Intrinsic value of Noble Energy - NBL

Previous Close

$28.77

  Intrinsic Value

$4.60

stock screener

  Rating & Target

str. sell

-84%

Previous close

$28.77

 
Intrinsic value

$4.60

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of NBL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 13.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  21.90
  20.21
  18.69
  17.32
  16.09
  14.98
  13.98
  13.08
  12.27
  11.55
  10.89
  10.30
  9.77
  9.30
  8.87
  8.48
  8.13
  7.82
  7.54
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
  6.21
  6.09
  5.98
  5.88
  5.80
Revenue, $m
  5,188
  6,237
  7,402
  8,684
  10,081
  11,591
  13,212
  14,941
  16,775
  18,712
  20,750
  22,888
  25,125
  27,460
  29,895
  32,430
  35,067
  37,808
  40,658
  43,619
  46,696
  49,894
  53,219
  56,678
  60,275
  64,021
  67,921
  71,984
  76,220
  80,638
Variable operating expenses, $m
  7,203
  8,633
  10,222
  11,969
  13,874
  15,933
  18,142
  20,498
  22,998
  25,639
  28,286
  31,201
  34,250
  37,434
  40,753
  44,209
  47,804
  51,541
  55,426
  59,462
  63,657
  68,017
  72,550
  77,264
  82,169
  87,274
  92,591
  98,130
  103,905
  109,927
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  7,203
  8,633
  10,222
  11,969
  13,874
  15,933
  18,142
  20,498
  22,998
  25,639
  28,286
  31,201
  34,250
  37,434
  40,753
  44,209
  47,804
  51,541
  55,426
  59,462
  63,657
  68,017
  72,550
  77,264
  82,169
  87,274
  92,591
  98,130
  103,905
  109,927
Operating income, $m
  -2,015
  -2,396
  -2,820
  -3,285
  -3,793
  -4,341
  -4,930
  -5,558
  -6,224
  -6,927
  -7,537
  -8,313
  -9,126
  -9,974
  -10,858
  -11,779
  -12,737
  -13,733
  -14,768
  -15,843
  -16,961
  -18,123
  -19,330
  -20,586
  -21,893
  -23,254
  -24,670
  -26,146
  -27,685
  -29,289
EBITDA, $m
  393
  472
  560
  657
  763
  877
  1,000
  1,131
  1,269
  1,416
  1,570
  1,732
  1,901
  2,078
  2,262
  2,454
  2,654
  2,861
  3,077
  3,301
  3,534
  3,776
  4,028
  4,289
  4,562
  4,845
  5,140
  5,448
  5,768
  6,103
Interest expense (income), $m
  327
  364
  501
  654
  825
  1,013
  1,218
  1,439
  1,676
  1,929
  2,198
  2,482
  2,780
  3,093
  3,421
  3,763
  4,119
  4,491
  4,877
  5,278
  5,696
  6,129
  6,580
  7,048
  7,535
  8,042
  8,569
  9,117
  9,688
  10,284
  10,904
Earnings before tax, $m
  -2,380
  -2,897
  -3,474
  -4,110
  -4,806
  -5,559
  -6,369
  -7,234
  -8,153
  -9,125
  -10,018
  -11,093
  -12,219
  -13,395
  -14,621
  -15,898
  -17,228
  -18,610
  -20,046
  -21,539
  -23,090
  -24,703
  -26,379
  -28,122
  -29,935
  -31,822
  -33,787
  -35,834
  -37,968
  -40,193
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -2,380
  -2,897
  -3,474
  -4,110
  -4,806
  -5,559
  -6,369
  -7,234
  -8,153
  -9,125
  -10,018
  -11,093
  -12,219
  -13,395
  -14,621
  -15,898
  -17,228
  -18,610
  -20,046
  -21,539
  -23,090
  -24,703
  -26,379
  -28,122
  -29,935
  -31,822
  -33,787
  -35,834
  -37,968
  -40,193

