Delaware
|
|
73-0785597
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. employer identification number)
|
100 Glenborough Drive, Suite 100
|
|
|
Houston, Texas
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77067
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(281) 872-3100
(Registrant’s telephone number, including area code)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
|
(Do not check if a smaller reporting company)
|
|
Part I.
Financial Information
|
|
|
|
Item 1.
Financial Statements
|
|
|
|
|
|
|
|
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Item 4.
Controls and Procedures
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Part II.
Other Information
|
|
|
|
Item 1.
Legal Proceedings
|
|
|
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Item 1A.
Risk Factors
|
|
|
|
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Item 3.
Defaults Upon Senior Securities
|
|
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Item 4.
Mine Safety Disclosures
|
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Item 5.
Other Information
|
|
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|
Item 6.
Exhibits
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Oil, Gas and NGL Sales
|
$
|
954
|
|
|
$
|
829
|
|
|
$
|
2,925
|
|
|
$
|
2,328
|
|
Income from Equity Method Investees
|
51
|
|
|
50
|
|
|
137
|
|
|
146
|
|
||||
Other Revenues
|
1
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Total
|
1,006
|
|
|
879
|
|
|
3,062
|
|
|
2,507
|
|
||||
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
||||||
Production Expense
|
158
|
|
|
142
|
|
|
492
|
|
|
406
|
|
||||
Exploration Expense
|
95
|
|
|
56
|
|
|
322
|
|
|
193
|
|
||||
Depreciation, Depletion and Amortization
|
368
|
|
|
215
|
|
|
987
|
|
|
619
|
|
||||
General and Administrative
|
93
|
|
|
89
|
|
|
286
|
|
|
253
|
|
||||
(Gain) Loss on Divestitures
|
(157
|
)
|
|
—
|
|
|
(167
|
)
|
|
(26
|
)
|
||||
Asset Impairments
|
—
|
|
|
—
|
|
|
73
|
|
|
137
|
|
||||
Other Operating (Income) Expense, Net
|
(1
|
)
|
|
2
|
|
|
19
|
|
|
45
|
|
||||
Total
|
556
|
|
|
504
|
|
|
2,012
|
|
|
1,627
|
|
||||
Operating Income
|
450
|
|
|
375
|
|
|
1,050
|
|
|
880
|
|
||||
Other (Income) Expense
|
|
|
|
|
|
|
|
|
|
||||||
(Gain) Loss on Commodity Derivative Instruments
|
135
|
|
|
(322
|
)
|
|
(46
|
)
|
|
(179
|
)
|
||||
Interest, Net of Amount Capitalized
|
36
|
|
|
14
|
|
|
95
|
|
|
51
|
|
||||
Other Non-Operating (Income) Expense, Net
|
4
|
|
|
(16
|
)
|
|
2
|
|
|
(16
|
)
|
||||
Total
|
175
|
|
|
(324
|
)
|
|
51
|
|
|
(144
|
)
|
||||
Income from Continuing Operations Before Income Taxes
|
275
|
|
|
699
|
|
|
999
|
|
|
1,024
|
|
||||
Income Tax Provision
|
111
|
|
|
208
|
|
|
312
|
|
|
297
|
|
||||
Income from Continuing Operations
|
164
|
|
|
491
|
|
|
687
|
|
|
727
|
|
||||
Discontinued Operations, Net of Tax
|
57
|
|
|
(50
|
)
|
|
89
|
|
|
22
|
|
||||
Net Income
|
$
|
221
|
|
|
$
|
441
|
|
|
$
|
776
|
|
|
$
|
749
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings Per Share, Basic
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from Continuing Operations
|
$
|
0.92
|
|
|
$
|
2.78
|
|
|
$
|
3.87
|
|
|
$
|
4.11
|
|
Discontinued Operations, Net of Tax
|
0.32
|
|
|
(0.28
|
)
|
|
0.50
|
|
|
0.14
|
|
||||
Net Income
|
$
|
1.24
|
|
|
$
|
2.50
|
|
|
$
|
4.37
|
|
|
$
|
4.25
|
|
Earnings Per Share, Diluted
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
0.91
|
|
|
$
|
2.67
|
|
|
$
|
3.81
|
|
|
$
|
3.99
|
|
Discontinued Operations, Net of Tax
|
0.32
|
|
|
(0.28
|
)
|
|
0.49
|
|
|
0.13
|
|
||||
Net Income
|
$
|
1.23
|
|
|
$
|
2.39
|
|
|
$
|
4.30
|
|
|
$
|
4.12
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Number of Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
178
|
|
|
177
|
|
|
178
|
|
|
176
|
|
||||
Diluted
|
180
|
|
|
180
|
|
|
180
|
|
|
179
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net Income
|
$
|
221
|
|
|
$
|
441
|
|
|
$
|
776
|
|
|
$
|
749
|
|
Other Items of Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Interest Rate Cash Flow Hedges
|
|
|
|
|
|
|
|
||||||||
Unrealized Change in Fair Value
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Less Tax Provision
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Net Change in Other
|
3
|
|
|
1
|
|
|
6
|
|
|
4
|
|
||||
Other Comprehensive Income
|
3
|
|
|
1
|
|
|
6
|
|
|
19
|
|
||||
Comprehensive Income
|
$
|
224
|
|
|
$
|
442
|
|
|
$
|
782
|
|
|
$
|
768
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
1,617
|
|
|
$
|
1,455
|
|
Accounts Receivable, Net
|
686
|
|
|
783
|
|
||
Other Current Assets
|
422
|
|
|
180
|
|
||
Total Current Assets
|
2,725
|
|
|
2,418
|
|
||
Property, Plant and Equipment
|
|
|
|
|
|
||
Oil and Gas Properties (Successful Efforts Method of Accounting)
|
18,422
|
|
|
19,057
|
|
||
Property, Plant and Equipment, Other
|
335
|
|
|
294
|
|
||
Total Property, Plant and Equipment, Gross
|
18,757
|
|
|
19,351
|
|
||
Accumulated Depreciation, Depletion and Amortization
|
(5,882
|
)
|
|
(6,569
|
)
|
||
Total Property, Plant and Equipment, Net
|
12,875
|
|
|
12,782
|
|
||
Goodwill
|
635
|
|
|
696
|
|
||
Other Noncurrent Assets
|
625
|
|
|
548
|
|
||
Total Assets
|
$
|
16,860
|
|
|
$
|
16,444
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
|
||
Accounts Payable - Trade
|
$
|
1,243
|
|
|
$
|
1,343
|
|
Other Current Liabilities
|
1,014
|
|
|
925
|
|
||
Total Current Liabilities
|
2,257
|
|
|
2,268
|
|
||
Long-Term Debt
|
3,747
|
|
|
4,100
|
|
||
Deferred Income Taxes, Noncurrent
|
2,157
|
|
|
2,059
|
|
||
Other Noncurrent Liabilities
|
691
|
|
|
752
|
|
||
Total Liabilities
|
8,852
|
|
|
9,179
|
|
||
Commitments and Contingencies
|
|
|
|
|
|||
Shareholders’ Equity
|
|
|
|
|
|
||
Preferred Stock - Par Value $1.00 per share; 4 Million Shares Authorized, None Issued
|
—
|
|
|
—
|
|
||
Common Stock - Par Value $0.01 and $3.33 1/3 per share; 500 Million and 250 Million Shares Authorized; 198 Million and 197 Million Shares Issued, Respectively
|
2
|
|
|
656
|
|
||
Additional Paid in Capital
|
3,244
|
|
|
2,497
|
|
||
Accumulated Other Comprehensive Loss
|
(94
|
)
|
|
(100
|
)
|
||
Treasury Stock, at Cost; 19 Million Shares
|
(651
|
)
|
|
(638
|
)
|
||
Retained Earnings
|
5,507
|
|
|
4,850
|
|
||
Total Shareholders’ Equity
|
8,008
|
|
|
7,265
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
16,860
|
|
|
$
|
16,444
|
|
|
Nine Months Ended
September 30, |
||||||
|
2012
|
|
2011
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net Income
|
$
|
776
|
|
|
$
|
749
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
|
|
|
|
|
|
||
Depreciation, Depletion and Amortization
|
1,020
|
|
|
681
|
|
||
Asset Impairments
|
73
|
|
|
139
|
|
||
Dry Hole Cost
|
141
|
|
|
57
|
|
||
Deferred Income Taxes
|
57
|
|
|
147
|
|
||
Dividends (Income) from Equity Method Investees, Net
|
4
|
|
|
23
|
|
||
Unrealized Gain on Commodity Derivative Instruments
|
(74
|
)
|
|
(140
|
)
|
||
Gain on Divestitures
|
(83
|
)
|
|
(26
|
)
|
||
Other Adjustments for Noncash Items Included in Income
|
115
|
|
|
52
|
|
||
Changes in Operating Assets and Liabilities
|
|
|
|
|
|||
(Increase) Decrease in Accounts Receivable
|
68
|
|
|
(7
|
)
|
||
Increase in Other Current Assets
|
(51
|
)
|
|
(17
|
)
|
||
Increase in Accounts Payable
|
122
|
|
|
131
|
|
||
Increase in Current Income Taxes Payable
|
51
|
|
|
52
|
|
||
Decrease in Other Current Liabilities
|
(13
|
)
|
|
(25
|
)
|
||
Other Operating Assets and Liabilities, Net
|
(35
|
)
|
|
(31
|
)
|
||
Net Cash Provided by Operating Activities
|
2,171
|
|
|
1,785
|
|
||
Cash Flows From Investing Activities
|
|
|
|
|
|
||
Additions to Property, Plant and Equipment
|
(2,685
|
)
|
|
(1,868
|
)
|
||
Marcellus Shale Acquisition
|
—
|
|
|
(519
|
)
|
||
Additions to Equity Method Investments
|
(35
|
)
|
|
(73
|
)
|
||
Proceeds from Divestitures
|
1,161
|
|
|
77
|
|
||
Net Cash Used in Investing Activities
|
(1,559
|
)
|
|
(2,383
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
|
|
||
Exercise of Stock Options
|
28
|
|
|
32
|
|
||
Excess Tax Benefits from Stock-Based Awards
|
14
|
|
|
11
|
|
||
Dividends Paid, Common Stock
|
(119
|
)
|
|
(104
|
)
|
||
Purchase of Treasury Stock
|
(13
|
)
|
|
(16
|
)
|
||
Proceeds from Credit Facilities
|
150
|
|
|
520
|
|
||
Repayment of Credit Facilities
|
(150
|
)
|
|
(470
|
)
|
||
