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UPDATE 3-Noble Energy sees opportunity in Mexico, 2014 capex higher

Anna Driver
Tuesday, 17 Dec 2013 | 5:44 PM ET

* Noble has talked with Mexican officials -CEO

* Capital spending seen up 23 percent from 2013

* Company to spend 70 percent of budget on U.S. onshore operations

HOUSTON, Dec 17 (Reuters) - Noble Energy Inc has talked with Mexican government officials over possible investments in that country's oil and gas resources although reforms are still in the early stages, the U.S. oil and gas company's CEO said on Tuesday.

Mexico's Congress last Thursday voted to open up the country's ailing energy sector to private investment, in the biggest shake-up of the state-run sector in 75 years, ending the exploration and production monopoly held for decades by state-run oil and gas company Pemex.

"Mexico has already been reaching out to a number of companies and we certainly have been involved in those discussions," Noble CEO Chuck Davidson told reporters after the company's analyst meeting. "It's far too early to tell where those discussions might go."

Noble said it expected capital spending to rise 23 percent to $4.8 billion in 2014, with 70 percent allocated to its onshore operations in the United States.

Oil and gas producers are stepping up spending on drilling in North America's shale fields, which are seen as less risky and give higher returns.

Noble Energy said a majority of its 2014 spending would be on operations in Colorado's Denver-Julesburg Basin, where it expects sales volumes to rise 28 percent next year.

Noble forecast total sales from continuing operations to average 302,000 to 322,000 barrels of oil equivalent per day in 2014, up roughly 18 percent from this year's target.

Analysts at Houston-based energy investment bank Simmons & Co International said Noble's production forecast fell short of analysts' expectations for a gain of about 20 percent.

"Overall, good news," Simmons said in a note to clients. "The only push back might be the 2014 production growth rate and production mix."

Noble Energy also raised its fourth-quarter production estimate, citing higher-than-expected sales from its U.S. onshore operations, West Africa and Israel.

The company increased its current-quarter sales volume estimate to a range of 286,000 to 288,000 boe/d. It had previously forecast 280,000 to 285,000.

Noble Energy expects global deepwater programs to account for 30 percent of its capital investment next year.

The company's shares fell 2.6 percent to close at $67.61 on the New York Stock Exchange on Tuesday, while the SIG Oil Exploration and Production Index fell 0.72 percent. At Monday's close, Noble's stock had risen nearly 20 percent in the past six months.

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