UPDATE 2-Noble Energy Q1 profit easily beats expectations

Thu Apr 24, 2014 12:38pm EDT

(Adds Mediterranean gas sales and analyst commentary)

April 24 (Reuters) - Oil and natural gas producer Noble Energy Inc posted a better-than-expected quarterly profit on Thursday, helped by a jump in production across its U.S. shale plays.

Houston-based Noble, which has shale oil and gas properties in places like the Marcellus in Pennsylvania and the DJ Basin in Colorado, is also developing giant natural gas fields in the eastern Mediterranean.

Conflict between Russia and Ukraine has stirred interest in gas from Noble's gas fields off the shore of Israel, but regional demand for the fuel from countries including Egypt and Jordan is also very strong, Noble Chief Executive Officer Chuck Davidson told analysts on a conference call.

"There's certainly a lot of work to be done in terms of possible European markets," said Davidson. "Yes there's interest there, but we've also got tremendous interest from our customers in the (Middle East) region."

The company recorded net income of $200 million, or 55 cents per share, in the first quarter, compared with $261 million, or 72 cents per share, in the year-ago quarter.

Excluding one-time items such as an income tax bill that more than doubled to $43 million and losses on hedging for oil and natural gas prices, Noble posted profit of 82 cents per share. By that measure, analysts expected 75 cents, according to Thomson Reuters I/B/E/S.

Analyst Tim Rezvan at Sterne Agee said the prices Noble received for its domestic crude oil came in 4 percent above his expectations.

Quarterly production rose to 286,000 barrels of oil equivalent per day (boed) from 246,000 boed in the same period last year. U.S. production alone rose 12 percent to 163,000 boed.

For the second quarter, Noble expects to produce 290,000 to 296,000 barrels of oil equivalent per day.

Noble has been trying for weeks to finalize an agreement for Australia's Woodside Petroleum worth $2.55 billion in cash and future revenue in exchange for a 25 percent stake in a massive Israeli natural gas project.

Woodside nearly agreed to the deal late last month before postponing the signing ceremony. Noble gave no update in its earnings statement on when it expects the deal to be finalized.

Noble needs Woodside's experience in liquefied natural gas projects to help regional exports begin sooner, but last month Woodside delayed the signing, citing concerns about the Israeli government's plans for taxing export volumes.

When asked about the status of talks on taxation, Davidson said: "I hear encouraging things but I'll leave it to Woodside to report on their tax issues."

Davidson, who has been closely involved in negotiations with Woodside, said last week he would retire in 2015. The company plans to replace him with David Stover, the current chief operating officer.

Shares of Noble Energy rose more than 1 percent, or 89 cents, to $75.96 in late morning New York Stock Exchange trading. The stock is up 10 percent for the year, about the same as the SIG Oil Exploration and Production Index (Reporting by Ernest Scheyder in New York and Anna Driver in Houston; Editing by Jeffrey Benkoe and Chizu Nomiyama)

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