Repayment of CONSOL Installment Loan
|
(328
|
)
|
|
—
|
|
||
Proceeds from Issuance of Senior Long-Term Debt, Net
|
—
|
|
|
836
|
|
||
Settlement of Interest Rate Derivative Instrument
|
—
|
|
|
(40
|
)
|
||
Repayment of Capital Lease Obligation
|
(32
|
)
|
|
—
|
|
||
Net Cash Provided By (Used In) Financing Activities
|
(450
|
)
|
|
769
|
|
||
Increase in Cash and Cash Equivalents
|
162
|
|
|
171
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
1,455
|
|
|
1,081
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
1,617
|
|
|
$
|
1,252
|
|
|
Common
Stock
|
|
Additional
Paid in
Capital
|
|
Accumulated Other
Comprehensive
Loss
|
|
Treasury
Stock at
Cost
|
|
Retained
Earnings
|
|
Total
Shareholders'
Equity
|
||||||||||||
December 31, 2011
|
$
|
656
|
|
|
$
|
2,497
|
|
|
$
|
(100
|
)
|
|
$
|
(638
|
)
|
|
$
|
4,850
|
|
|
$
|
7,265
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
776
|
|
|
776
|
|
||||||
Stock-based Compensation
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||||
Exercise of Stock Options
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Tax Benefits Related to Exercise of Stock Options
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||
Dividends (66 cents per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
(119
|
)
|
||||||
Changes in Treasury Stock, Net
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
||||||
Change in Par Value
|
(654
|
)
|
|
654
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net Change in Other
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
September 30, 2012
|
$
|
2
|
|
|
$
|
3,244
|
|
|
$
|
(94
|
)
|
|
$
|
(651
|
)
|
|
$
|
5,507
|
|
|
$
|
8,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2010
|
$
|
651
|
|
|
$
|
2,385
|
|
|
$
|
(104
|
)
|
|
$
|
(624
|
)
|
|
$
|
4,540
|
|
|
$
|
6,848
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
749
|
|
|
749
|
|
||||||
Stock-based Compensation
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||||
Exercise of Stock Options
|
2
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||||
Tax Benefits Related to Exercise of Stock Options
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Dividends (58 cents per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(104
|
)
|
||||||
Changes in Treasury Stock, Net
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
||||||
Interest Rate Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized Change in Fair Value
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Net Change in Other
|
2
|
|
|
(2
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
September 30, 2011
|
$
|
655
|
|
|
$
|
2,467
|
|
|
$
|
(85
|
)
|
|
$
|
(640
|
)
|
|
$
|
5,185
|
|
|
$
|
7,582
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Other Revenues
(1)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Production Expense
|
|
|
|
|
|
|
|
|
|
||||||
Lease Operating Expense
|
$
|
103
|
|
|
$
|
89
|
|
|
$
|
309
|
|
|
$
|
251
|
|
Production and Ad Valorem Taxes
|
31
|
|
|
38
|
|
|
112
|
|
|
108
|
|
||||
Transportation and Gathering Expense
|
24
|
|
|
15
|
|
|
71
|
|
|
47
|
|
||||
Total
|
$
|
158
|
|
|
$
|
142
|
|
|
$
|
492
|
|
|
$
|
406
|
|
Other Operating (Income) Expense, Net
|
|
|
|
|
|
|
|
|
|
||||||
Deepwater Gulf of Mexico Moratorium Expense
(2)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
Electricity Generation Expense
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Other, Net
|
(1
|
)
|
|
3
|
|
|
19
|
|
|
1
|
|
||||
Total
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
45
|
|
Other Non-Operating (Income) Expense, Net
|
|
|
|
|
|
|
|
|
|
||||||
Deferred Compensation (Income) Expense
(3)
|
$
|
7
|
|
|
$
|
(18
|
)
|
|
$
|
(1
|
)
|
|
$
|
(15
|
)
|
Interest Income
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(7
|
)
|
||||
Other (Income) Expense, Net
|
(2
|
)
|
|
4
|
|
|
4
|
|
|
6
|
|
||||
Total
|
$
|
4
|
|
|
$
|
(16
|
)
|
|
$
|
2
|
|
|
$
|
(16
|
)
|
(1)
|
Other revenues consist primarily of electricity sales from the Machala power plant, located in Machala, Ecuador, through May 2011. Electricity generation expense includes all operating and non-operating expenses associated with the plant, including depreciation and changes in the allowance for doubtful accounts. In May 2011, we transferred our assets in Ecuador to the Ecuadorian government.
|
(2)
|
Amounts relate to rig stand-by expense incurred prior to receiving a permit to resume drilling activities in the deepwater Gulf of Mexico.
|
(3)
|
Amounts represent increases (decreases) in the fair value of shares of our common stock held in a rabbi trust.
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
(millions)
|
|
|
|
||||
Accounts Receivable, Net
|
|
|
|
||||
Commodity Sales
|
$
|
264
|
|
|
$
|
356
|
|
Joint Interest Billings
|
295
|
|
|
313
|
|
||
Other
|
136
|
|
|
123
|
|
||
Allowance for Doubtful Accounts
|
(9
|
)
|
|
(9
|
)
|
||
Total
|
$
|
686
|
|
|
$
|
783
|
|
Other Current Assets
|
|
|
|
|
|
||
Inventories, Current
|
$
|
88
|
|
|
$
|
78
|
|
Commodity Derivative Assets
|
35
|
|
|
10
|
|
||
Deferred Income Taxes, Net
(1)
|
104
|
|
|
41
|
|
||
Probable Insurance Claims
(2)
|
39
|
|
|
15
|
|
||
Assets Held for Sale
(3)
|
73
|
|
|
—
|
|
||
Prepaid Expenses and Other Current Assets
|
83
|
|
|
36
|
|
||
Total
|
$
|
422
|
|
|
$
|
180
|
|
Other Noncurrent Assets
|
|
|
|
|
|
||
Equity Method Investments
|
$
|
363
|
|
|
$
|
329
|
|
Mutual Fund Investments
|
110
|
|
|
99
|
|
||
Commodity Derivative Assets
|
24
|
|
|
37
|
|
||
Other Assets, Noncurrent
|
128
|
|
|
83
|
|
||
Total
|
$
|
625
|
|
|
$
|
548
|
|
Other Current Liabilities
|
|
|
|
|
|
||
Production and Ad Valorem Taxes
|
$
|
117
|
|
|
$
|
121
|
|
Commodity Derivative Liabilities
|
16
|
|
|
76
|
|
||
Income Taxes Payable
|
209
|
|
|
127
|
|
||
Asset Retirement Obligations
|
41
|
|
|
33
|
|
||
Interest Payable
|
40
|
|
|
56
|
|
||
CONSOL Installment Payment
(4)
|
322
|
|
|
324
|
|
||
Current Portion of FPSO Lease Obligation
|
48
|
|
|
45
|
|
||
Liabilities Associated with Assets Held for Sale
(3)
|
34
|
|
|
—
|
|
||
Other
|
187
|
|
|
143
|
|
||
Total
|
$
|
1,014
|
|
|
$
|
925
|
|
Other Noncurrent Liabilities
|
|
|
|
|
|
||
Deferred Compensation Liabilities
|
$
|
237
|
|
|
$
|
222
|
|
Asset Retirement Obligations
|
279
|
|
|
344
|
|
||
Accrued Benefit Costs
|
88
|
|
|
88
|
|
||
Commodity Derivative Liabilities
|
5
|
|
|
7
|
|
||
Other
|
82
|
|
|
91
|
|
||
Total
|
$
|
691
|
|
|
$
|
752
|
|
(1)
|
Increase from December 31, 2011 is due to reclassification of deferred income tax assets from long-term to short-term as certain foreign entities are estimated to begin utilizing net operating loss carryforwards in 2012 and 2013.
|
(2)
|
Amounts represent the costs incurred to date of the Leviathan-2 appraisal well and expected well abandonment costs in excess of the insurance deductible less insurance proceeds received to date. See Note 9. Asset Retirement Obligations.
|
(3)
|
Assets held for sale consists primarily of oil and gas properties and liabilities held for sale consists primarily of asset retirement obligations.
|
(4)
|
See Note 3. Acquisitions and Dispositions and Note 5. Debt.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Oil and Gas Sales
|
$
|
54
|
|
|
$
|
45
|
|
|
$
|
194
|
|
|
$
|
271
|
|
Income Before Income Taxes
|
38
|
|
|
23
|
|
|
117
|
|
|
161
|
|
||||
Income Tax Expense
|
3
|
|
|
73
|
|
|
50
|
|
|
139
|
|
||||
Operating Income (Loss), Net of Tax
|
35
|
|
|
(50
|
)
|
|
67
|
|
|
22
|
|
||||
Gain on Sale, Net of Tax
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Discontinued Operations, Net of Tax
|
$
|
57
|
|
|
$
|
(50
|
)
|
|
$
|
89
|
|
|
$
|
22
|
|
|
|
Nine Months Ended
September 30, |
||
|
|
2012
|
||
(millions)
|
|
|
||
Cash Proceeds
|
|
$
|
1,044
|
|
Less
|
|
|
||
Net Book Value of Assets Sold
|
|
(838
|
)
|
|
Goodwill Allocated to Assets Sold
|
|
(61
|
)
|
|
Asset Retirement Obligations Associated with Assets Sold
|
|
20
|
|
|
Other Closing Adjustments
|
|
2
|
|
|
Gain on Divestitures
|
|
$
|
167
|
|
|
September 30,
2012 |
||
(millions)
|
|
||
Unproved Oil and Gas Properties
|
$
|
803
|
|
Proved Oil and Gas Properties
|
386
|
|
|
Investment in CONE Gathering LLC
|
69
|
|
|
Total Assets Acquired
(1)
|
$
|
1,258
|
|
(1)
|
Total reflects impact of
$17 million
imputed interest on CONSOL installment payments.
