uploads///NBL Debt Position

Analyzing Noble Energy’s Debt Position


Jan. 13 2016, Updated 4:06 p.m. ET

Noble Energy’s debt

As of September 30, 2015, Noble Energy’s (NBL) total debt stood at ~$8 billion. With ~$1 billion in cash and cash equivalents, the company’s net debt was ~$7 billion at the end of 3Q15.

Article continues below advertisement

Debt ratio

Net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) is a debt ratio that shows how many years it would take for a company to pay back its debt under the current situation. As seen in the above chart, as of 3Q15, Noble Energy’s net debt-to-EBITDA is quite high, at ~4.4x. Even when compared with its own net debt-to-EBITDA historical average of ~1.5x, the current ratio is still high. The increase in the net debt-to-EBITDA ratio in the last two quarters can be attributed to a steep increase in net debt as well as falling EBITDA due to lower natural gas prices and crude oil prices.

In 3Q15, Noble Energy completed the acquisition of Rosetta Resources in an all-stock transaction valued at $2.1 billion plus the assumption of Rosetta’s net debt of $1.8 billion. This transaction caused a steep increase in Noble Energy’s net debt in 3Q15.

Noble Energy’s leverage in 3Q15

Another metric used to gauge a company’s indebtedness is the debt-to-equity ratio. As of 3Q15, Noble Energy had a debt-to-equity ratio of ~65%, which is midrange compared with the ratios of other upstream companies within the S&P 500 (SPY). Range Resources (RRC), EQT Corporation (EQT), and Cimarex Energy (XEC) have debt-to-equity ratios of ~116%, ~43%, and ~44%, respectively. A higher debt-to-equity ratio usually indicates higher risk, as it means that a company has been aggressively financing its growth through debt.


More From Market Realist

  • Businesswoman looking out a window
    Company & Industry Overviews
    Shifting Focus: Three Women Investing Funds in 2021
  • Aol logo on office building,
    Company & Industry Overviews
    What We Know About Apollo Global Management, New Owners of AOL and Yahoo
  • Chick-fil-A sign
    Company & Industry Overviews
    Why It Only Costs $10K to Own a Chick-fil-A Location
  • Beyond Meat Burger 3.0
    Company & Industry Overviews
    How Is Beyond Burger 3.0 Different and Will It Bring BYND Stock Up?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.