil and Gas Operations 26,875 19,167 3,117 2,876 1,168 547 Transportation 3,214 2,452 762 Oil and Gas Exploration 43,435 36,755 1,742 1,339 3,673 (74) Gathering, Marketing and Processing Expense 13,831 13,831 Electricity Generation 12,829 12,829 DD&A 56,561 44,149 8,452 1,997 1,609 354 SG&A 9,423 3,191 253 752 410 4,817 Interest Expense (net) 14,349 14,349 ----------- ----------- ----------- ----------- ----------- ----------- Total Costs and Expenses 180,517 103,262 16,016 6,964 20,451 33,824 OPERATING INCOME (LOSS) $ 30,677 $ 24,552 $ 9,325 $ 16,489 $ (2,191) $ (17,498) Discontinued Operations 7,014 7,014 ----------- ----------- ----------- ----------- ----------- ----------- OPERATING INCOME AFTER DISCONTINUED OPERATIONS $ 37,691 $ 31,566 $ 9,325 $ 16,489 $ (2,191) $ (17,498) =========== =========== =========== =========== =========== =========== KEY STATISTICS DAILY PRODUCTION Liquids (Bbl) 27,984 12,262 7,567 6,060 2,095 Natural Gas (Mcf) 345,746 262,956 16,096 41,314 25,380 [3] AVERAGE REALIZED PRICE Liquids $ 25.77 $ 24.45 $ 28.06 $ 25.63 $ 25.70 Natural Gas $ 3.55 $ 4.12 $ 3.54 $ 0.24 $ 0.31
NOBLE ENERGY, INC. INCOME BEFORE INCOME TAXES (Unaudited) (Dollars in thousands) -------------------------------------------------------------------------------- TWELVE MONTHS ENDED 12/31/03
EQUATORIAL OTHER CORPORATE CONSOLIDATED DOMESTIC NORTH SEA GUINEA INTERNATIONAL[1] AND OTHER[2] ------------ --------- --------- ---------- ---------------- ------------ REVENUES Oil Sales $ 364,382 $ 153,891 $ 81,019 $ 65,016 $ 64,456 Gas Sales[3] 474,762 451,476 19,539 3,628 119 Gathering, Marketing and Processing Revenue 68,158 68,158 Electricity Sales 58,022 58,022 Income from Unconsolidated Subsidiaries 40,626 40,626 Other (15,573) (19,690) 1,105 (689) 3,701 --------- --------- --------- --------- --------- --------- Total Revenues 990,377 585,677 101,663 109,270 121,908 71,859 COSTS AND EXPENSES Oil and Gas Operations 145,836 96,260 10,662 16,319 18,630 3,965 Transportation 14,679 9,024 5,655 Oil and Gas Exploration 148,818 94,691 10,503 134 41,699 1,791 Gathering, Marketing and Processing Expense 59,114 59,114 Electricity Generation 50,846 50,846 DD&A 288,734 233,432 28,219 6,115 18,244 2,724 Impairment of Operating Assets 31,937 31,937 SG&A 52,466 15,884 603 1,872 34,107 Interest Expense (net) 56,308 56,308 --------- --------- --------- --------- --------- --------- Total Costs and Expenses 848,738 472,204 58,408 23,171 136,946 158,009 OPERATING INCOME (LOSS) $ 141,639 $ 113,473 $ 43,255 $ 86,099 $ (15,038) $ (86,150) Discontinued Operations (9,325) (9,325) Cumulative Effect of SFAS 143 (8,983) (8,983) --------- --------- --------- --------- --------- --------- OPERATING INCOME AFTER DISCONTINUED OPERATIONS AND CUMULATIVE EFFECT $ 123,331 $ 95,165 $ 43,255 $ 86,099 $ (15,038) $ (86,150) ========= ========= ========= ========= ========= ========= KEY STATISTICS DAILY PRODUCTION Liquids (Bbl) 36,014 16,084 7,412 6,377 6,141 Natural Gas (Mcf) 336,611 260,560 13,861 39,906 22,284 AVERAGE REALIZED PRICE Liquids $ 27.72 $ 26.21 $ 29.95 $ 27.93 $ 28.75 Natural Gas $ 4.13 $ 4.75 $ 3.86 $ 0.25 $ 0.41
-------------------------------------------------------------------------------- TWELVE MONTHS ENDED 12/31/02