|
•
|
estimated quantities of crude oil and natural gas reserves prepared by our qualified petroleum engineers;
|
•
|
management’s estimates of future commodity prices based on NYMEX Henry Hub natural gas futures prices and adjusted for estimated location and quality differentials;
|
•
|
estimated future production rates based on our experience with similar properties which we operate; and
|
•
|
estimated timing and amounts of future operating and development costs based on our experience with similar properties which we operate.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
South Raton (Deepwater Gulf of Mexico)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
Piceance (Onshore US)
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||
East Texas (Onshore US)
|
—
|
|
|
—
|
|
|
—
|
|
|
116
|
|
||||
Other (Onshore US)
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
137
|
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||||||||||
|
Debt
|
|
Interest Rate
|
|
|
Debt
|
|
Interest Rate
|
|
||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
|
||||||
Credit Facility, due October 14, 2016
(1)
|
$
|
—
|
|
|
—
|
|
|
|
$
|
—
|
|
|
—
|
|
|
CONSOL Installment Payments, due September 30, 2012 and 2013
|
328
|
|
|
1.79
|
%
|
(2)
|
|
656
|
|
|
1.76
|
%
|
(2)
|
||
FPSO Lease Obligation
|
322
|
|
|
—
|
|
|
|
355
|
|
|
—
|
|
|
||
5¼% Senior Notes, due April 15, 2014
|
200
|
|
|
5.25
|
%
|
|
|
200
|
|
|
5.25
|
%
|
|
||
8¼% Senior Notes, due March 1, 2019
|
1,000
|
|
|
8.25
|
%
|
|
|
1,000
|
|
|
8.25
|
%
|
|
||
4.15% Senior Notes, due December 15, 2021
|
1,000
|
|
|
4.15
|
%
|
|
|
1,000
|
|
|
4.15
|
%
|
|
||
7¼% Senior Notes, due October 15, 2023
|
100
|
|
|
7.25
|
%
|
|
|
100
|
|
|
7.25
|
%
|
|
||
8% Senior Notes, due April 1, 2027
|
250
|
|
|
8.00
|
%
|
|
|
250
|
|
|
8.00
|
%
|
|
||
6% Senior Notes, due March 1, 2041
|
850
|
|
|
6.00
|
%
|
|
|
850
|
|
|
6.00
|
%
|
|
||
7¼% Senior Debentures, due August 1, 2097
|
84
|
|
|
7.25
|
%
|
|
|
84
|
|
|
7.25
|
%
|
|
||
Total
|
4,134
|
|
|
|
|
|
|
4,495
|
|
|
|
|
|
||
Unamortized Discount
|
(17
|
)
|
|
|
|
|
|
(26
|
)
|
|
|
|
|
||
Total Debt, Net of Discount
|
4,117
|
|
|
|
|
|
|
4,469
|
|
|
|
|
|
||
Less Amounts Due Within One Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Current portion of CONSOL Installment Payment, net of discount
|
(322
|
)
|
|
|
|
|
|
(324
|
)
|
|
|
|
|
||
FPSO Lease Obligation
|
(48
|
)
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
||
Long-Term Debt Due After One Year
|
$
|
3,747
|
|
|
|
|
|
|
$
|
4,100
|
|
|
|
|
|
(1)
|
Our Credit Agreement provides for a
$4.0 billion
unsecured revolving Credit Facility. The Credit Facility is available for general corporate purposes.
|
(2)
|
Imputed rate based on the prevailing market rates for similar debt instruments at the date of assessment.
|
|
|
|
|
Swaps
|
|
Collars
|
||||||||||
Settlement
Period
|
Type of Contract
|
Index
|
Bbls Per
Day
|
Weighted
Average
Fixed
Price
|
|
Weighted
Average
Short Put
Price
|
Weighted
Average
Floor
Price
|
Weighted
Average
Ceiling
Price
|
||||||||
Instruments Entered Into as of September 30, 2012
|
|
|
|
|
|
|
||||||||||
2012
|
Swaps
|
NYMEX WTI
(1)
|
5,000
|
$
|
91.84
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
2012
|
Swaps
|
Dated Brent
|
8,000
|
89.06
|
|
|
—
|
|
—
|
|
—
|
|
||||
2012
|
Three-Way Collars
|
NYMEX WTI
|
23,000
|
—
|
|
|
61.09
|
|
83.04
|
|
101.66
|
|
||||
2012
|
Three-Way Collars
|
Dated Brent
|
3,000
|
—
|
|
|
70.00
|
|
95.83
|
|
105.00
|
|
||||
2013
|
Swaps
|
NYMEX WTI
|
3,000
|
87.00
|
|
|
—
|
|
—
|
|
—
|
|
||||
2013
|
Swaps
|
Dated Brent
|
3,000
|
98.03
|
|
|
—
|
|
—
|
|
—
|
|
||||
2013
|
Two-Way Collars
|
NYMEX WTI
|
5,000
|
—
|
|
|
—
|
|
95.00
|
|
115.00
|
|
||||
2013
|
Three-Way Collars
|
NYMEX WTI
|
7,000
|
—
|
|
|
63.57
|
|
83.57
|
|
109.04
|
|
||||
2013
|
Three-Way Collars
|
Dated Brent
|
26,000
|
—
|
|
|
82.88
|
|
100.86
|
|
127.32
|
|
||||
2014
|
Swaps
|
NYMEX WTI
|
11,000
|
90.26
|
|
|
—
|
|
—
|
|
—
|
|
||||
2014
|
Swaps
|
Dated Brent
|
8,000
|
105.94
|
|
|
—
|
|
—
|
|
—
|
|
||||
2014
|
Three-Way Collars
|
NYMEX WTI
|
4,000
|
—
|
|
|
77.00
|
|
92.00
|
|
106.13
|
|
||||
2014
|
Three-Way Collars
|
Dated Brent
|
10,000
|
—
|
|
|
85.00
|
|
98.50
|
|
129.24
|
|
(1)
|
West Texas Intermediate
|
|
|
|
|
Swaps
|
|
Collars
|
||||||||||
Settlement
Period
|
Type of Contract
|
Index
|
MMBtu
Per Day
|
Weighted
Average
Fixed
Price
|
|
Weighted
Average
Short Put
Price
|
Weighted
Average
Floor
Price
|
Weighted
Average
Ceiling
Price
|
||||||||
Instruments Entered Into as of September 30, 2012
|
|
|
|
|
|
|
||||||||||
2012
|
Swaps
|
NYMEX HH
(1)
|
30,000
|
$
|
5.10
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
2012
|
Two-Way Collars
|
NYMEX HH
|
40,000
|
—
|
|
|
—
|
|
3.25
|
|
5.14
|
|
||||
2012
|
Three-Way Collars
|
NYMEX HH
|
110,000
|
—
|
|
|
4.44
|
|
5.25
|
|
6.66
|
|
||||
2013
|
Swaps
|
NYMEX HH
|
30,000
|
5.25
|
|
|
—
|
|
—
|
|
—
|
|
||||
2013
|
Two-Way Collars
|
NYMEX HH
|
40,000
|
—
|
|
|
—
|
|
3.25
|
|
5.14
|
|
||||
2013
|
Three-Way Collars
|
NYMEX HH
|
100,000
|
—
|
|
|
3.88
|
|
4.75
|
|
5.63
|
|
||||
2014
|
Three-Way Collars
|
NYMEX HH
|
55,000
|
—
|
|
|
2.50
|
|
3.50
|
|
5.25
|
|
(1)
|
Henry Hub
|
Settlement
Period
|
Index
|
Index Less Differential
|
MMBtu Per Day
|
Weighted Average
Differential
|
||
2012
|
IFERC CIG
(1)
|
NYMEX HH
|
150,000
|
$
|
(0.52
|
)
|
(1)
|
Colorado Interstate Gas – Northern System
|
Fair Value of Derivative Instruments
|
|||||||||||||||||||||||
|
Asset Derivative Instruments
|
|
Liability Derivative Instruments
|
||||||||||||||||||||
|
September 30,
2012 |
|
December 31,
2011 |
|
September 30,
2012 |
|
December 31,
2011 |
||||||||||||||||
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance Sheet Location
|
|
Fair
Value
|
|
Balance Sheet Location
|
|
Fair
Value
|
|
Balance Sheet Location
|
|
Fair
Value
|
||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity Derivative
Instruments
|
Current
Assets
|
|
$
|
35
|
|
|
Current Assets
|
|
$
|
10
|
|
|
Current Liabilities
|
|
$
|
16
|
|
|
Current Liabilities
|
|
$
|
76
|
|
|
Noncurrent Assets
|
|
24
|
|
|
Noncurrent Assets
|
|
37
|
|
|
Noncurrent Liabilities
|
|
5
|
|
|
Noncurrent Liabilities
|
|
7
|
|
||||
Total
|
|
|
$
|
59
|
|
|
|
|
$
|
47
|
|
|
|
|
$
|
21
|
|
|
|
|
$
|
83
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Realized Mark-to-Market (Gain) Loss
|
$
|
4
|
|
|
$
|
(22
|
)
|
|
$
|
28
|
|
|
$
|
(39
|
)
|
Unrealized Mark-to-Market (Gain) Loss
|
131
|
|
|
(300
|
)
|
|
(74
|
)
|
|
(140
|
)
|
||||
Total (Gain) Loss on Commodity Derivative Instruments
|
$
|
135
|
|
|
$
|
(322
|
)
|
|
$
|
(46
|
)
|
|
$
|
(179
|
)
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||
|
Quoted Prices in
Active Markets
(Level 1)
(1)
|
|
Significant Other
Observable Inputs
(Level 2)
(2)
|
|
Significant
Unobservable
Inputs (Level 3)
(3)
|
|
Adjustment
(4)
|
|
Fair Value Measurement
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Mutual Fund Investments
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110
|
|
Commodity Derivative Instruments
|
—
|
|
|
102
|
|
|
—
|
|
|
(43
|
)
|
|
59
|
|
|||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity Derivative Instruments
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
43
|
|
|
(21
|
)
|
|||||
Portion of Deferred Compensation Liability Measured at Fair Value
|
(169
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(169
|
)
|
|||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mutual Fund Investments
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99
|
|
Commodity Derivative Instruments
|
—
|
|
|
99
|
|
|
—
|
|
|
(52
|
)
|
|
47
|
|
|||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity Derivative Instruments
|
—
|
|
|
(135
|
)
|
|
—
|
|
|
52
|
|
|
(83
|
)
|
|||||
Portion of Deferred Compensation Liability Measured at Fair Value
|
(162
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
(1)
|
Level 1 measurements are fair value measurements which use quoted market prices (unadjusted) in active markets for identical assets or liabilities. We use Level 1 inputs when available as Level 1 inputs generally provide the most reliable evidence of fair value.
|
(2)
|
Level 2 measurements are fair value measurements which use inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly.
|
(3)
|
Level 3 measurements are fair value measurements which use unobservable inputs.
|
(4)
|
Amount represents the impact of master netting agreements that allow us to net cash settle asset and liability positions with the same counterparty.
|
|
Fair Value Measurements Using
|
|
|
||||||||||||
Description
|
Quoted Prices in Active Markets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
Net Book Value
(1)
|
Total Pre-tax (Non-cash) Impairment Loss
|
||||||||||
(millions)
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|||||||||||
Impaired Oil and Gas Properties
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Three Months Ended September 30, 2011
|
|
|
|
|
|||||||||||
Impaired Oil and Gas Properties
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|||||||||||
Impaired Oil and Gas Properties
|
—
|
|
—
|
|
172
|
|
245
|
|
73
|
|
|||||
Nine Months Ended September 30, 2011
|
|
|
|
|
|||||||||||
Impaired Oil and Gas Properties
|
—
|
|
—
|
|
32
|
|
169
|
|
137
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Long-Term Debt, Net of Unamortized Discount
(1)
|
$
|
3,795
|
|
|
$
|
4,500
|
|
|
$
|
4,114
|
|
|
$
|
4,733
|
|
(1)
|
Excludes Aseng FPSO lease obligation. No floating rate debt was outstanding at
September 30, 2012
or
December 31, 2011
. See Note 5. Debt.
