BY SWETHA GOPINATH
Oil and gas producer Noble Energy Inc (NBL.N) posted a surprise quarterly profit and said it would "monetize" assets to cope with a slump in oil prices that is eroding cash flows, sending the company's shares up 8 percent.
A more-than 70 percent fall in oil prices since mid-2014 has prompted oil producers to prune portfolios and use proceeds from asset sales to boost liquidity.
Crude prices, however, rose sharply to above $34 a barrel on Wednesday, on increased hopes of a freeze in production by top producers such as Saudi Arabia and Russia.
Noble, which operates in U.S. shale fields and offshore Gulf of Mexico, Israel and West Africa, said it exited the fourth quarter with $5 billion in liquidity.
" ... Our ability to monetize additional assets, gives us flexibility to adjust in a volatile price environment," Chief Executive David Stover said on a post-earnings call.
The company could look at monetizing its midstream - pipeline, storage and related - assets, or some of its interest in the Tamar gas field off the coast of Israel, an executive said on the call.
Noble has to cut its stake in the field as per a deal with Israel, signed in December, which gives the company and Israel's Delek Group (DLEKG.TA) control of the massive Leviathan natural gas field off the country's coast.
As per the deal, the companies finally have approval to develop the field. But Israel's Supreme Court is yet to decide on the legality of the agreement.
Noble is focusing on firming up gas sale deals with Israel and other regional customers and attracting financing for Leviathan, said Gary Willingham, an executive vice president at the company.
Leviathan, with estimated reserves of 622 billion cubic meters, will cost at least $6 billion to develop.
Noble posted a net loss of $2.03 billion for the fourth quarter ended Dec. 31, due to $2.2 billion of charges.
Excluding the charges, profit was 44 cents per share, beating analysts' expectation of a loss of 4 cents per share, driven by a drop in operating costs and better-than-estimated production.
Total sales volumes of 422,000 barrels of oil equivalent per day (boe/d) exceeded production by about 5,000 barrels per day. Analysts had expected 404,000 boe/d.
However, Noble said it expected sales volumes to decline to 395,000-405,000 boe/d in the first quarter due to downtime at its Alba field compression project offshore Equatorial Guinea.
(Reporting by Swetha Gopinath in Bengaluru; Editing by Ted Kerr and Saumyadeb Chakrabarty)
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