NBL Concludes Kansas Divestiture

Exploration and production company, Noble Energy Inc. ( NBL - Analyst Report ) announced the closure of its Central Kansas asset sale to an affiliate of Houston-based energy company, Citation Oil and Gas Corp.

Earlier, in mid-August 2012, Noble Energy inked an agreement to divest its Central Kansas oil and gas assets for an amount of $140 million. The company secured roughly $130 million gains from this transaction after considering certain adjustments, effective April 1, 2012.

As per the deal, the company sold 250 producing wells in an area covering 14,000 acres with the primary production being that of crude oil. Net proved reserves from the Kansas region were 7 million barrels of oil equivalent. With this sale, Noble Energy completed four asset divestments in the first half of 2012.

We believe Noble Energy has successfully carried out its asset divesture program. The aggregate proceeds of $1.1 billion from this series of divestitures will help solidify the company’s balance sheet and enhance its liquidity profile. The company would exploit the liquid capital earned from these divestments for the development of its major deepwater projects and the existing onshore resource prospects.

Recently, Noble Energy finalized the sale of its Mid-continent assets in the Oklahoma and Texas region to United Petroleum Corporation, a business wing of Tulsa-based, Unit Corporation ( UNT - Snapshot Report ) , for roughly $594 million. The other two property sales concluded by the company were in the Permian basin and in the Dumbarton and Lochranza play in the North Sea for $309 million and $117 million, respectively.

Noble Energy expects third quarter 2012 sales volumes to average 242–250 thousand barrels of oil equivalent per day (MBoe/d). The company expects its sales volumes to improve due to higher contribution from Galapagos, continuation of the drilling programs in DJ Basin and Marcellus Shale, and increased sales in Israel. For 2012, the company expects volume in the range of 236 Mboe/d to 244 Mboe/d.

The Zacks Consensus Estimates for the third quarter and full year 2012 for Noble Energy are currently pegged at $1.05 per share and $4.91 per share, respectively. Noble Energy’s closest peer Anadarko Petroleum Corporation ( APC - Analyst Report ) during the second quarter 2012 monetized a part of its holding in the Lucius development project in Gulf of Mexico and in the Salt Creek field in Wyoming which led the company to accrue a total of $956 million.

The Texas-based company presently has a Zacks #3 Rank (Hold rating). Noble Energy engages in the acquisition, exploration, development, production, and marketing of crude oil, natural gas, and natural gas liquids in the DJ Basin, Marcellus Shale, deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. As of now, the company has a market capitalization of $16.23 billion.