|
|
Nine Months Ended September 30, 2012
|
||
(millions)
|
|
||
Capitalized Exploratory Well Costs, Beginning of Period
|
$
|
696
|
|
Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves
|
164
|
|
|
Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves
|
(27
|
)
|
|
Capitalized Exploratory Well Costs Charged to Expense
(1)
|
(108
|
)
|
|
Other
(2)
|
(19
|
)
|
|
Capitalized Exploratory Well Costs, End of Period
|
$
|
706
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
(millions)
|
|
|
|
||||
Exploratory Well Costs Capitalized for a Period of One Year or Less
|
$
|
301
|
|
|
$
|
318
|
|
Exploratory Well Costs Capitalized for a Period Greater Than One Year Since Commencement of Drilling
|
405
|
|
|
378
|
|
||
Balance at End of Period
|
$
|
706
|
|
|
$
|
696
|
|
Number of Projects with Exploratory Well Costs That Have Been Capitalized for a Period Greater Than One Year Since Commencement of Drilling
|
9
|
|
|
9
|
|
|
|
|
Suspended Since
|
||||||||||||
|
Total
|
|
2011
|
|
2010
|
|
2009 & Prior
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Country/Project:
|
|
|
|
|
|
|
|
||||||||
Offshore Equatorial Guinea
|
|
|
|
|
|
|
|
||||||||
Blocks O and I
|
$
|
156
|
|
|
$
|
44
|
|
|
$
|
6
|
|
|
$
|
106
|
|
Offshore Cameroon
|
|
|
|
|
|
|
|
|
|
|
|
||||
YoYo
|
45
|
|
|
5
|
|
|
2
|
|
|
38
|
|
||||
Offshore Israel
|
|
|
|
|
|
|
|
|
|
|
|
||||
Leviathan
|
78
|
|
|
37
|
|
|
41
|
|
|
—
|
|
||||
Leviathan-1 Deep
|
28
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Dalit
|
22
|
|
|
—
|
|
|
1
|
|
|
21
|
|
||||
Offshore Cyprus
|
|
|
|
|
|
|
|
||||||||
Cyprus A-1
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Deepwater Gulf of Mexico
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gunflint
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||
2 projects of $10 million or less each
|
12
|
|
|
6
|
|
|
6
|
|
|
—
|
|
||||
Total
|
$
|
405
|
|
|
$
|
130
|
|
|
$
|
56
|
|
|
$
|
219
|
|
|
Nine Months Ended
September 30, |
||||||
|
2012
|
|
2011
|
||||
(millions)
|
|
|
|
||||
Asset Retirement Obligations, Beginning Balance
|
$
|
377
|
|
|
$
|
253
|
|
Liabilities Incurred
|
24
|
|
|
2
|
|
||
Liabilities Settled
|
(98
|
)
|
|
(19
|
)
|
||
Revision of Estimate
|
30
|
|
|
9
|
|
||
Accretion Expense
|
21
|
|
|
15
|
|
||
Other
|
(34
|
)
|
|
—
|
|
||
Asset Retirement Obligations, Ending Balance
|
$
|
320
|
|
|
$
|
260
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations
|
$
|
164
|
|
|
$
|
491
|
|
|
$
|
687
|
|
|
$
|
727
|
|
Earnings Adjustment from Assumed Conversion of Dilutive Shares of Common Stock in Rabbi Trust
(1)
|
—
|
|
|
(12
|
)
|
|
(1
|
)
|
|
(10
|
)
|
||||
Income from Continuing Operations Used for Diluted Earnings Per Share Calculation
|
$
|
164
|
|
|
$
|
479
|
|
|
$
|
686
|
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Number of Shares Outstanding, Basic
|
178
|
|
|
177
|
|
|
178
|
|
|
176
|
|
||||
Incremental Shares From Assumed Conversion of Dilutive Stock Options, Restricted Stock and Shares of Common Stock in Rabbi Trust
|
2
|
|
|
3
|
|
|
2
|
|
|
3
|
|
||||
Weighted Average Number of Shares Outstanding, Diluted
|
180
|
|
|
180
|
|
|
180
|
|
|
179
|
|
||||
Earnings from Continuing Operations Per Share, Basic
|
$
|
0.92
|
|
|
$
|
2.78
|
|
|
$
|
3.87
|
|
|
$
|
4.11
|
|
Earnings from Continuing Operations Per Share, Diluted
|
0.91
|
|
|
2.67
|
|
|
3.81
|
|
|
3.99
|
|
||||
Number of antidilutive stock options, shares of restricted stock and shares of common stock in rabbi trust excluded from calculation above
|
3
|
|
|
1
|
|
|
2
|
|
|
2
|
|
(1)
|
Consistent with GAAP, when dilutive, deferred compensation gains or losses, net of tax, are excluded from net income while our common shares held in the rabbi trust are included in the diluted share count. For this reason, the diluted earnings per share calculations for the three months ended
September 30, 2011
and for the
nine
months ended
September 30, 2012
and
2011
exclude deferred compensation gains, net of tax.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
37
|
|
|
$
|
110
|
|
|
$
|
138
|
|
|
$
|
145
|
|
Deferred
|
74
|
|
|
98
|
|
|
174
|
|
|
152
|
|
||||
Total Income Tax Provision
|
$
|
111
|
|
|
$
|
208
|
|
|
$
|
312
|
|
|
$
|
297
|
|
Effective Tax Rate
|
40
|
%
|
|
30
|
%
|
|
31
|
%
|
|
29
|
%
|
|
Consolidated
|
|
United
States
|
|
West
Africa
|
|
Eastern
Mediterranean
|
|
Other Int'l &
Corporate
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from Third Parties
|
$
|
955
|
|
|
$
|
594
|
|
|
$
|
280
|
|
|
$
|
48
|
|
|
$
|
33
|
|
Income from Equity Method Investees
|
51
|
|
|
3
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|||||
Total Revenues
|
1,006
|
|
|
597
|
|
|
328
|
|
|
48
|
|
|
33
|
|
|||||
DD&A
|
368
|
|
|
240
|
|
|
61
|
|
|
49
|
|
|
18
|
|
|||||
Gain on Divestitures
(1)
|
(157
|
)
|
|
(157
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on Commodity Derivative Instruments
(2)
|
135
|
|
|
42
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|||||
Income (Loss) from Continuing Operations Before Income Taxes
|
275
|
|
|
337
|
|
|
85
|
|
|
(11
|
)
|
|
(136
|
)
|
|||||
Three Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues from Third Parties
|
$
|
829
|
|
|
$
|
520
|
|
|
$
|
153
|
|
|
$
|
108
|
|
|
$
|
48
|
|
Income from Equity Method Investees
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|||||
Total Revenues
|
879
|
|
|
520
|
|
|
203
|
|
|
108
|
|
|
48
|
|
|||||
DD&A
|
215
|
|
|
180
|
|
|
13
|
|
|
8
|
|
|
14
|
|
|||||
Gain on Commodity Derivative Instruments
(2)
|
(322
|
)
|
|
(213
|
)
|
|
(109
|
)
|
|
—
|
|
|
—
|
|
|||||
Income (Loss) from Continuing Operations Before Income Taxes
|
699
|
|
|
418
|
|
|
270
|
|
|
88
|
|
|
(77
|
)
|
|||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from Third Parties
|
$
|
2,925
|
|
|
$
|
1,674
|
|
|
$
|
995
|
|
|
$
|
121
|
|
|
$
|
135
|
|
Income from Equity Method Investees
|
137
|
|
|
6
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|||||
Total Revenues
|
3,062
|
|
|
1,680
|
|
|
1,126
|
|
|
121
|
|
|
135
|
|
|||||
DD&A
|
987
|
|
|
670
|
|
|
196
|
|
|
64
|
|
|
57
|
|
|||||
Gain on Divestitures
(1)
|
(167
|
)
|
|
(167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Asset Impairments
(3)
|
73
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
(Gain) Loss on Commodity Derivative Instruments
(2)
|
(46
|
)
|
|
(60
|
)
|
|
14
|
|
|
—
|
|
|
—
|
|
|||||
Income (Loss) from Continuing Operations Before Income Taxes
|
999
|
|
|
578
|
|
|
767
|
|
|
26
|
|
|
(372
|
)
|
|||||
Nine Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues from Third Parties
|
$
|
2,361
|
|
|
$
|
1,578
|
|
|
$
|
401
|
|
|
$
|
236
|
|
|
$
|
146
|
|
Income from Equity Method Investees
|
146
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|||||
Total Revenues
|
2,507
|
|
|
1,578
|
|
|
547
|
|
|
236
|
|
|
146
|
|
|||||
DD&A
|
619
|
|
|
534
|
|
|
30
|
|
|
19
|
|
|
36
|
|
|||||
Gain on Divestitures
(1)
|
(26
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||
Asset Impairments
(3)
|
137
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on Commodity Derivative Instruments
(2)
|
(179
|
)
|
|
(163
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||||
Income (Loss) from Continuing Operations Before Income Taxes
|
1,024
|
|
|
631
|
|
|
460
|
|
|
184
|
|
|
(251
|
)
|
|||||
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
635
|
|
|
$
|
635
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
16,787
|
|
|
11,014
|
|
|
2,782
|
|
|
2,443
|
|
|
548
|
|
|||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
696
|
|
|
696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Assets
|
16,106
|
|
|
11,201
|
|
|
2,728
|
|
|
1,751
|
|
|
426
|
|
•
|
Executive Overview;
|
•
|
Operating Outlook;
|
•
|
Results of Operations; and
|
•
|
Liquidity and Capital Resources.
|
•
|
net income of
$221 million
, as compared with
$441 million
for
third
quarter
2011
;
|
•
|
loss on commodity derivative instruments of
$135 million
(including unrealized mark-to-market loss of
$131 million
) as compared with a gain on commodity derivative instruments of
$322 million
(including unrealized mark-to-market gain of
$300 million
) for
third
quarter
2011
;
|
•
|
diluted earnings per share of
$1.23
, as compared with
$2.39
for
third
quarter
2011
;
|
•
|
cash flow provided by operating activities of
$924 million
, as compared with
$556 million
for
third
quarter
2011
;
|
•
|
ending cash balance of
$1.6 billion
, as compared with
$1.5 billion
at
December 31, 2011
;
|
•
|
received
$1.2 billion
in proceeds from divestments of non-core assets;
|
•
|
exercised option to increase credit facility from $3.0 billion to $4.0 billion, enhancing our liquidity position;
|
•
|
capital spending, on a cash basis, of
$785 million
as compared with
$607 million
for
third
quarter of
2011
; and
|
•
|
ratio of debt-to-book capital of
34%
as compared with
38%
at
December 31, 2011
.
