----

----

|   | x | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934 |
|--------|---|----------------------------------------------------------------------------------------------------------|

|   | o | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934 |
|--------|---|--------------------------------------------------------------------------------------------------------------|

| Delaware                                      |   | 73-0785597                                   |
|-----------------------------------------------|--------|----------------------------------------------|
| (State      of incorporation)                 |   | (I.R.S.      employer identification number) |
| 100      Glenborough Drive, Suite 100    |   |                                         |
| Houston,      Texas                           |   | 77067                                        |
| (Address      of principal executive offices) |   | (Zip      Code)                              |

| Title      of each class               |   | Name      of each exchange on which registered |
|----------------------------------------|--------|------------------------------------------------|
| Common      Stock, $3.33-1/3 par value |   | New      York Stock Exchange                   |
| Preferred      Stock Purchase Rights   |   | New      York Stock Exchange                   |

| Large      accelerated filer x | Accelerated      filer o | Non-accelerated      filer o                             | Smaller      reporting company o |
|--------------------------------|--------------------------|----------------------------------------------------------|----------------------------------|
|                           |                     |  (Do      not check if a smaller reporting company) |                             |

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TABLE OF CONTENTS

| Part I    |
|----------------|
| Items 1 and 2. | Business and Properties | 1 |
| Item 1A.       | Risk Factors | 17 |
| Item 1B.       | Unresolved Staff      Comments | 22 |
| Item 3.        | Legal Proceedings | 22 |
| Item 4.        | Submission of Matters to a Vote of Security      Holders | 22 |
|           | Executive Officers | 22 |
| Part II   |
| Item 5.        | Market      for Registrant’s Common Equity, Related Stockholder Matters and Issuer      Purchases of      Equity Securities | 24 |
| Item 6.        | Selected FinancialData | 26 |
| Item 7.        | Management’s Discussion and Analysis of      Financial Condition and Results of Operations | 27 |
| Item 7A.       | Quantitative and Qualitative Disclosures      About Market Risk | 49 |
| Item 8.        | Financial Statements and      Supplementary Data | 50 |
| Item 9.        | Changes in and Disagreements with      Accountants on Accounting and Financial Disclosure | 102 |
| Item 9A.       | Controls andProcedures | 102 |
| Item 9B.       | Other Information | 103 |
| Part III  |
| Item 10.       | Directors, Executive Officers and Corporate      Governance | 104 |
| Item 11.       | Executive Compensation | 104 |
| Item 12.       | Security Ownership of Certain Beneficial Owners      and Management and Related Stockholder Matters | 104 |
| Item 13.       | Certain Relationships and Related      Transactions, and Director Independence | 104 |
| Item 14.       | Principal Accounting Fees and      Services | 104 |
| Part IV   |
| Item 15.       | Exhibits, Financial Statements      Schedules | 104 |

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PART I

Business and Properties

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|                             |   | December      31, 2007 |   |
|----------------------------------|--------|------------------------|--------|
|                             |   | Proved                 |   |   | Proved |   |   | Total |   |
|                             |   | Developed              |   |   | Undeveloped |   |   | Proved |   |
|                             |   | Reserves               |   |   | Reserves |   |   | Reserves |   |
| United      States               |   |                   |   |   |   |   |   |   |   |
| Natural      gas (Bcf)           |   |                   | 1,259  |   |   |   | 581 |   |   |   | 1,840 |   |
| Crude      oil (MMBbls)          |   |                   | 129    |   |   |   | 78 |   |   |   | 207 |   |
| Total      US (MMBoe)            |   |                   | 339    |   |   |   | 175 |   |   |   | 514 |   |
| International                    |   |                   |   |   |   |   |   |   |   |   |   |   |
| Natural      gas (Bcf)           |   |                   | 1,297  |   |   |   | 170 |   |   |   | 1,467 |   |
| Crude      oil (MMBbls)          |   |                   | 100    |   |   |   | 22 |   |   |   | 122 |   |
| Total      International (MMBoe) |   |                   | 316    |   |   |   | 50 |   |   |   | 366 |   |
| Worldwide                        |   |                   |   |   |   |   |   |   |   |   |   |   |
| Natural      gas (Bcf)           |   |                   | 2,556  |   |   |   | 751 |   |   |   | 3,307 |   |
| Crude      oil (MMBbls)          |   |                   | 229    |   |   |   | 100 |   |   |   | 329 |   |
| Total      Worldwide (MMBoe)     |   |                   | 655    |   |   |   | 225 |   |   |   | 880 |   |

