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Noble Energy increases proved reserves 37% to total nearly 2 billion boe

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Oilfield Technology,

Noble Energy, Inc. announced total proved reserves of 1.965 billion boe as of December 31, 2017, a net increase of 528 million boe versus year-end 2016.  Organic reserve additions, comprised of extensions, discoveries and performance and price revisions, totaled 871 million boe and were added at a cost of approximately US$2.90/boe. These additions represent approximately 6.3 times 2017 production.  The value of future after-tax net cash flows from the Company's proved reserves, according to U.S. Securities and Exchange Commission price guidelines and discounted at 10%, increased to more than US$11 billion, up nearly 100% from 2016.

Gary W. Willingham, Noble Energy's Executive Vice President, Operations, commented, "We had an exceptionally strong year for reserves growth in 2017 with an organic replacement ratio* of approximately 625% and extremely low finding and development costs.  Sanctioning and commencing development of the Leviathan project was a major accomplishment in 2017. Our reserve bookings reflect positive performance improvements in all three U.S. onshore business units.  Our reserve life has increased to more than 10 years in the onshore business and to over 14 years for the total company, providing a strong visibility of long-term value growth."

The composition of reserves was approximately 35% liquids, 50% international natural gas and 15% U.S. natural gas.  Proved developed reserves totaled 868 million boe, an increase of nearly 15% from the end of 2016, excluding Marcellus Shale reserves which were divested in 2017.

In the Company's U.S. onshore business, organic reserve additions and revisions excluding acquisitions, totaled 265 million boe.  U.S. onshore reserve replacement* was approximately 300% at a cost of approximately US$7.00 per BOE.  The composition of U.S. onshore reserves was approximately two-thirds liquids in 2017, up from 50% at the end of 2016. 

The Company's onshore reserve additions were primarily driven by activity and performance in the DJ Basin and Delaware Basin.  Reserve replacement* in the DJ Basin and Delaware Basin was approximately 285% and 1135%, respectively.  Improved well performance drove DJ Basin reserve additions and revisions of 146 million boe, before the removal of 31 million boe associated with legacy vertical wells.  Excluding acquisitions, reserve additions and revisions totaled 108 Million boe in the Delaware Basin driven by the pace of development and enhanced completion results. 

The Company also added 57 million boe to its Delaware Basin reserves primarily through the acquisition of Clayton Williams Energy in 2017.  Several non-core asset sales were completed in 2017, including the divestment of the Marcellus upstream assets, non-core acreage in the DJ Basin and various mineral interests, resulting in a total reduction of 261 million boe. 

In the Company's Israel business, 3.3 trillion f3 of natural gas reserves were added as a result of the sanction of the Company's world-class Leviathan project.  An additional 292 billion f3 of natural gas reserves was added from performance revisions at the Tamar field. 

The 2017 price deck for calculating proved reserves, before adjusting for differentials, was US$51.34/bbl of WTI crude oil and US$2.98 per million British thermal unit of Henry Hub natural gas.  Total development and exploration costs incurred for upstream oil and gas activities, excluding acquisitions, was approximately US$2.5 billion for full-year 2017.

*Calculated as extensions, discoveries, and performance and price revisions divided by production.

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