|
•
|
record quarterly production from continuing operations of 242 MBoe/d, up 11% year over year;
|
•
|
horizontal net production within the DJ Basin increased to 31 MBoe/d, up 29% from last quarter and more than double from the third quarter of 2011;
|
•
|
Marcellus production grew to 102 MMcfe/d quarterly average, an increase of 37% over last quarter;
|
•
|
initiated production from the wet gas area of the Marcellus Shale that indicates our acreage is within the “super rich” area of the play;
|
•
|
entered into new positions offshore Falkland Islands and Sierra Leone; and
|
•
|
secured contract with new-build drillship capable of both reaching deep oil targets in the Eastern Mediterranean and supporting global drilling program.
|
•
|
the sale of approximately 2.7 Tcf of natural gas to IEC over an approximate 15-year period. IEC has the option to increase this amount to 3.5 Tcf, under certain conditions;
|
•
|
the sale of approximately 1.7 Tcf of natural gas to seven remaining customers over a 16 to 17 year period. Some of the contracts provide for increase or reduction in total quantities; and
|
•
|
sales prices based on an initial base price subject to price indexation over the life of the contract and with a floor.
|
•
|
documentation of environmental changes that are coincident with shale gas production;
|
•
|
development of technology or management practices that mitigate undesigned environmental changes; and
|
•
|
development of monitoring technologies to (1) assess the impact of shale gas production on air quality and (2)determine if zonal isolation between producing formations and drinking water aquifers is maintained after hydraulic fracturing.
|
•
|
overall level and timing of capital expenditures which, as discussed below and dependent upon our drilling success, are expected to maintain our near-term production volumes;
|
•
|
ongoing development activity in the Wattenberg area and horizontal drilling in the Niobrara formation in the DJ Basin;
|
•
|
pace of increase of development activity in both the wet gas and dry gas areas of the Marcellus Shale;
|
•
|
divestments of non-core operating assets;
|
•
|
natural field decline in the deepwater Gulf of Mexico, Gulf Coast and Rocky Mountain areas of our US operations and the Mari-B field in Israel, where we reduced production to manage the reservoir (See Recent Developments Offshore Israel, above);
|
•
|
variations in sales volumes of natural gas from the Alba field in Equatorial Guinea related to potential downtime at the methanol, LPG and/or LNG plants;
|
•
|
Israeli demand for electricity which affects demand for natural gas as fuel for power generation, market growth, and production rates from the Noa and Pinnacles wells, offshore Israel;
|
•
|
variations in West Africa sales volumes due to potential FPSO downtime and timing of liftings;
|
•
|
potential hurricane-related volume curtailments in the deepwater Gulf of Mexico and Gulf Coast areas;
|
•
|
potential winter storm-related volume curtailments in the Wattenberg, Rocky Mountain, and/or Marcellus Shale areas of our US operations;
|
•
|
third party facilities reliability in the Wattenberg and/or Rocky Mountain areas of our US operations which may cause restrictions or interruptions in mid-stream processing facilities;
|
•
|
potential pipeline and processing facility capacity constraints in the Wattenberg, Rocky Mountain, and/or Marcellus Shale areas of our US operations;
|
•
|
potential drilling and/or hydraulic fracturing permit delays due to future regulatory changes;
|
•
|
potential purchases of producing properties; and
|
•
|
potential shut-in of US producing properties if storage capacity becomes unavailable.
|
•
|
commodity prices, including price realizations on specific crude oil and natural gas production including the impact of NGLs;
|
•
|
cash flows from operations;
|
•
|
operating and development costs and possible inflationary pressures;
|
•
|
permitting activity in the deepwater Gulf of Mexico;
|
•
|
drilling results;
|
•
|
CONSOL Carried Cost Obligation (See Liquidity and Capital Resources - Contractual Obligations below);
|
•
|
property acquisitions and divestitures;
|
•
|
increase in exploration activities in new venture areas, including offshore Sierra Leone and the Falkland Islands;
|
•
|
availability and cost of financing;
|
•
|
potential legislative or regulatory changes regarding the use of hydraulic fracturing;
|
•
|
potential changes in the fiscal regimes of the US and other countries in which we operate; and
|
•
|
impact of new laws and regulations, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which has resulted in significant derivatives regulations and disclosure requirements, on our business practices. See
Impact of Dodd-Frank Act,
below.
|
•
|
ensuring energy security in the economy;
|
•
|
providing a framework for substantial resource exports;
|
•
|
designating a certain percentage of production from each field for the domestic natural gas market;
|
•
|
maintaining competition in the different sectors of the local economy;
|
•
|
maximizing economic and political benefits; and
|
•
|
leveraging environmental advantages with respect to the use of natural gas.
|
•
|
as a rule, all reservoirs should be charged with supplying a certain percentage of natural gas to the local economy, with minimum requirements based on reservoir size
(minimum of 25%-50%). The minimum supply obligations will not apply for reservoirs under a certain size (25
billion cubic meters, or
BCM) but the reservoirs will be required to be connected to the domestic market. The recommendations allow for a lease in a developed reservoir to exchange its export quota against an "obligation to supply to the domestic market" which applies to any other leaseholder which submitted a development plan so long as approval therefor is given by the Petroleum Commissioner in the Ministry of Energy and Water Resources and by the Antitrust Authority
;
|
•
|
a determination that the quantity of natural gas that should be guaranteed in favor of the local economy should be 450 BCM and that the quantity should be updated in five years;
|
•
|
the export of natural gas should be permitted as long as the quantity from all reservoirs does not exceed 500 BCM, which amount may be reassessed;
|
•
|
requiring regulatory approval for export,
with export licenses eligible
for periods up to 25 years;
|
•
|
there should be an absolute preference for the export of natural gas from a facility in an area under Israeli control, including Israel's exclusive economic zone, although further study of various export means (such as export from a foreign area governed by bilateral agreement) and statutory feasibility is necessary; and
|
•
|
steps should be taken to increase competition in the natural gas market.
|
•
|
loss of our license to operate in other countries where the laws and regulations or terms of production sharing or other contracts prohibit disclosures of certain information, resulting in a reduction in our profitability;
|
•
|
decrease in our ability to compete for new sources of reserves with state-controlled national oil companies or large multi-national companies not subject to disclosures under the Final Rules; and
|
•
|
reduction in profitability and cash flows and a decrease in the price of our common stock.
|
|
|
|
|
|
Increase
(Decrease) from Prior Year |
|||||
|
2012
|
|
2011
|
|
||||||
(millions)
|
|
|
|
|
|
|||||
Three Months Ended September 30,
|
|
|
|
|
|
|||||
Oil, Gas and NGL Sales
|
$
|
954
|
|
|
$
|
829
|
|
|
15
|
%
|
Income from Equity Method Investees
|
51
|
|
|
50
|
|
|
2
|
%
|
||
Other Revenues
|
1
|
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
1,006
|
|
|
$
|
879
|
|
|
14
|
%
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30,
|
|
|
|
|
|
|||||
Oil, Gas and NGL Sales
|
$
|
2,925
|
|
|
$
|
2,328
|
|
|
26
|
%
|
Income from Equity Method Investees
|
137
|
|
|
146
|
|
|
(6
|
)%
|
||
Other Revenues
|
—
|
|
|
33
|
|
|
(100
|
)%
|
||
Total
|
$
|
3,062
|
|
|
$
|
2,507
|
|
|
22
|
%
|
|
Sales Volumes
|
|
Average Realized Sales Prices
|
||||||||||||||||||||
|
Crude Oil & Condensate
(MBbl/d)
|
|
Natural
Gas
(MMcf/d)
|
|
NGLs
(MBbl/d)
|
|
Total
(MBoe/d)
(1)
|
|
Crude Oil & Condensate
(Per Bbl)
|
|
Natural
Gas
(Per Mcf)
|
|
NGLs
(Per Bbl)
|
||||||||||
Three Months Ended September 30, 2012
|
|||||||||||||||||||||||
United States
|
52
|
|
|
440
|
|
|
16
|
|
|
141
|
|
|
$
|
93.67
|
|
|
$
|
2.61
|
|
|
$
|
29.71
|
|
Equatorial Guinea
(2)
|
27
|
|
|
251
|
|
|
—
|
|
|
70
|
|
|
108.90
|
|
|
0.27
|
|
|
—
|
|
|||
Israel
|
—
|
|
|
116
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
4.43
|
|
|
—
|
|
|||
China
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
107.61
|
|
|
—
|
|
|
—
|
|
|||
Total Consolidated Operations
|
82
|
|
|
807
|
|
|
16
|
|
|
233
|
|
|
99.30
|
|
|
2.14
|
|
|
29.71
|
|
|||
Equity Investees
(3)
|
2
|
|
|
|
|
|
7
|
|
|
9
|
|
|
93.09
|
|
|
—
|
|
|
61.34
|
|
|||
Total Continuing Operations
|
84
|
|
|
807
|
|
|
23
|
|
|
242
|
|
|
$
|
99.18
|
|
|
$
|
2.14
|
|
|
$
|
39.05
|
|
Three Months Ended September 30, 2011
|
|||||||||||||||||||||||
United States
|
38
|
|
|
358
|
|
|
16
|
|
|
113
|
|
|
$
|
91.21
|
|
|
$
|
3.98
|
|
|
$
|
49.57
|
|
Equatorial Guinea
(2)
|
15
|
|
|
250
|
|
|
—
|
|
|
57
|
|
|
108.11
|
|
|
0.27
|
|
|
—
|
|
|||
Israel
|
—
|
|
|
228
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
5.15
|
|
|
—
|
|
|||
China
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
108.57
|
|
|
—
|
|
|
—
|
|
|||
Total Consolidated Operations
|
57
|
|
|
836
|
|
|
16
|
|
|
212
|
|
|
96.82
|
|
|
3.18
|
|
|
49.57
|
|
|||
Equity Investees
(3)
|
2
|
|
|
—
|
|
|
5
|
|
|
7
|
|
|
107.90
|
|
|
—
|
|
|
72.70
|
|
|||
Total Continuing Operations
|
59
|
|
|
836
|
|
|
21
|
|
|
219
|
|
|
$
|
96.24
|
|
|
$
|
3.18
|
|
|
$
|
55.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2012
|
|||||||||||||||||||||||
United States
|
47
|
|
|
435
|
|
|
16
|
|
|
135
|
|
|
$
|
96.20
|
|
|
$
|
2.44
|
|
|
$
|
34.87
|
|
Equatorial Guinea
(2)
|
32
|
|
|
232
|
|
|
—
|
|
|
71
|
|
|
110.68
|
|
|
0.27
|
|
|
—
|
|
|||
Israel
|
—
|
|
|
95
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
4.67
|
|
|
—
|
|
|||
China
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
117.44
|
|
|
—
|
|
|
—
|
|
|||
Total Consolidated Operations
|
83
|
|
|
762
|
|
|
16
|
|
|
226
|
|
|
102.90
|
|
|
2.06
|
|
|
34.87
|
|
|||
Equity Investees
(3)
|
2
|
|
|
—
|
|
|
6
|
|
|
8
|
|
|
104.09
|
|
|
—
|
|
|
63.93
|
|
|||
Total Continuing Operations
|
85
|
|
|
762
|
|
|
22
|
|
|
234
|
|
|
$
|
102.92
|
|
|
$
|
2.06
|
|
|
$
|
42.60
|
|
Nine Months Ended September 30, 2011
|
|||||||||||||||||||||||
United States
|
37
|
|
|
373
|
|
|
14
|
|
|
114
|
|
|
$
|
95.10
|
|
|
$
|
4.09
|
|
|
$
|
49.19
|
|
Equatorial Guinea
(2)
|
13
|
|
|
244
|
|
|
—
|
|
|
54
|
|
|
108.40
|
|
|
0.27
|
|
|
—
|
|
|||
Israel
|
—
|
|
|
180
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
4.80
|
|
|
—
|
|
|||
China
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
104.99
|
|
|
—
|
|
|
—
|
|
|||
Total Consolidated Operations
|
54
|
|
|
797
|
|
|
14
|
|
|
202
|
|
|
98.98
|
|
|
3.11
|
|
|
49.19
|
|
|||
Equity Investees
(3)
|
2
|
|
|
—
|
|
|
5
|
|
|
7
|
|
|
109.20
|
|
|
—
|
|
|
74.70
|
|
|||
Total Continuing Operations
|
56
|
|
|
797
|
|
|
19
|
|
|
209
|
|
|
$
|
99.42
|
|
|
$
|
3.11
|
|
|
$
|
56.06
|
|
(1)
|
Natural gas is converted on the basis of six Mcf of gas per one barrel of oil equivalent. This ratio reflects an energy content equivalency and not a price or revenue equivalency. Given commodity price differentials, the price for a barrel of oil equivalent for natural gas is significantly less than the price for a barrel of oil.
