Noble Energy reported the results included reductions to net income for certain asset impairments and an unrealized mark-to-market change in the company’s financial hedges totaling $291 million after-tax. Excluding these items, which are typically not considered by analysts in published estimates, first quarter 2009 adjusted net income was $103 million, or $0.59 per share diluted. Adjusted net income for the first quarter 2008 was $364 million, or $2.05 per share diluted.

Discretionary cash flow for the first quarter 2009 was $339 million, compared to $617 million in the previous year. Net cash provided by operating activities was $185 million versus $506 million in the first quarter last year. Capital expenditures for the first quarter 2009 were $386 million.

Key accomplishments for the first quarter 2009 include:

— Exploration success offshore Israel at Tamar, Noble Energy’s largest discovery to date

— Additional natural gas discovery offshore Israel at Dalit

— First oil discovery on block ‘O’ offshore Equatorial Guinea at the Carmen prospect

— Successful high bidder on 24 deepwater blocks in Central Gulf of Mexico lease sale 208

— Deepwater Gulf of Mexico discovery at Santa Cruz

— Issuance of $1 billion in 10-year senior unsecured notes

— Credit rating upgrade to BBB, outlook stable by Standard & Poor’s

In this current commodity and economic environment, our focus remains on positioning Noble Energy for the future. Results from the first quarter certainly moved us further toward that goal. On the exploration front, our programs continued to capture significant resources, with discoveries in three of our core long-term growth areas: Israel, West Africa, and the deepwater Gulf of Mexico. Financially, improving capital markets and our strong credit rating helped us increase our balance sheet capacity to support those developments. The remainder of the year will be active for us, with key milestones including the sanctioning of our Benita oil project in Equatorial Guinea, appraising our Tamar discovery offshore Israel, while continuing with our high-impact exploration program in the deepwater Gulf of Mexico, said Noble Energy’s chairman and chief executive officer, Charles D. Davidson.

Total sales volumes averaged 210 thousand barrels of oil equivalent per day (MBoe/d) for the quarter, down 5% from the same period in previous year. The timing of liftings in the North Sea and West Africa caused sales to be lower than production by over three MBoe/d in the first quarter 2009.

Total international volumes were down 5% against the year-ago quarter after adjusting for the Argentina asset sale, which was concluded early last year. The main reasons for the decline were lower natural gas sales in Israel from power plant downtime and milder weather conditions, as well as less oil production in the North Sea due to anticipated decline in the original development phase at Dumbarton.

US volumes were decreased 4% largely due to continuing hurricane shut-ins impacting our deepwater Gulf of Mexico operations. Offsetting these declines, onshore volumes were up mainly related to successful drilling programs in the Northern region.

First quarter 2009 commodity price realizations were $37.81 per barrel of crude oil and condensate and $2.64 per thousand cubic feet of natural gas, both down more than 50% from the year-ago quarter. Pre-tax, deferred commodity hedge losses of $16.5 million for crude oil and $0.5 million for natural gas negatively impacted realized prices for the first quarter 2009.

Total cash costs, including lease operating, production and ad valorem taxes, transportation, SG&A, and interest expenses were $10.95 per barrel of oil equivalent (Boe) for the quarter, down slightly against the similar period previous year. Lower production taxes offset higher lease operating expenses (LOE). Depreciation, depletion, and amortization (DD&A) was $10.58 per Boe. Higher LOE and DD&A unit rates were affected by the change in the company’s mix of production. DD&A rates were also impacted by negative reserve revisions related to lower year-end 2008 commodity prices. Other operating expenses comprised the recovery of certain earlier recorded allowance for doubtful accounts related to Ecuador power operations.

Outlook:

Noble Energy continues to constrain investments in US natural gas developments. As a result, total capital expenditures for the year are being managed at about $1.4 billion, which represents the lower end of the company’s original capital guidance.

Second quarter 2009 volumes are now anticipated to range from 204 to 212 MBoe/d. The adjusted guidance assumes lower volumes in the North Sea and Israel, as well as in the deepwater Gulf of Mexico related to further hurricane delays impacting Ticonderoga. Other updated guidance metrics include the following:

— Exploration expense has been lowered to range from $170 million to $210 million mainly as a result of successful exploration drilling

— Interest expense has been raised to range from $85 million to $105 million due to the company’s bond issuance

— Equity method investments margin has been declined to range from $50 million to $70 million resulting mainly from lower commodity prices.