UPDATE 2-Noble Energy to take second-quarter trading losses

(Adds share price, background, analyst comment)

NEW YORK, July 15 (Reuters) - Noble Energy Inc (NBL.N), an independent oil and gas producer, said on Tuesday that losses in its trading book cost $246 million in cash during the second quarter, when oil prices soared to record highs.

The company said in a filing with the U.S. Securities and Exchange Commission that it expects to post an $828 million pretax loss in the mark-to-market value of its crude oil and natural gas derivatives.

Of that $828 million, $716 million was unrealized, representing the drop in the value of trades that were still outstanding.

Noble, like many energy producers, uses the derivatives market to hedge, or lock in, the prices of the oil and natural gas it produces in advance to reduce volatility caused by swings in the market.

In a note to clients on exploration and production companies, Raymond James said on Monday "non-cash mark to market losses are likely to be relatively large this quarter based on the rapid rise in futures prices for both oil and gas." It added those charges should not be taken into account by investors when considering operating earnings.

But many of the hedges were put in place three or four years ago, when prices for crude oil were between one quarter and one half the $140-per-barrel level that U.S. futures reached during the second quarter.

Since then, U.S. crude oil prices have extended their rally above $147 per barrel on the New York Mercantile Exchange before falling near $136 per barrel in Tuesday trading.

Still outstanding are Noble's trading contracts that come due in the third quarter and lock in crude oil prices at as low as $38.11 per barrel, although the company holds other contracts ranging up to $88 per barrel.

Shares of Noble were down $2.62, or 2.9 percent to $87.83 on the New York Stock Exchange near midday. That compares with a more than 3 percent decline in the American Stock Exchange index of natural gas companies .XNG. Most energy shares were lower on Tuesday, following the sharp drop in crude oil futures. (Reporting by Matt Daily, additional reporting by Anna Driver in Houston; editing by Gerald E. McCormick and Lisa Von Ahn)