For an investor, Noble Energy (NBL) demonstrates a diverse portfolio of energy exploration and production assets. Energy production is skewed toward natural gas, but the high price of crude oil over recent quarters is bringing in the profits.
Noble Energy produces oil and natural gas at several global locations, including Equatorial Guinea, Israel, North America, and the North Sea. Energy production in the second quarter was 215,000 barrels of oil equivalent per day, up 3 percent from a year earlier. Average prices earned were $107 per barrel for crude oil and $50 per barrel of oil equivalent natural gas. The result was adjusted earnings per share of $1.44 for the quarter, up from $1.07 a year earlier.
The earnings forecasts for the second half of 2011 cover a wide area. Analyst estimates range from about 75 cents per share to more than $1.50 for both the third and fourth quarters of the year. Actual results obviously depend on oil and gas prices for the six-month period.
In North America, Noble Energy primarily has been producing natural gas in the DJ Basin, located where Colorado, Wyoming, Nebraska, and South Dakota meet. In August, management announced a 50 percent purchase of assets in the Marcellus Shale of western Pennsylvania from CONSOL Energy (CNX). The Marcellus Shale is proving to be one of the most productive natural gas finds in North America and the proximity to the East Coast population centers results in higher gas prices.
Analyst Peter Kissel at Howard Weil recently upgraded NBL to outperform. Kissel made positive remarks concerning the CONSOL joint venture and noted the recent share price pullback made an attractive entry point for a stock. He has a target price of $106. The company reports next on Oct. 20.
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