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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (46447)	10/20/2005 6:12:25 PM
From: Dennis Roth	Respond to of 206316

Noble Corp. (IL/A): First Take - 3Q results in-line - Goldman Sachs - October 20, 2005 NE 3Q2005 EPS of $0.55 included $0.13-0.15 of hurricane impact vs $0.07 included in our $0.64 estimate, with consensus of $0.61 including a variety of assumptions. Bottom line, we view results as basically in line. Demand continues to outstrip supply in all offshore drilling rig markets globally and we believe investors should use the recent pull-back in oil service stocks on fears of oil demand destruction (which Goldman Sachs analyst Arjun Murti views as somewhere between premature and over-done) to add to positions. We still see solid upside to consensus EPS for NE in 2006 of $5.33 (GS=$5.76) and our $88 fair value implies 44% upside potential. We maintain our IL/A rating on NE as we see more upside in Outperform-rated RIG, DO, SLB, BHI and SII. We maintain our Attractive coverage view. Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Jason Gilbert; Terry Darling.

To: Dennis Roth who wrote (46447)	11/5/2005 6:05:47 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 206316

Noble Energy (NBL) (IL/A): Exploratory drilling in Rockies and Equatorial Guinea key to narrowing discount - Goldman Sachs - November 04, 2005 We expect about 12% annual organic production growth in 2006-08 from Noble Energy, led by acquired Patina Oil and Gas properties and new project startups in the Gulf of Mexico. Further exploratory drilling in the Rockies and recent success in Equatorial Guinea Block O could also provide meaningful upside to Noble over time, though we do not see many near-term catalysts. Noble currently trades at 4.0x 2006 EV/DACF (EV/debt-adjusted cash flow), relative to other conventional E&Ps at 4.3x, and conventional E&Ps generally continue to trade at a discount to those with more visible long-term growth. Among conventional E&Ps, we continue to prefer Newfield Exploration (OP/A) due to more impactful near-term catalysts and a greater rate of change in growth visibility. We rate Noble In-Line relative to an Attractive coverage view. KEY COMPANY-SPECIFIC CATALYSTS (1) Drilling activity at Patina assets. The acquisition of Patina has allowed Noble to add low-risk, long-lived wells to its inventory and improve the visibility of growth in its US portfolio. As a result, Noble's reserve to production ratio has increased to about 14 years, above other conventional E&Ps of 11.5 years. We believe investors will be looking at the execution of Patina now that the deal has closed and would note that production has risen slightly since the deal closed. Noble has added a rig in the Wattenberg field, and we continue to assume 10% production growth from Patina assets through 2010, assuming an annual budget of $300-$400 million. Key onshore areas to watch aside from Wattenberg include the Buffalo Wallow area (also a catalyst for Forest Oil), the Niobrara and a small position in the Piceance Basin. (2) Timing and success of deepwater Gulf of Mexico project startups. We see significant growth from the Gulf of Mexico over the next few years due to several potential startups. The Swordfish development (60% working interest), although slightly delayed due to the hurricanes, came online in October and initially produced 10 MBOE/d. The Lorien prospect (60% working interest) is expected to come online in mid-2006 with an initial net production of 12 MBOE/d, and Ticonderoga (50% working interested) is expected to startup in 2H-2006 with an initial net production of 10-12 MBOE/d. The company saw a large exploration charge in 3Q 2005 from three Gulf of Mexico dry holes -- Little Burn, Conquest and Cadillac. We believe the acquisition of Patina has increased Noble's appetite for higher-risk exploration, with the company now looking at two 50-100 million BOE prospects (gross, with a 50% working interest expected) to be drilled next year. We believe Noble may experience fewer rig constraints relative to other deepwater players because of recent contract extensions well into 2006. (3) International prospects. In addition to Phase 2A and 2B that have already spud, the successful discovery in Block O in Equatorial Guinea (in which Noble has a 45% working interest) could be a near-term catalyst. We believe investors will be focusing on the extent of additional delineation/appraisal to determine the extent of the prospect's commerciality. Development would likely take place in 2009 or 2010, and would extend condensate and natural gas production (the former of which is more valuable). The company plans to explore Block I in Equatorial Guinea in 2006. Outside of Equatorial Guinea, Israel's natural gas demand is expected to increase as new infrastructure is built in the country over the next several years, and we believe the potential for increased reserves are not fully reflected in the stock. REPORTED EPS LOWER THAN OUR AND CONSENSUS ESTIMATES Noble reported 3Q 2005 EPS of $0.99, lower than our estimate of $1.11 and the First Call consensus estimate of $1.18. The biggest difference between our estimate and actual results stemmed from a larger-than-expected exploration expense of $5.31 per BOE versus our $2.91 per BOE. Production was in-line at 168.7 MBOE/d while realized gas prices were slightly lower than expected at $5.42 per Mcf versus our $6.06 per Mcf. Noble's operating cash flow was $426 million versus our expectation of $437 million. UPDATING ESTIMATES To reflect a favorable change in production, costs and other minor company adjustments, we are updating our 4Q and full-year 2005 EPS estimates to $1.39 ($1.33 previously) and $4.21 ($4.26 previously) respectively. Our 2006 and 2007 EPS estimates are now $6.38 ($6.28 previously) and $7.64 ($7.50 previously) respectively. Our 2008-2010 (normalized) estimates are $3.13 ($3.08 previously), $3.13 ($3.08 previously), and $3.45 ($3.40 previously) respectively. Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Brian Singer, Arjun Murti.