|
(2)
|
Natural gas from the Alba field in Equatorial Guinea is under contract for $0.25 per MMBtu to a methanol plant, an LPG plant and an LNG plant. The methanol and LPG plants are owned by affiliated entities accounted for under the equity method of accounting.
|
(3)
|
Volumes represent sales of condensate and LPG from the Alba plant in Equatorial Guinea. See
Income from Equity Method Investees
below.
|
|
Commodity Price Increase (Decrease)
|
||||||||||||||
|
2012
|
|
2011
|
||||||||||||
|
Crude Oil & Condensate
|
|
Natural
Gas
|
|
Crude Oil & Condensate
|
|
Natural
Gas
|
||||||||
|
(Per Bbl)
|
|
(Per Mcf)
|
|
(Per Bbl)
|
|
(Per Mcf)
|
||||||||
Three Months Ended September 30,
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
(0.03
|
)
|
|
$
|
0.31
|
|
|
$
|
(1.23
|
)
|
|
$
|
0.79
|
|
Equatorial Guinea
|
(6.57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Consolidated Operations
|
(2.22
|
)
|
|
0.17
|
|
|
(0.83
|
)
|
|
0.34
|
|
||||
Total Continuing Operations
|
(2.17
|
)
|
|
0.17
|
|
|
(0.80
|
)
|
|
0.34
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
(0.82
|
)
|
|
$
|
0.33
|
|
|
$
|
(3.52
|
)
|
|
$
|
0.74
|
|
Equatorial Guinea
|
(6.48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Consolidated Operations
|
(2.98
|
)
|
|
0.19
|
|
|
(2.43
|
)
|
|
0.34
|
|
||||
Total Continuing Operations
|
(2.91
|
)
|
|
0.19
|
|
|
(2.34
|
)
|
|
0.34
|
|
|
Sales Revenues
|
||||||||||||||
|
Crude Oil & Condensate
|
|
Natural
Gas
|
|
NGLs
|
|
Total
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2011
|
$
|
513
|
|
|
$
|
246
|
|
|
$
|
70
|
|
|
$
|
829
|
|
Changes due to
|
|
|
|
|
|
|
|
|
|
|
|
||||
Increase (Decrease) in Sales Volumes
|
219
|
|
|
(8
|
)
|
|
—
|
|
|
211
|
|
||||
Increase (Decrease) in Sales Prices
|
19
|
|
|
(79
|
)
|
|
(26
|
)
|
|
(86
|
)
|
||||
Three Months Ended September 30, 2012
|
$
|
751
|
|
|
$
|
159
|
|
|
$
|
44
|
|
|
$
|
954
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2011
|
$
|
1,464
|
|
|
$
|
670
|
|
|
$
|
194
|
|
|
$
|
2,328
|
|
Changes due to
|
|
|
|
|
|
|
|
|
|
|
|||||
Increase (Decrease) in Sales Volumes
|
788
|
|
|
(25
|
)
|
|
28
|
|
|
791
|
|
||||
Increase (Decrease) in Sales Prices
|
87
|
|
|
(216
|
)
|
|
(65
|
)
|
|
(194
|
)
|
||||
Nine Months Ended September 30, 2012
|
$
|
2,339
|
|
|
$
|
429
|
|
|
$
|
157
|
|
|
$
|
2,925
|
|
•
|
higher sales volumes in the DJ Basin attributable to the acceleration of our horizontal drilling programs in the Wattenberg area;
|
•
|
commencement of production at Galapagos and South Raton in the deepwater Gulf of Mexico which increased production by approximately 10 MBoe/d, net, during the
third
quarter of
2012
;
|
•
|
higher sales volumes in Equatorial Guinea due to the commencement of oil production at Aseng during the fourth quarter of 2011, which impacted our sales volumes by approximately 20 MBbl/d, net in the first
nine
months of
2012
as compared with
2011
; and
|
•
|
slight increases in average realized prices;
|
•
|
reduction in sales volumes due to the sales of non-core, onshore US properties during the third quarter of 2012;
|
•
|
a volume reduction in the Gulf of Mexico of nearly seven MBoe/d as a result of shut-ins due to Hurricane Isaac; and
|
•
|
natural field decline in non-core onshore US and deepwater Gulf of Mexico areas.
|
•
|
decreases in total consolidated average realized prices primarily due to oversupply and above average levels of natural gas in storage in the US;
|
•
|
lower sales volumes due to the sales of non-core onshore US properties during the third quarter of 2012;
|
•
|
lower sales volumes in the Wattenberg and Rocky Mountain areas of our US operations due to third-party processing facility constraints;
|
•
|
lower sales volumes from the Alba field, offshore Equatorial Guinea, due to scheduled maintenance activities at the non-operated Alba facilities; and
|
•
|
lower sales volumes in Israel due to a reduction in the rate of production from the Mari-B field in order to manage the reservoir;
|
•
|
higher sales volumes attributable to the acceleration of our horizontal drilling programs in the Wattenberg area; and
|
•
|
new sales volumes from Marcellus Shale producing properties which we acquired September 30, 2011 and current Marcellus Shale development activities, which added 81 MMcf/d, net to our sales volumes for the first
nine
months of 2012.
|
|
|
|
|
|
Increase
(Decrease) from Prior Year |
|||||
|
2012
|
|
2011
|
|
||||||
(millions)
|
|
|
|
|
|
|||||
Three Months Ended September 30,
|
|
|
|
|
|
|||||
Production Expense
|
$
|
158
|
|
|
$
|
142
|
|
|
11
|
%
|
Exploration Expense
|
95
|
|
|
56
|
|
|
70
|
%
|
||
Depreciation, Depletion and Amortization
|
368
|
|
|
215
|
|
|
71
|
%
|
||
General and Administrative
|
93
|
|
|
89
|
|
|
4
|
%
|
||
Gain on Divestitures
|
(157
|
)
|
|
—
|
|
|
—
|
%
|
||
Other Operating (Income) Expense, Net
|
(1
|
)
|
|
2
|
|
|
(150
|
)%
|
||
Total
|
$
|
556
|
|
|
$
|
504
|
|
|
10
|
%
|
|
|
|
|
|
|
|||||
Nine Months Ended September 30,
|
|
|
|
|
|
|||||
Production Expense
|
$
|
492
|
|
|
$
|
406
|
|
|
21
|
%
|
Exploration Expense
|
322
|
|
|
193
|
|
|
67
|
%
|
||
Depreciation, Depletion and Amortization
|
987
|
|
|
619
|
|
|
59
|
%
|
||
General and Administrative
|
286
|
|
|
253
|
|
|
13
|
%
|
||
Gain on Divestitures
|
(167
|
)
|
|
(26
|
)
|
|
542
|
%
|
||
Asset Impairments
|
73
|
|
|
137
|
|
|
(47
|
)%
|
||
Other Operating (Income) Expense, Net
|
19
|
|
|
45
|
|
|
(58
|
)%
|
||
Total
|
$
|
2,012
|
|
|
$
|
1,627
|
|
|
24
|
%
|
|
Total per BOE
(1)
|
|
Total
|
|
United
States
|
|
Equatorial Guinea
|
|
Israel
|
|
Other Int'l,
Corporate
|
||||||||||||
(millions, except unit rate)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease Operating Expense
(2)
|
$
|
4.82
|
|
|
$
|
103
|
|
|
$
|
68
|
|
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
8
|
|
Production and Ad Valorem Taxes
|
1.43
|
|
|
31
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Transportation and Gathering Expense
|
1.11
|
|
|
24
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Total Production Expense
|
$
|
7.36
|
|
|
$
|
158
|
|
|
$
|
115
|
|
|
$
|
21
|
|
|
$
|
6
|
|
|
$
|
16
|
|
Three Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lease Operating Expense
(2)
|
$
|
4.56
|
|
|
$
|
89
|
|
|
$
|
66
|
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
9
|
|
Production and Ad Valorem Taxes
|
1.95
|
|
|
38
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Transportation and Gathering Expense
|
0.77
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Production Expense
|
$
|
7.28
|
|
|
$
|
142
|
|
|
$
|
106
|
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease Operating Expense
(2)
|
$
|
4.98
|
|
|
$
|
309
|
|
|
$
|
207
|
|
|
$
|
64
|
|
|
$
|
13
|
|
|
$
|
25
|
|
Production and Ad Valorem Taxes
|
1.81
|
|
|
112
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Transportation and Gathering Expense
|
1.14
|
|
|
71
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Total Production Expense
|
$
|
7.93
|
|
|
$
|
492
|
|
|
$
|
358
|
|
|
$
|
64
|
|
|
$
|
13
|
|
|
$
|
57
|
|
Nine Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lease Operating Expense
(2)
|
$
|
4.56
|
|
|
$
|
251
|
|
|
$
|
188
|
|
|
$
|
35
|
|
|
$
|
9
|
|
|
$
|
19
|
|
Production and Ad Valorem Taxes
|
1.96
|
|
|
108
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Transportation and Gathering Expense
|
0.86
|
|
|
47
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Total Production Expense
|
$
|
7.38
|
|
|
$
|
406
|
|
|
$
|
310
|
|
|
$
|
35
|
|
|
$
|
9
|
|
|
$
|
52
|
|
(1)
|
Consolidated unit rates exclude sales volumes and expenses attributable to equity method investees.
