In a Sept. 25 Company Comment, analyst John Freeman reported that Raymond James "raised its full-year EBITDA estimates on Noble Energy Inc. (NBL:NYSE) by 1%" after the company boosted its "estimated Q3/17 sales volume guidance by 10 Mboe/day." Revised guidance is 352–358 Mboe/day, which is higher than Raymond James' estimate of 347 Mboe/day.
Oil volumes are now expected to reach 126–130 Mbbl/day, Freeman wrote. This compares to previous guidance of 120–126 Mbbl/day and Raymond James' anticipated 124 Mbbl/day.
Natural gas volumes are now expected at 965–990 Mcf/day (versus 910–950 previously), but "this will be partially offset by lower than expected natural gas liquids volumes," noted Freeman.
What prompted the boost in guidance was "higher than expected volumes out of the DJ Basin, particularly from the Wells Ranch/East Pony areas, which are expected to rise by 10% quarter over quarter (QOQ)," Freeman explained. "Robust new well performance and better than anticipated pipeline pressures throughout the basin" drove the strong numbers.
"This is encouraging," concluded Freeman, given the negative impact in Q2/17 of "lower than expected production from legacy vertical wells resulting from delayed workover activity."
Noble's operations in Texas also are noteworthy. The company's "first central gathering facility in the Delaware was brought online in July and was recently connected to the Advantage Pipeline," Freeman indicated. Production out of the state "is expected to come in within guidance, with limited impact from Hurricane Harvey."
Noble's production in other areas of the world is "also coming in strong," said Freeman. For example, in the Gulf of Mexico, "volumes are expected at the high end of guidance," natural gas production in West Africa "is exceeding expectations" and gas production in Israel is "expected to come in within previous guidance."
Freeman's concluded that "Noble is performing well from an operational standpoint."
Raymond James has a Market Perform rating on Noble Energy. Its stock is currently trading at around $27.75 per share.
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