“We have planned and structured this company to succeed in any market environment.”

David L. Stover—Chairman, President and CEO



(Excludes merger and capital lease obligations)



DJ Basin


Marcellus Shale

Gulf of Mexico

West Africa

Eastern Mediterranean


Message to Shareholders

Dear Fellow Shareholders,

For more than a decade, this company has planned and structured itself to succeed in any market environment. I am proud of what Noble Energy accomplished in 2015. With our diverse portfolio and a focus on areas core to the company, we continue to deliver outstanding results through a challenging commodity environment.

Our teams took action early in 2015, executing a strategy to manage capital within cash flows. This gave us the clarity and confidence to take advantage of opportunities, and it positions us well for the industry turnaround when that occurs.

Noble Energy started the year producing approximately 300 thousand barrels of oil equivalent per day and exited the year producing more than 400 thousand barrels of oil equivalent per day. We delivered this increase through both organic growth and the acquisition of premier assets, while materially reducing capital spending and total cash costs. We ended the year with total capital spend down more than 40 percent from the prior year and below forecast at a little less than $3 billion. Total cash costs were approximately 20 percent lower than 2014 on a per unit equivalent basis.

We created new capital efficiencies, especially in our onshore program, supporting returns and margin improvement in the business. For example, we cut controllable unit costs per barrel to their lowest level in eight years and materially upgraded performance in our core assets. Meanwhile, our offshore program remains a significant differentiator, generating strong cash flows for the business. We maintained our financial strength, exiting the year with $5 billion combined liquidity of cash on hand and available borrowings.

I’m pleased to report our business units delivered these results while setting a company safety record with the lowest recordable incident rate in our history. I don’t believe it is a coincidence that outstanding operational and safety performance occurred in the same year. To me, it is an indication of the health of our business and the commitment of our employees.

In the DJ Basin of Colorado, home to our largest onshore acreage and production, we enhanced value through innovation and efficiency gains, drilling longer laterals in less time, optimizing completion techniques and decreasing our overall average well costs approximately 30 percent year over year. Annual sales volumes averaged a record 115 thousand barrels of oil equivalent per day, with liquids an increasing share of the total volumes. Infrastructure expansion in the basin contributed to new production capacity, especially from our older vertical wells.

In July, we expanded our onshore portfolio with the Rosetta Resources Inc. merger, adding premier assets in Texas’ two most prolific basins: the Permian and Eagle Ford. The merger delivers more than a billion barrels of oil equivalent potential to our portfolio and increased production by approximately 60 thousand barrels of oil equivalent per day. Our technical expertise from other U.S. basins, combined with Rosetta Resources’ knowledge base, began paying off immediately with dramatic drill time reductions and completion improvements. Rosetta Resources’ CEO, Jim Craddock, has joined Noble Energy’s board of directors.

We set new records in the Marcellus with production volumes of more than 460 million cubic feet of natural gas equivalent per day on average for the year. With U.S. gas prices extremely challenged, we decided not to continue drilling and reduced activity. We ended 2015 with zero Marcellus rigs drilling and will focus our 2016 activity on completing a portion of our well inventory at a measured pace.

Offshore, in the Gulf of Mexico, we demonstrated our project execution proficiency by successfully bringing the Big Bend and Dantzler fields on line by the end of 2015 and quickly ramping up to a combined 20 thousand barrels of oil equivalent per day, net. Our Gunflint project is next, with first production targeted for mid-2016. Our exploration, appraisal, and development teams delivered remarkable performance, with these short-cycle, high-quality assets ahead of schedule and on budget. We estimate these successes will substantially increase our Gulf of Mexico production in 2016 and add to our track record of major project delivery.

Offshore West Africa, our operated Aseng and Alen projects continue to perform well, producing 24 thousand barrels of oil equivalent per day, net. A compression project at the non-operated Alba field will be completed in mid-2016 and will help sustain high production levels for that field. A 3D seismic program over our operated areas in Equatorial Guinea is under evaluation and could lead to new exploration opportunities or additional development.

In the Eastern Mediterranean, we created a tremendous amount of momentum during the year. Operationally, completing a compressor project ahead of summer demand, coupled with extraordinary uptime, allowed us to set new records for sales from our Tamar field of more than 250 million cubic feet per day, net for 2015. Gross volumes reached a billion cubic feet per day at times to meet high summer demand in Israel.

On the regulatory front, we were able to work with Israel’s government to establish a natural gas framework to support future developments. It was approved by the Cabinet and supported by the Knesset. This framework establishes the regulatory certainty and stability necessary to proceed with our next phase of project developments. We’ll spend 2016 completing gas sales contracts, securing project financing, and finalizing development scenarios to prepare the projects for final investment decisions.

The Eastern Mediterranean presents an opportunity to match our low-cost, abundant supply of natural gas with large regional demand. With the 10 trillion cubic feet Tamar field already on line, the 22 trillion cubic feet Leviathan field appraised and flow tested, and a discovery offshore Cyprus, we are well positioned to supply gas to the region for many years.

Our future is bright. We enter 2016 bolstered by strong liquidity, a repositioned cost structure, and the ability to manage within cash flow and protect our balance sheet. We are starting the year with a $1.5 billion capital program, which is a 50 percent reduction from last year. At the same time, our strong asset portfolio is expected to deliver approximately 390 thousand barrels of oil equivalent per day, an increase of 10 percent from 2015 reported volumes.

We now have four high-quality onshore core areas: DJ Basin, Eagle Ford, Permian (Delaware Basin), and Marcellus. All are low-cost assets. Coupled with our offshore core areas in West Africa, the Eastern Mediterranean, and the Gulf of Mexico, the company is able to build on a solid foundation with tremendous flexibility.

Our capital efficiency continues to improve dramatically, with contributions on all fronts. The diverse portfolio lets us focus capital on the best returns. New records in performance and optimizing completion results will further drive value improvement.

Our exploration plan is to drill two to three prospects in 2016 while we focus our capabilities on adding high-quality inventory to our portfolio. This environment provides the opportunity for our experienced staff to deepen our inventory at a relatively low cost of entry.

I expect great things in the coming year. We have an experienced leadership team, skilled managers and staff, and superb technical experts throughout our organization. Our core values and our vision of “Energizing the World, Bettering People’s Lives” continue to drive our success.

I thank our shareholders who continue to entrust us with their confidence.


David L. Stover
Chairman, President and CEO