|
(2)
|
Lease operating expense includes oil and gas operating costs (labor, fuel, repairs, replacements, saltwater disposal and other related lifting costs) and workover expense.
|
•
|
an increase in US lease operating, transportation and gathering expenses due to higher sales volumes from the Wattenberg area due to ongoing development activities and new production from the Marcellus Shale;
|
•
|
an increase in US taxes due to the enactment of the annual Marcellus Shale well impact fee by the Pennsylvania legislature in first quarter 2012;
|
•
|
an increase in Equatorial Guinea lease operating expense associated with the Aseng field which began producing in November 2011; and
|
•
|
an increase in Israel lease operating expense due to the start-up of the Noa and Pinnacles wells.
|
|
Total
|
|
United States
|
|
West
Africa
(1)
|
|
Eastern Mediterranean
(2)
|
|
Other Int'l,
Corporate
(3)
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|||||||||||
Dry Hole Cost
|
$
|
23
|
|
|
$
|
3
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Seismic
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exploration Expense
|
58
|
|
|
5
|
|
|
43
|
|
|
2
|
|
|
8
|
|
|||||
Other
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Exploration Expense
|
$
|
95
|
|
|
$
|
22
|
|
|
$
|
63
|
|
|
$
|
2
|
|
|
$
|
8
|
|
Three Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Dry Hole Cost
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Seismic
|
8
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Exploration Expense
|
32
|
|
|
14
|
|
|
1
|
|
|
1
|
|
|
16
|
|
|||||
Other
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Exploration Expense
|
$
|
56
|
|
|
$
|
22
|
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2012
|
|
|
|
|
|
|
|
|
|||||||||||
Dry Hole Cost
|
$
|
141
|
|
|
$
|
120
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Seismic
|
53
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Exploration Expense
|
110
|
|
|
13
|
|
|
47
|
|
|
4
|
|
|
46
|
|
|||||
Other
|
18
|
|
|
17
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Total Exploration Expense
|
$
|
322
|
|
|
$
|
197
|
|
|
$
|
69
|
|
|
$
|
4
|
|
|
$
|
52
|
|
Nine Months Ended September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Dry Hole Cost
|
$
|
57
|
|
|
$
|
20
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Seismic
|
47
|
|
|
28
|
|
|
1
|
|
|
3
|
|
|
15
|
|
|||||
Exploration Expense
|
75
|
|
|
26
|
|
|
4
|
|
|
1
|
|
|
44
|
|
|||||
Other
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Exploration Expense
|
$
|
193
|
|
|
$
|
88
|
|
|
$
|
42
|
|
|
$
|
4
|
|
|
$
|
59
|
|
(1)
|
West Africa includes Equatorial Guinea, Cameroon, and Senegal/Guinea-Bissau.
|
(2)
|
Eastern Mediterranean includes Israel and Cyprus.
|
(3)
|
Other International includes various international new ventures.
|
•
|
$40 million related to the non-operated AGC Profond block offshore Senegal/Guinea-Bissau, which was written off due to our decision not to participate in the second appraisal period;
|
•
|
dry hole cost of $20 million incurred through September 30, 2012, related to the Trema exploratory well (offshore Cameroon), which did not locate commercial quantities of hydrocarbons. We expect to record an additional $15 million of dry hole cost related to the Trema well in the fourth quarter of 2012;
|
•
|
dry hole cost of $118 million related to the Deep Blue exploratory well (deepwater Gulf of Mexico). Although Deep Blue was successful in locating hydrocarbons, we decided not to develop the prospect due to near-term lease expiration as well as other considerations;
|
•
|
acquisition of seismic information for the deepwater Gulf of Mexico lease sale; and
|
•
|
staff expense associated with new ventures and corporate expenditures.
|
•
|
dry hole cost associated with exploratory drilling in the US Rocky Mountain area and offshore Senegal/Guinea-Bissau;
|
•
|
acquisition of seismic information for Wattenberg, Rocky Mountain and deepwater Gulf of Mexico areas in the US, and international new ventures; and
|
•
|
staff expense associated with new ventures and corporate expenditures.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
DD&A Expense (millions)
(1)
|
$
|
368
|
|
|
$
|
215
|
|
|
$
|
987
|
|
|
$
|
619
|
|
Unit Rate per BOE
(2)
|
$
|
17.16
|
|
|
$
|
11.02
|
|
|
$
|
15.92
|
|
|
$
|
11.22
|
|
(1)
|
For DD&A expense by geographical area, see Item 1. Financial Statements – Note 12. Segment Information.
|
(2)
|
Consolidated unit rates exclude sales volumes and expenses attributable to equity method investees.
|
•
|
higher sales volumes in the DJ Basin onshore US and the addition of DD&A expense related to the Marcellus Shale;
|
•
|
the start up of Noa and Pinnacles (offshore Israel) which have higher DD&A rates;
|
•
|
the start up of Galapagos and South Raton in the deepwater Gulf of Mexico which have higher DD&A rates; and
|
•
|
the startup of the Aseng field which includes the Aseng FPSO in its depreciation base;
|
•
|
the impact of sales of non-core onshore US properties during the third quarter of 2012.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
G&A Expense (millions)
|
$
|
93
|
|
|
$
|
89
|
|
|
$
|
286
|
|
|
$
|
253
|
|
Unit Rate per BOE
(1)
|
$
|
4.31
|
|
|
$
|
4.56
|
|
|
$
|
4.61
|
|
|
$
|
4.59
|
|
(1)
|
Consolidated unit rates exclude sales volumes and expenses attributable to equity method investees.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Gain on Divestitures
|
$
|
(157
|
)
|
|
$
|
—
|
|
|
$
|
(167
|
)
|
|
$
|
(26
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Asset Impairments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
137
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Deepwater Gulf of Mexico Moratorium Expense
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
Electricity Generation Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Other, Net
|
(1
|
)
|
|
3
|
|
|
19
|
|
|
1
|
|
||||
Total
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
19
|
|
|
$
|
45
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
(Gain) Loss on Commodity Derivative Instruments
|
$
|
135
|
|
|
$
|
(322
|
)
|
|
$
|
(46
|
)
|
|
$
|
(179
|
)
|
Interest, Net of Amount Capitalized
|
36
|
|
|
14
|
|
|
95
|
|
|
51
|
|
||||
Other Non-Operating (Income) Expense, Net
|
4
|
|
|
(16
|
)
|
|
2
|
|
|
(16
|
)
|
||||
Total
|
$
|
175
|
|
|
$
|
(324
|
)
|
|
$
|
51
|
|
|
$
|
(144
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions, except unit rate)
|
|
|
|
|
|
|
|
||||||||
Interest Expense
|
$
|
69
|
|
|
$
|
48
|
|
|
$
|
207
|
|
|
$
|
138
|
|
Capitalized Interest
|
(33
|
)
|
|
(34
|
)
|
|
(112
|
)
|
|
(87
|
)
|
||||
Interest Expense, Net
|
$
|
36
|
|
|
$
|
14
|
|
|
$
|
95
|
|
|
$
|
51
|
|
Unit Rate per BOE
(1)
|
$
|
1.68
|
|
|
$
|
0.70
|
|
|
$
|
1.52
|
|
|
$
|
0.93
|
|
(1)
|
Consolidated unit rates exclude sales volumes and expenses attributable to equity method investees.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Oil and Gas Sales
|
$
|
54
|
|
|
$
|
45
|
|
|
$
|
194
|
|
|
$
|
271
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Production Expense
|
14
|
|
|
11
|
|
|
39
|
|
|
43
|
|
||||
DD&A Expense
|
1
|
|
|
10
|
|
|
33
|
|
|
62
|
|
||||
Other Operating (Income) Expense, Net
|
1
|
|
|
1
|
|
|
5
|
|
|
5
|
|
||||
Income Before Income Taxes
|
38
|
|
|
23
|
|
|
117
|
|
|
161
|
|
||||
Income Tax Expense
|
3
|
|
|
73
|
|
|
50
|
|
|
139
|
|
||||
Operating Income (Loss), Net of Tax
|
35
|
|
|
(50
|
)
|
|
67
|
|
|
22
|
|
||||
Gain on Sale, Net of Tax
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Income (Loss) From Discontinued Operations
|
$
|
57
|
|
|
$
|
(50
|
)
|
|
$
|
89
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
||||||||
Key Statistics:
|
|
|
|
|
|
|
|
||||||||
Daily Production
|
|
|
|
|
|
|
|
||||||||
Crude Oil & Condensate (MBbl/d)
|
5
|
|
|
4
|
|
|
6
|
|
|
8
|
|
||||
Natural Gas (MMcf/d)
|
3
|
|
|
4
|
|
|
4
|
|
|
6
|
|
||||
Average Realized Price
|
|
|
|
|
|
|
|
||||||||
Crude Oil & Condensate (Per Bbl)
|
$
|
106.03
|
|
|
$
|
115.67
|
|
|
$
|
113.11
|
|
|
$
|
112.99
|
|
Natural Gas (Per Mcf)
|
8.37
|
|
|
8.41
|
|
|
8.31
|
|
|
7.90
|
|
|
September 30,
|
|
December 31,
|
||||
|
2012
|
|
2011
|
||||
(millions, except percentages)
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
1,617
|
|
|
$
|
1,455
|
|
Amount Available to be Borrowed Under Credit Facility
(1)
|
4,000
|
|
|
3,000
|
|
||
Total Liquidity
|
$
|
5,617
|
|
|
$
|
4,455
|
|
Total Debt
(2)
|
$
|
4,134
|
|
|
$
|
4,495
|
|
Total Shareholders' Equity
|
8,008
|
|
|
7,265
|
|
||
Ratio of Debt-to-Book Capital
(3)
|
34
|
%
|
|
38
|
%
|
(1)
|
See
Credit Facility
below.