EQUATORIAL OTHER CORPORATE CONSOLIDATED DOMESTIC NORTH SEA GUINEA INTERNATIONAL[1] AND OTHER[2] ------------ --------- --------- ---------- ---------------- ------------ REVENUES Oil Sales $ 257,435 $ 112,010 $ 72,041 $ 45,830 $ 27,377 $ 177 Gas Sales 351,591 331,935 19,497 3,052 160 (3,053) Gathering, Marketing and Processing Revenue 64,517 64,517 Electricity Sales 18,257 18,257 Income from Unconsolidated Subsidiaries 9,532 9,532 Other 1,246 100 389 (1,254) 2,011 --------- --------- --------- --------- --------- --------- Total Revenues 702,578 444,045 91,927 58,414 44,540 63,652 COSTS AND EXPENSES Oil and Gas Operations 105,358 82,381 10,812 9,848 5,191 (2,874) Transportation 16,441 9,618 6,823 Oil and Gas Exploration 150,701 120,695 5,210 1,341 23,454 1 Gathering, Marketing and Processing Expense 53,982 53,982 Electricity Generation 15,946 15,946 DD&A 236,881 192,708 28,279 5,849 8,962 1,083 SG&A 47,664 27,768 630 2,045 1,100 16,121 Interest Expense (net) 47,709 47,709 --------- --------- --------- --------- --------- --------- Total Costs and Expenses 674,682 423,552 54,549 19,083 61,476 116,022 OPERATING INCOME (LOSS) $ 27,896 $ 20,493 $ 37,378 $ 39,331 $ (16,936) $ (52,370) Discontinued Operations 14,703 14,703 --------- --------- --------- --------- --------- --------- OPERATING INCOME AFTER DISCONTINUED OPERATIONS $ 42,599 $ 35,196 $ 37,378 $ 39,331 $ (16,936) $ (52,370) ========= ========= ========= ========= ========= ========= KEY STATISTICS DAILY PRODUCTION Liquids (Bbl) 29,114 13,187 7,847 5,259 2,821 Natural Gas (Mcf) 341,008 280,836 16,991 34,382 8,799 [3] AVERAGE REALIZED PRICE Liquids $ 24.22 $ 23.29 $ 25.15 $ 23.88 $ 26.58 Natural Gas $ 2.89 $ 3.24 $ 3.14 $ 0.25 $ 0.38
AMPCO METHANOL OPERATIONS (Unaudited) (Dollars in thousands)
Three Months Ended Twelve Months Ended ------------------------ ------------------------ 12/31/2003 12/31/2002 12/31/2003 12/31/2002 ---------- ---------- ---------- ---------- REVENUES Methanol Sales $ 17,601 $ 16,304 $ 79,670 $ 45,604 Sales of Purchased Methanol -- 391 3,825 5,122 Other 2,443 1,555 8,564 3,589 --------- --------- --------- --------- Total Revenues 20,044 18,250 92,059 54,315 COSTS AND EXPENSES Cost of Goods Manufactured 9,729 6,814 35,755 26,457 Cost of Purchased Methanol -- 334 4,157 6,891 DD&A 2,330 2,357 9,420 9,707 SG&A 549 491 2,101 1,728 --------- --------- --------- --------- Total Costs and Expenses 12,608 9,996 51,433 44,783 INCOME/(LOSS) FROM UNCONS. SUBS $ 7,436 $ 8,254 $ 40,626 $ 9,532 ========= ========= ========= ========= Methanol Sales (MGal) 29,269 28,970 122,015 105,126 Average Realized Price ($/Gal) $ 0.60 $ 0.56 $ 0.65 $ 0.43
================================================================================ ECUADOR POWER OPERATIONS (Unaudited) (Dollars in thousands)
