Low Prices, Impairments Drag Noble Energy to a $2.4bn Loss

Noble Energy, a major player offshore Israel, recorded a net loss of $2.4bn for 2015, down from a net income of $1.2bn in 2014, the company reported February 17. In the fourth quarter the company reported a net loss of $2bn including a write-down of $1.27bn in asset impairments. Most of the impairments relate to operation in the US and Africa.

For the fourth quarter the company reported an operational loss of $1.7bn, up from an operational loss of $245mn in the fourth quarter 2014.

In its non-GAAP statement Noble reported an annual adjusted income of $212mn, down 75%. Its quarterly adjusted income amounted to $191mn or $0.44/share, better than analysts' forecasts.

“Starting early last year, we successfully executed on our strategy to align activity levels and underlying costs with the current market outlook, while maintaining strong operating momentum," said CEO David Stover. "These actions enabled us to enter 2016 with line of sight on managing the business within total cash flow."

Noble announced earlier this year that it will cut capex in 2016 by 50% to about $1.5bn and its dividend by 45% to $0.10 per share. In a guidance to 2016 the company said that it will invest $100mn in the eastern Mediterranean. Its biggest outlay will be in US unconventional ($1bn), US Gulf ($250mn) and west Africa ($75mn).

Last year's realized prices for natural gas, Noble said, were $2.10/mn Btu in the US, $0.27/mn Btu in Equatorial Guinea and $5.34/mn Btu in Israel. Noble's sales volumes in Israel averaged 252mn ft³/d. 

Noble ended the year with cash and cash equivalents of $1.028bn, down $155mn on 2014. Total debt stands at $8bn, up by $1.8bn from last year following its $2bn stock deal for Rosetta Resources. Noble issued in February last year $1bn in equity when it priced its shares at $47.50 each. In the last few weeks Noble share price dropped to under $30.

Ya'acov Zalel