|
(2)
|
Total debt includes Aseng FPSO lease obligation and remaining CONSOL installment payment and excludes unamortized debt discount.
|
(3)
|
We define our ratio of debt-to-book capital as total debt (which includes long-term debt excluding unamortized discount, the current portion of long-term debt, and short-term borrowings) divided by the sum of total debt plus shareholders’ equity.
|
|
Nine Months Ended
September 30, |
||||||
|
2012
|
|
2011
|
||||
(millions)
|
|
|
|
||||
Total Cash Provided By (Used in)
|
|
|
|
||||
Operating Activities
|
$
|
2,171
|
|
|
$
|
1,785
|
|
Investing Activities
|
(1,559
|
)
|
|
(2,383
|
)
|
||
Financing Activities
|
(450
|
)
|
|
769
|
|
||
Increase in Cash and Cash Equivalents
|
$
|
162
|
|
|
$
|
171
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(millions)
|
|
|
|
|
|
|
|
||||||||
Acquisition, Capital and Exploration Expenditures
|
|
|
|
|
|
|
|
||||||||
Unproved Property Acquisition
|
$
|
(38
|
)
|
|
$
|
826
|
|
|
$
|
49
|
|
|
$
|
883
|
|
Proved Property Acquisition
|
—
|
|
|
370
|
|
|
—
|
|
|
370
|
|
||||
Exploration
|
95
|
|
|
58
|
|
|
316
|
|
|
286
|
|
||||
Development
|
648
|
|
|
604
|
|
|
2,102
|
|
|
1,478
|
|
||||
Corporate and Other
|
19
|
|
|
40
|
|
|
44
|
|
|
128
|
|
||||
Total
|
$
|
724
|
|
|
$
|
1,898
|
|
|
$
|
2,511
|
|
|
$
|
3,145
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in Equity Method Investee
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
35
|
|
|
$
|
73
|
|
Increase in FPSO Lease Obligation
|
—
|
|
|
5
|
|
|
—
|
|
|
56
|
|
•
|
our growth strategies;
|
•
|
our ability to successfully and economically explore for and develop crude oil and natural gas resources;
|
•
|
anticipated trends in our business;
|
•
|
our future results of operations;
|
•
|
our liquidity and ability to finance our exploration and development activities;
|
•
|
market conditions in the oil and gas industry;
|
•
|
our ability to make and integrate acquisitions;
|
•
|
the impact of governmental fiscal terms and/or regulation, such as that involving the protection of the environment or marketing of production, as well as other regulations; and
|
•
|
access to resources.
|
•
|
exploration activities in frontier areas may not result in commercially productive quantities of crude oil and natural gas reserves;
|
•
|
there have been numerous acts of piracy, kidnapping, civil strife, regional conflict, cross-border violence, and war, as well as violence associated with corruption, drug trafficking and regime changes in the countries of West Africa which could disrupt our operations;
|
•
|
the remote location of the Falkland Islands makes it more difficult and time-consuming to transport personnel, equipment and supplies; and
|
•
|
harsh weather and rough seas offshore the Falkland Islands could limit certain exploration activities, such as seismic activities, during certain periods.
|
Period
|
Total Number of
Shares
Purchased
(1)
|
|
Average
Price Paid
Per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
|
|||||
|
|
|
|
|
|
|
(in thousands)
|
|||||
7/1/2012 - 7/31/2012
|
209
|
|
|
$
|
86.50
|
|
|
—
|
|
|
—
|
|
8/1/2012 - 8/31/2012
|
91
|
|
|
89.03
|
|
|
—
|
|
|
—
|
|
|
9/1/2012 - 9/30/2012
|
174
|
|
|
91.92
|
|
|
—
|
|
|
—
|
|
|
Total
|
474
|
|
|
$
|
88.98
|
|
|
—
|
|
|
—
|
|
(1)
|
Stock repurchases during the period related to common stock received by us from employees for the payment of withholding taxes due on shares of common stock issued under stock-based compensation plans.
|
|
|
|
|
NOBLE ENERGY, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date
|
|
October 25, 2012
|
|
/s/ Kenneth M. Fisher
|
|
|
|
|
Kenneth M. Fisher
Senior Vice President, Chief Financial Officer
|
|
||
Exhibit Number
|
|
Exhibit
|
|
|
|
3.1
|
|
Certificate of Incorporation of the Registrant (as amended through May 25, 2012), (filed as Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and incorporated herein by reference).
|
|
|
|
3.2
|
|
By-Laws of Noble Energy, Inc. as amended through June 1, 2009 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (Date of Event: February 17, 2009) filed February 20, 2009 and incorporated herein by reference).
|
|
|
|
10.1
|
|
Amendment No. 1 dated July 22, 2012 to the Gas Sale and Purchase Agreement dated March 14, 2012, by and between Noble Energy Mediterranean Ltd, and Isramco Negev 2 Limited Partnership, Delek Drilling Limited Partnership, Avner Oil Exploration Limited Partnership, and Dor Gas Exploration Limited Partnership (Sellers) and The Israel Electric Corporation Limited (Purchaser), filed herewith.
|
|
|
|
10.2
|
|
Commitment Increase Agreement (Existing Lenders) dated September 28, 2012, among Noble Energy, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and certain other commercial lending institutions party thereto (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (Date of Event: September 28, 2012), filed October 2, 2012 and incorporated herein by reference).
|
|
|
|
10.3
|
|
Commitment Increase Agreement (New Lenders) dated September 28, 2012, among Noble Energy, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and certain other commercial lending institutions party thereto (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K (Date of Event: September 28, 2012), filed October 2, 2012 and incorporated herein by reference).
|
|
|
|
31.1
|
|
Certification of the Company’s Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241), filed herewith.
|
|
|
|
31.2
|
|
Certification of the Company’s Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241), filed herewith.
|
|
|
|
32.1
|
|
Certification of the Company’s Chief Executive Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), filed herewith.
|
|
|
|
32.2
|
|
Certification of the Company’s Chief Financial Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), filed herewith.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Schema Document
|
|
|
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
(1)
|
Noble Energy Mediterranean Ltd
., a Cayman Islands company that has limited liability, registered in Israel as a foreign company No. 560017162, having its principal place of business at 12 Abba Eban Boulevard, Herzlia, 46725 Israel;
|
(2)
|
The Israel Electric Corporation Limited
, an Israeli Company having its principal place of business at 1 Nativ Haor Street, Haifa, 31000 Israel (the "
Buyer
") of the other part.
|
(A)
|
The Sellers and the Buyer are Parties to a Gas Sale and Purchase Agreement Dated March 14, 2012 (the "
Agreement
");
|
(B)
|
The Agreement is conditioned upon receipt of certain approvals as set out in Article 2.1.3 of the Agreement;
|
(C)
|
On June 14, 2012 the Public Utility Authority-Electricity and the Anti-Trust Authority issued approvals that were subject to certain conditions; and
|
(D)
|
In order to comply with such conditions, the Parties wish to amend certain provisions of the Agreement, all as set forth herein.
|
1.
|
Amendments to the Agreement
|
1.1
|
Article 1.1.51 is hereby deleted it in its entirety and replaced with the following:
|
1.2
|
Article 1.1.104 is hereby deleted it in its entirety and replaced with the following:
|
1.3
|
Article 6.4.1 is hereby amended as follows:
|
(a)
|
in the last line of the first paragraph the words "
at least
" shall be added after the words "
increase the MaxHQ
to
".
|
(b)
|
in the last paragraph the words "
and until the end of the Second Period
" shall be added after the words "
in accordance with this Article 6.4,
".
|
1.4
|
The date in Article 6.4.2(a) shall be April 15, 2013.
|
1.5
|
The following new Article 6.4.15 shall be added after Article 6.4.14:
|
1.6
|
The following new Article 10.1.4A shall be added after Article 10.1.4:
|
AQP
n
=
AQP
n-
1
x
(1 +
AIF
n
)
|
AIF
n
=
|
(
|
CPI
n
-
CPI
n-
1
|
)
|
x
0.3
|
CPI
n-
1
|
1.7
|
Article 6.9.4 is hereby deleted it in its entirety and replaced with the following:
|
2.
|
Satisfaction of Conditions Precedent
|
3.
|
Miscellaneous
|
3.1
|
In this Amendment all the capitalized terms will have the meanings ascribed to them in the Agreement after giving effect to this Amendment.
|
3.2
|
Except as herein amended, all other terms and conditions of the Agreement shall remain in full force and effect.
|
3.3
|
This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so
|
3.4
|
In order to avoid any doubt, the provisions of Article 19 of the Agreement (Governing Law and Dispute Resolution) will apply to this Amendment.
|
THE ISRAEL ELECTRIC
CORPORATION LIMITED
Name: Eli Glickman
Title: President & CEO
/s/ Eli Glickman
Name: Harel Blinde
Title: Senior Vice President & CFO
/s/ Harel Blinde
Name: Yakov Hain
Title: Senior Vice President
/s/ Yakov Hain
|
|
NOBLE ENERGY
MEDITERRANEAN LTD.
Name: Lawson Freeman
Title: Vice President
/s/ Lawson Freeman
|
AVNER OIL EXPLORATION
LIMITED PARTNERSHIP
Avner Oil and Gas Limited, General Partner
Name: Gideon Tadmor
Title: CEO & Director
/s/ Gideon Tadmor
Name: Yossi Guora
Title: CFO
/s/ Yossi Guora
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DELEK DRILLING LIMITED
PARTNERSHIP
Delek Drilling Management (1993) Ltd., General Partner
Name: Gideon Tadmor
Title: Chairman
/s/ Gideon Tadmor
Name: Yossi Abu
Title: CEO
/s/ Yossi Abu
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ISRAMCO NEGEV-2 LIMITED
PARTNERSHIP
Isramco Oil and Gas Ltd., General Partner
Name: Avi Geffen
Title: CEO
/s/ Avi Geffen
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DOR GAS EXPLORATION LIMITED PARTNERSHIP
Alon Gas Exploration Management Ltd., General Partner
Name: Eli Misgav
Title: CEO
/s/ Eli Misgav
Name: Zvi Greenfeld
/s/ Zvi Greenfeld
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1.
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I have reviewed this quarterly report on Form 10-Q of Noble Energy, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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Date:
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October 25, 2012
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/s/ Charles D. Davidson
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Charles D. Davidson
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Noble Energy, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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Date:
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October 25, 2012
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/s/ Kenneth M. Fisher
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Kenneth M. Fisher
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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October 25, 2012
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/s/ Charles D. Davidson
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Charles D. Davidson
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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October 25, 2012
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/s/ Kenneth M. Fisher
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Kenneth M. Fisher
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Chief Financial Officer
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