Three Months Ended Twelve Months Ended ------------------------ ------------------------ 12/31/2003 12/31/2002 12/31/2003 12/31/2002 ---------- ---------- ---------- ---------- REVENUES Power Sales $ 14,579 $ 12,166 $ 50,378 $ 16,097 Capacity Charge 2,082 2,160 7,644 2,160 --------- --------- --------- --------- Total Revenues 16,661 14,326 58,022 18,257 COSTS AND EXPENSES Field Lease Operating 743 967 2,903 1,451 DD&A 6,882 6,203 23,200 7,307 SG&A 722 480 2,859 998 Plant Fuel 4,012 3,699 14,367 4,085 Non-Fuel 993 791 3,600 953 Depreciation 1,055 689 3,917 1,152 --------- --------- --------- --------- Total Costs and Expenses 14,407 12,829 50,846 15,946 --------- --------- --------- --------- OPERATING INCOME (LOSS) $ 2,254 $ 1,497 $ 7,176 $ 2,311 ========= ========= ========= ========= Natural Gas Production (Mcfpd) [3] 26,317 24,133 21,485 7,638 Average Natural Gas Price $ 3.49 $ 3.08 $ 3.86 $ 3.15 Power Production - Total MW 232,348 217,037 751,689 269,229 Average Power Price ($/Kwh) $ 0.072 $ 0.066 $ 0.077 $ 0.068
-------------------------------------------------------------------------------- [1] Other international includes operations in Argentina, China, Ecuador, Israel and Vietnam. [2] Corporate and Other includes corporate overhead, intercompany eliminations and marketing. [3] Ecuador natural gas volumes are included in Other International and Consolidated production, but are not included in natural gas sales revenue for either. Because the gas-to-power project in Ecuador is 100 percent owned by Noble Energy, intercompany natural gas sales are eliminated for accounting purposes. NOBLE ENERGY, INC. AND SUBSIDIARIES DISCONTINUED OPERATIONS SUMMARY (Unaudited) (In thousands, except per share)
Three Months Ended Year to Date ---------------------------------------------------------- 12/31/2003 12/31/2003 9/30/2003 6/30/2003 3/31/2003 ---------- ---------- ---------- ---------- ---------- REVENUES Oil and Gas Sales and Royalties $ 106,339 $ 20,036 $ 26,667 $ 26,716 $ 32,920 COST AND EXPENSES Write down to Market Value & Net Realized Loss 59,171 45,835 8,422 4,914 Oil and Gas Operations 27,731 6,283 5,005 8,119 8,324 Depreciation, Depletion and Amortization 28,762 1 7,780 8,668 12,313 ---------- ---------- ---------- ---------- ---------- 115,664 52,119 21,207 21,701 20,637 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES (9,325) (32,083) 5,460 5,015 12,283 INCOME TAX PROVISION (BENEFIT) Current 37,219 7,013 24,152 1,755 4,299 Deferred (40,482) (18,242) (22,241) ---------- ---------- ---------- ---------- ---------- (3,264) (11,229) 1,911 1,755 4,299 ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ (6,061) $ (20,854) $ 3,549 $ 3,260 $ 7,984 ========== ========== ========== ========== ========== KEY STATISTICS: Daily Production Liquids (Bbl) 4,106 2,772 4,091 4,724 4,859 Natural Gas (Mcf) 32,823 30,757 34,396 32,834 33,318 Average Realized Price Liquids ($/Bbl) $ 27.71 $ 27.89 $ 28.11 $ 25.39 $ 29.56 Natural Gas ($/Mcf) $ 5.41 $ 4.57 $ 5.08 $ 5.29 $ 6.67
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Three Months Ended Year to Date ---------------------------------------------------------- 12/31/2002 12/31/2003 9/30/2003 6/30/2003 3/31/2003 ---------- ---------- ---------- ---------- ---------- REVENUES Oil and Gas Sales and Royalties $ 91,576 $ 23,760 $ 23,764 $ 24,460 $ 19,592 COST AND EXPENSES Write down to Market Value & Net Realized Loss Oil and Gas Operations 28,468 7,209 7,542 6,206 7,511 Depreciation, Depletion and Amortization 48,405 9,537 11,636 12,193 15,039 ---------- ---------- ---------- ---------- ---------- 76,873 16,746 19,178 18,399 22,550 