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  26,202
  31,498
  37,384
  43,859
  50,916
  58,542
  66,727
  75,458
  84,720
  94,503
  104,797
  115,594
  126,891
  138,687
  150,983
  163,786
  177,104
  190,951
  205,342
  220,297
  235,839
  251,992
  268,785
  286,250
  304,421
  323,336
  343,033
  363,556
  384,949
  407,261
Adjusted assets (=assets-cash), $m
  26,202
  31,498
  37,384
  43,859
  50,916
  58,542
  66,727
  75,458
  84,720
  94,503
  104,797
  115,594
  126,891
  138,687
  150,983
  163,786
  177,104
  190,951
  205,342
  220,297
  235,839
  251,992
  268,785
  286,250
  304,421
  323,336
  343,033
  363,556
  384,949
  407,261
Revenue / Adjusted assets
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
Average production assets, $m
  22,770
  27,372
  32,488
  38,115
  44,247
  50,875
  57,988
  65,574
  73,623
  82,125
  91,071
  100,454
  110,271
  120,522
  131,208
  142,334
  153,908
  165,941
  178,447
  191,443
  204,949
  218,986
  233,580
  248,758
  264,549
  280,986
  298,103
  315,938
  334,529
  353,919
Working capital, $m
  -1,416
  -1,703
  -2,021
  -2,371
  -2,752
  -3,164
  -3,607
  -4,079
  -4,579
  -5,108
  -5,665
  -6,248
  -6,859
  -7,497
  -8,161
  -8,853
  -9,573
  -10,322
  -11,100
  -11,908
  -12,748
  -13,621
  -14,529
  -15,473
  -16,455
  -17,478
  -18,542
  -19,652
  -20,808
  -22,014
Total debt, $m
  9,277
  12,120
  15,281
  18,759
  22,548
  26,643
  31,039
  35,727
  40,701
  45,954
  51,482
  57,280
  63,347
  69,681
  76,284
  83,159
  90,311
  97,747
  105,475
  113,506
  121,851
  130,525
  139,544
  148,922
  158,680
  168,837
  179,415
  190,436
  201,924
  213,905
Total liabilities, $m
  14,071
  16,914
  20,075
  23,553
  27,342
  31,437
  35,833
  40,521
  45,495
  50,748
  56,276
  62,074
  68,141
  74,475
  81,078
  87,953
  95,105
  102,541
  110,269
  118,300
  126,645
  135,319
  144,338
  153,716
  163,474
  173,631
  184,209
  195,230
  206,718
  218,699
Total equity, $m
  12,132
  14,583
  17,309
  20,307
  23,574
  27,105
  30,895
  34,937
  39,225
  43,755
  48,521
  53,520
  58,751
  64,212
  69,905
  75,833
  81,999
  88,410
  95,074
  101,998
  109,193
  116,672
  124,447
  132,534
  140,947
  149,705
  158,824
  168,326
  178,232
  188,562
Total liabilities and equity, $m
  26,203
  31,497
  37,384
  43,860
  50,916
  58,542
  66,728
  75,458
  84,720
  94,503
  104,797
  115,594
  126,892
  138,687
  150,983
  163,786
  177,104
  190,951
  205,343
  220,298
  235,838
  251,991
  268,785
  286,250
  304,421
  323,336
  343,033
  363,556
  384,950
  407,261
Debt-to-equity ratio
  0.760
  0.830
  0.880
  0.920
  0.960
  0.980
  1.000
  1.020
  1.040
  1.050
  1.060
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
  1.130
Adjusted equity ratio
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,380
  -2,897
  -3,474
  -4,110
  -4,806
  -5,559
  -6,369
  -7,234
  -8,153
  -9,125
  -10,018
  -11,093
  -12,219
  -13,395
  -14,621
  -15,898
  -17,228
  -18,610
  -20,046
  -21,539
  -23,090
  -24,703
  -26,379
  -28,122
  -29,935
  -31,822
  -33,787
  -35,834
  -37,968
  -40,193
Depreciation, amort., depletion, $m
  2,408
  2,868
  3,380
  3,942
  4,556
  5,218
  5,930
  6,688
  7,493
  8,344
  9,107
  10,045
  11,027
  12,052
  13,121
  14,233
  15,391
  16,594
  17,845
  19,144
  20,495
  21,899
  23,358
  24,876
  26,455
  28,099
  29,810
  31,594
  33,453
  35,392
Funds from operations, $m
  28
  -29
  -94
  -168
  -250
  -340
  -439
  -545
  -660
  -782
  -911
  -1,048
  -1,192
  -1,343
  -1,500
  -1,665
  -1,837
  -2,015
  -2,201
  -2,395
  -2,595
  -2,804
  -3,021
  -3,246
  -3,480
  -3,724
  -3,977
  -4,241
  -4,515
  -4,801
Change in working capital, $m
  -254
  -286
  -318
  -350
  -381
  -412
  -442
  -472
  -501
  -529
  -556
  -584
  -611
  -638
  -665
  -692
  -720
  -748
  -778
  -808
  -840
  -873
  -908
  -944
  -982
  -1,022
  -1,065
  -1,109
  -1,156
  -1,206
Cash from operations, $m
  283
  257
  224
  182
  131
  72
  4
  -73
  -159
  -253
  -355
  -464
  -581
  -705
  -836
  -973
  -1,117
  -1,267
  -1,423
