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We reiterate our Neutral recommendation on Noble Energy Inc. (NBL - Analyst Report). The oil and gas exploration and production (E&P) company presently carries a Zacks Rank #3 (Hold).

Why the Reiteration?

Noble Energy reported strong results in the fourth quarter 2012 with both the top and the bottom line beating the Zacks Consensus Estimates. Positive rate changes, effective execution of growth programs and persistent customer expansion led the company to post solid results.

We believe the company’s multiple exploration programs in the U.S. and overseas will help to maintain the momentum. With the start-up of Tamar and Alen prospects in the Eastern Mediterranean and West Africa, respectively, we believe the company will witness a ramp up in sales volume in the coming quarters thereby contributing to the top line.

Going forward, the company is expected to gain from its unconventional resource properties in the Niobrara formation as well as from the new Keota gas plant in Colorado. The big-time New Ventures exploration project in Nevada is likely to be a major earnings driver. Moreover, the high-quality reservoir discoveries in Carla in West Africa and Big Bend in the Gulf of Mexico are expected to further accentuate growth opportunities in the near term.

However, exposure to political instability in Africa and fluctuating oil and gas prices could undermine development opportunities.

Other Stocks to Consider

Other stocks that are presently performing well include Range Resources Corporation (RRC - Analyst Report), EPL Oil & Gas Inc. and Denbury Resources Inc. (DNR - Analyst Report). While Range Resources and EPL Oil & Gas carry a Zacks Rank #1 (Strong Buy) Denbury holds a Zacks Rank #2 (Buy).

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