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 14,703 7,014 4,586 6,061 (2,958) INCOME TAX PROVISION (BENEFIT) Current 5,146 2,455 1,605 2,121 (1,035) Deferred ---------- ---------- ---------- ---------- ---------- 5,146 2,455 1,605 2,121 (1,035) ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ 9,557 $ 4,559 $ 2,981 $ 3,940 $ (1,923) ========== ========== ========== ========== ========== KEY STATISTICS: Daily Production Liquids (Bbl) 4,923 4,818 5,052 4,913 4,909 Natural Gas (Mcf) 46,615 38,829 44,122 48,320 55,401 Average Realized Price Liquids ($/Bbl) $ 22.57 $ 26.91 $ 24.15 $ 21.29 $ 17.88 Natural Gas ($/Mcf) $ 3.00 $ 3.31 $ 3.09 $ 3.40 $ 2.35
NOBLE ENERGY, INC. AND SUBSIDIARIES DETERMINATION OF NON-GAAP MEASURES (UNAUDITED) (IN THOUSANDS) TABLE 1. Reconciliation of Consolidated Net Income to Adjusted Net Income
Three Months Twelve Months Ended Ended 12/31/2003 12/31/2003 ------------ ------------- Adjusted Net Income* $ 35,426 $ 148,975 Less After-tax Adjustments to Reconcile: Cumulative Effect of Change in Accounting Principle 5,839 Impairment of Operating Assets 20,759 20,759 Vietnam Write-off 5,924 5,924 Write Down to Market Value & Net Realized Loss 29,793 38,461 ---------- ---------- Net Income (Loss) $ (21,050) $ 77,992 ========== ==========
TABLE 2. Reconciliation of Domestic Operating Income to Adjusted Domestic Operating Income
Three Months Ended 12/31/2003 ------------ Adjusted Domestic Operating Income* $ 36,117 Less Pretax Adjustments to Reconcile: Impairment of Operating Assets 31,937 Write Down to Market Value & Net Realized Loss 45,835 ---------- Domestic Operating Income (Loss) After Discontinued Operations $ (41,655) ==========
TABLE 3. Reconciliation of International Operating Income to Adjusted International Operating Income
Three Months Ended 12/31/2003 ------------ Adjusted International Operating Income* $ 46,329 Less Pretax Adjustments to Reconcile: Vietnam Write-off 20,218 ---------- International Operating Income (Loss) $ 26,111 ==========
TABLE 4. Reconciliation of Other Intl. Operating Income to Adjusted Other Intl. Operating Income
Three Months Ended 12/31/2003 ------------ Adjusted Other International Operating Income* $ 8,267 Less Pretax Adjustments to Reconcile: Vietnam Write-off 20,218 ------------ Other International Operating Income (Loss) $ (11,951) ===========
TABLE 5. Reconciliation of Exploration Expense to Adjusted Exploration Expense
Three Months Ended 12/31/2003 ------------ Adjusted Exploration Expense* $ 128,600 Less Pretax Adjustments to Reconcile: Vietnam Write-off 20,218 ---------- Exploration Expense $ 148,818 ==========
* The tables above reconcile various non-GAAP measures to GAAP measures of net income, operating income and exploration expense. While these various measures are not GAAP measures of financial performance, management believes they are good tools for internal use and the investment community in evaluating the company's overall financial performance. Among management, professional research analysts, portfolio managers and investors, adjustments to GAAP measures for special, non-cash charges are typically made to establish a basis to evaluate a company's performance relative to prior periods and their peers.