  -1,586
  -1,755
  -1,931
  -2,113
  -2,302
  -2,498
  -2,701
  -2,912
  -3,131
  -3,359
  -3,595
Maintenance CAPEX, $m
  -1,868
  -2,277
  -2,737
  -3,249
  -3,811
  -4,425
  -5,087
  -5,799
  -6,557
  -7,362
  -8,213
  -9,107
  -10,045
  -11,027
  -12,052
  -13,121
  -14,233
  -15,391
  -16,594
  -17,845
  -19,144
  -20,495
  -21,899
  -23,358
  -24,876
  -26,455
  -28,099
  -29,810
  -31,594
  -33,453
New CAPEX, $m
  -4,090
  -4,602
  -5,116
  -5,627
  -6,132
  -6,628
  -7,113
  -7,587
  -8,049
  -8,502
  -8,946
  -9,383
  -9,817
  -10,251
  -10,686
  -11,126
  -11,574
  -12,033
  -12,506
  -12,996
  -13,506
  -14,037
  -14,594
  -15,178
  -15,791
  -16,437
  -17,117
  -17,835
  -18,591
  -19,389
Cash from investing activities, $m
  -5,958
  -6,879
  -7,853
  -8,876
  -9,943
  -11,053
  -12,200
  -13,386
  -14,606
  -15,864
  -17,159
  -18,490
  -19,862
  -21,278
  -22,738
  -24,247
  -25,807
  -27,424
  -29,100
  -30,841
  -32,650
  -34,532
  -36,493
  -38,536
  -40,667
  -42,892
  -45,216
  -47,645
  -50,185
  -52,842
Free cash flow, $m
  -5,676
  -6,622
  -7,629
  -8,694
  -9,812
  -10,981
  -12,197
  -13,459
  -14,766
  -16,117
  -17,513
  -18,955
  -20,444
  -21,983
  -23,574
  -25,220
  -26,924
  -28,691
  -30,524
  -32,427
  -34,405
  -36,463
  -38,605
  -40,838
  -43,165
  -45,593
  -48,128
  -50,776
  -53,544
  -56,437
Issuance/(repayment) of debt, $m
  2,531
  2,844
  3,161
  3,477
  3,789
  4,096
  4,395
  4,688
  4,974
  5,253
  5,528
  5,798
  6,067
  6,334
  6,603
  6,875
  7,152
  7,436
  7,728
  8,031
  8,346
  8,674
  9,018
  9,379
  9,758
  10,157
  10,577
  11,021
  11,488
  11,981
Issuance/(repurchase) of shares, $m
  4,575
  5,349
  6,200
  7,108
  8,073
  9,090
  10,158
  11,276
  12,442
  13,655
  14,784
  16,093
  17,449
  18,856
  20,314
  21,826
  23,394
  25,021
  26,709
  28,463
  30,286
  32,181
  34,154
  36,208
  38,348
  40,580
  42,907
  45,337
  47,873
  50,523
Cash from financing (excl. dividends), $m  
  7,106
  8,193
  9,361
  10,585
  11,862
  13,186
  14,553
  15,964
  17,416
  18,908
  20,312
  21,891
  23,516
  25,190
  26,917
  28,701
  30,546
  32,457
  34,437
  36,494
  38,632
  40,855
  43,172
  45,587
  48,106
  50,737
  53,484
  56,358
  59,361
  62,504
Total cash flow (excl. dividends), $m
  1,430
  1,571
  1,732
  1,892
  2,050
  2,205
  2,357
  2,505
  2,650
  2,791
  2,799
  2,936
  3,072
  3,208
  3,344
  3,481
  3,622
  3,765
  3,913
  4,067
  4,226
  4,393
  4,567
  4,749
  4,941
  5,143
  5,356
  5,581
  5,818
  6,067
Retained Cash Flow (-), $m
  -4,575
  -5,349
  -6,200
  -7,108
  -8,073
  -9,090
  -10,158
  -11,276
  -12,442
  -13,655
  -14,784
  -16,093
  -17,449
  -18,856
  -20,314
  -21,826
  -23,394
  -25,021
  -26,709
  -28,463
  -30,286
  -32,181
  -34,154
  -36,208
  -38,348
  -40,580
  -42,907
  -45,337
  -47,873
  -50,523
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  102
  125
  150
  178
  208
  242
  278
  317
  359
  403
  449
  498
  549
  603
  659
  717
  778
  842
  907
  976
  1,047
  1,121
  1,197
  1,277
  1,360
  1,447
  1,536
  1,630
  1,728
  1,829
Cash available for distribution, $m
  -3,145
  -3,778
  -4,468
  -5,217
  -6,023
  -6,885
  -7,801
  -8,771
  -9,792
  -10,863
  -11,985
  -13,156
  -14,377
  -15,648
  -16,971
  -18,345
  -19,772
  -21,255
  -22,796
  -24,396
  -26,060
  -27,789
  -29,587
  -31,459
  -33,407
  -35,436
  -37,551
  -39,756
  -42,056
  -44,456
Discount rate, %
  5.40
  5.67
  5.95
  6.25
  6.56
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.04
  15.80
  16.59
  17.42
  18.29
  19.20
  20.16
  21.17
  22.23
PV of cash for distribution, $m
  -2,984
  -3,383
  -3,756
  -4,093
  -4,383
  -4,616
  -4,784
  -4,882
  -4,907
  -4,859
  -4,741
  -4,558
  -4,316
  -4,026
  -3,698
  -3,343
  -2,974
  -2,602
  -2,237
  -1,889
  -1,566
  -1,273
  -1,014
  -791
  -604
  -450
  -327
  -232
  -161
  -108
Current shareholders' claim on cash, %
  74.7
  56.4
  42.9
  33.0
  25.5
  19.9
  15.6
  12.3
  9.7
  7.7
  6.2
  5.0
  4.0
  3.2
  2.6
  2.1
  1.7
  1.4
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1

Noble Energy, Inc. is an independent energy company. The Company is engaged in crude oil, natural gas and natural gas and natural gas liquids (NGLs) exploration, development, production and acquisition. The Company's segments include: United States, including the onshore DJ Basin, Permian Basin, Eagle Ford Shale, Marcellus Shale and offshore deepwater Gulf of Mexico, as well as the consolidated accounts of Noble Midstream Partners LP (Noble Midstream Partners); Eastern Mediterranean, including offshore Israel and Cyprus; West Africa, including offshore Equatorial Guinea, Cameroon and Gabon, and Other International and Corporate, including new ventures, such as offshore the Falkland Islands, Suriname and Newfoundland. The Company's portfolio of assets is diversified through the United States and international projects and production mix among crude oil, natural gas and NGLs. Its business focuses on both the United States unconventional basins and certain global conventional basins.

FINANCIAL RATIOS  of  Noble Energy (NBL)

Valuation Ratios
P/E Ratio -12.4
Price to Sales 3.5
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow -65.2
Growth Rates
Sales Growth Rate 9.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -48.3%
Cap. Spend. - 3 Yr. Gr. Rate -17.1%
Financial Strength
Quick Ratio 19
Current Ratio 0
LT Debt to Equity 75.5%
Total Debt to Equity 76.2%
Interest Coverage -4
Management Effectiveness
Return On Assets -3.6%
Ret/ On Assets - 3 Yr. Avg. -2.1%
Return On Total Capital -5.7%
Ret/ On T. Cap. - 3 Yr. Avg. -3.9%
Return On Equity -10.2%
Return On Equity - 3 Yr. Avg. -7.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 86.7%
Gross Margin - 3 Yr. Avg. 91.5%
EBITDA Margin 28.9%
EBITDA Margin - 3 Yr. Avg. 35.3%
Operating Margin -37.1%
Oper. Margin - 3 Yr. Avg. -32.3%
Pre-Tax Margin -50.8%
Pre-Tax Margin - 3 Yr. Avg. -29%
Net Profit Margin -28.6%
Net Profit Margin - 3 Yr. Avg. -27.2%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 21.1%
Payout Ratio -17.2%

NBL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NBL stock intrinsic value calculation we used $4256 million for the last fiscal year's total revenue generated by Noble Energy. The default revenue input number comes from 2017 income statement of Noble Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NBL stock valuation model: a) initial revenue growth rate of 21.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.4%, whose default value for NBL is calculated based on our internal credit rating of Noble Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Noble Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NBL stock the variable cost ratio is equal to 139.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NBL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Noble Energy.

Corporate tax rate of 27% is the nominal tax rate for Noble Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NBL stock is equal to 2.4%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NBL are equal to 438.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Noble Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NBL is equal to -27.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9936 million for Noble Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 469 million for Noble Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Noble Energy at the current share price and the inputted number of shares is $13.5 billion.

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COMPANY NEWS

▶ Noble Energy to Present at Upcoming Energy Conference   [Aug-20-18 04:15PM  GlobeNewswire]
▶ Noble Energy shifts drilling focus to Colorado over the Permian Basin   [Aug-16-18 04:55PM  American City Business Journals]
▶ Shale Profits Remain Elusive   [Aug-14-18 06:00PM  Oilprice.com]
▶ Colorado oil and gas stocks hit hard by anti-fracking ballot initiative news   [Aug-10-18 04:48PM  American City Business Journals]
▶ As Iran Sanctions Kick In, Look to US Oil Export Markets   [Aug-08-18 12:38PM  TheStreet.com]
▶ Take-Two and Kraft Heinz jump while Symantec slips   [Aug-03-18 04:54PM  Associated Press]
▶ Noble: 2Q Earnings Snapshot   [06:51AM  Associated Press]
▶ Earnings Preview: Noble Energy   [03:07PM  Benzinga]
▶ SA company adds partner on Permian-to-Corpus pipeline   [Jul-27-18 03:25PM  American City Business Journals]
▶ 7 Oil Stocks That Can Gush Big Returns   [12:35PM  Investopedia]
▶ Noble Energy Declares Quarterly Dividend   [Jul-24-18 10:57AM  GlobeNewswire]
▶ Drilling Permit Roundup: Live Oak County emerging as new hot spot   [08:15AM  American City Business Journals]
▶ Energy Earnings: 8 Stocks to Buy Now   [Jul-18-18 02:36PM  Barrons.com]
▶ Bank of America and Arconic climb while Noble Energy skids   [Jul-16-18 04:52PM  Associated Press]
▶ 1 Elite Oil Stock You're Probably Overlooking   [Jul-14-18 11:18AM  Motley Fool]
▶ Noble Energy Is Ready for a Rally Above Its 2016 Zenith   [Jun-28-18 01:20PM  TheStreet.com]
▶ How Important Are Egypts Gas Discoveries?   [01:00PM  Oilprice.com]
▶ Why Oil Stocks Could Have Much Further to Run   [Jun-17-18 06:34AM  Motley Fool]
▶ Noble Energy hires general counsel from BHP   [May-24-18 12:57PM  American City Business Journals]
▶ Anadarko reaches settlement with families of men killed in Firestone home explosion   [May-23-18 05:02PM  American City Business Journals]
▶ 3 Energy Stocks Poised for Big Breakouts   [06:00AM  Investopedia]
▶ MARKETS: $80 Brent crude oil isn't phasing S&P 500 bullsyet   [May-17-18 10:15AM  Yahoo Finance Video]
▶ U.S. Shale Oil Production Rises At Record-Breaking Rate   [May-15-18 12:00PM  Oilprice.com]
▶ [$$] EPIC Secures Partnerships for Crude-Oil Pipeline   [May-11-18 12:21PM  The Wall Street Journal]
▶ 9 Energy Stocks With 15% Upside: Goldman   [May-04-18 08:00AM  Investopedia]
▶ Texas Sees Unparalleled Economic Boom From Oil Prices   [May-02-18 07:00PM  Oilprice.com]
▶ Viper Energy, Anadarko, Concho Resources Beat Late After Noble Energy Tops   [May-01-18 04:31PM  Investor's Business Daily]
▶ Noble: 1Q Earnings Snapshot   [07:20AM  Associated Press]
▶ 6 Oil Stocks Offer Buy Points As Earnings Come Due   [Apr-27-18 05:27PM  Investor's Business Daily]
▶ Noble Energy Announces Increase to Its Quarterly Dividend   [Apr-23-18 04:15PM  GlobeNewswire]
▶ 9 Stock Picks for Outsized Gains: Goldman   [08:00AM  Investopedia]
▶ Commodities Surge as Energy Stocks Lead Market Higher   [Apr-18-18 12:45PM  TheStreet.com]
▶ Drilling Permit Roundup: Verdun Oil Company brings WWI history to Eagle Ford   [Apr-03-18 07:46AM  American City Business Journals]
▶ [$$] Judge Approves Fieldwood Energy Chapter 11 Plan   [Apr-02-18 04:00PM  The Wall Street Journal]
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