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| United      States |
|--------------------|

|                              |   |  Year      Ended December 31, 2007 |    |   |  December      31, 2007 |   |
|-----------------------------------|--------|-----------------------------------------|---------|--------|------------------------------|--------|
|                              |   | Sales      Volumes                      |    |   | Proved      Reserves         |   |
|                              |   | Natural      Gas                        |    |   | Crude      Oil               |   |   | Total |   |   | Natural      Gas |   |   | Crude      Oil |   |   | Total |   |
|                              |   | (MMcf)                                  |    |   | (MBbls)                      |   |   | (MBoe) |   |   | (Bcf) |   |   | (MMBbls) |   |   | (MMBoe) |   |
| Northern      Region              |   |                                    |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wattenberg                        |   |                                    | 59,670  |   |                         |   | 4,674 |   |   |   | 14,619 |   |   |   | 893 |   |   |   | 109 |   |   |   | 258 |   |
| Piceance                          |   |                                    | 7,797   |   |                         |   | 7 |   |   |   | 1,307 |   |   |   | 183 |   |   |   | - |   |   |   | 31 |   |
| Niobrara                          |   |                                    | 7,897   |   |                         |   | - |   |   |   | 1,316 |   |   |   | 98 |   |   |   | - |   |   |   | 16 |   |
| Other                             |   |                                    | 9,392   |   |                         |   | 53 |   |   |   | 1,618 |   |   |   | 139 |   |   |   | 1 |   |   |   | 24 |   |
| Total                             |   |                                    | 84,756  |   |                         |   | 4,734 |   |   |   | 18,860 |   |   |   | 1,313 |   |   |   | 110 |   |   |   | 329 |   |
| Southern      Region              |   |                                    |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deepwater      Gulf of Mexico     |   |                                    | 18,722  |   |                         |   | 5,847 |   |   |   | 8,967 |   |   |   | 79 |   |   |   | 21 |   |   |   | 34 |   |
| Mid-continent                     |   |                                    | 30,760  |   |                         |   | 3,340 |   |   |   | 8,467 |   |   |   | 341 |   |   |   | 51 |   |   |   | 108 |   |
| Gulf      Coast onshore and other |   |                                    | 16,219  |   |                         |   | 1,530 |   |   |   | 4,233 |   |   |   | 107 |   |   |   | 25 |   |   |   | 43 |   |
| Total                             |   |                                    | 65,701  |   |                         |   | 10,717 |   |   |   | 21,667 |   |   |   | 527 |   |   |   | 97 |   |   |   | 185 |   |
| Total      United States          |   |                                    | 150,457 |   |                         |   | 15,451 |   |   |   | 40,527 |   |   |   | 1,840 |   |   |   | 207 |   |   |   | 514 |   |

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|                              |   | Year      Ended           |                                                                                  |                   |
|-----------------------------------|--------|---------------------------|---------------------------------------------------------------------------------------|------------------------|
|                              |   | December      31, 2007    |                                                                                  | December      31, 2007 |
|                              |   | Gross      Wells Drilled/ |                                                                                  | Gross                  |
|                              |   | Participated      in      |                                                                                  | Productive      Wells  |
| Northern      Region              |   |                      |                                                                                  |                   |   |
| Wattenberg                        |   |                      |           508                       |                   |                        5,161 |
| Piceance                          |   |                      |             55            |                   |                           112 |
| Niobrara                          |   |                      |           125                       |                   |                           744 |
| Other                             |   |                      |             56            |                   |                        1,239 |
| Total                             |   |                      |           744                       |                   |                        7,256 |
| Southern      Region              |   |                      |                                                                                  |                   |   |
| Deepwater      Gulf of Mexico     |   |                      |               6 |                   |                             13 |
| Mid-continent                     |   |                      |           147                       |                   |                        3,981 |
| Gulf      Coast onshore and other |   |                      |             38            |                   |                           457 |
| Total                             |   |                      |           191                       |                   |                        4,451 |
| Total      United States          |   |                      |           935                       |                   |                      11,707 |

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|                                                                 |   |  Year      Ended December 31, 2007 |    |   |  December      31, 2007 |   |
|----------------------------------------------------------------------|--------|-----------------------------------------|---------|--------|------------------------------|--------|
|                                                                 |   | Sales      Volumes                      |    |   | Proved      Reserves         |   |
|                                                                 |   | Natural      Gas                        |    |   | Crude      Oil               |   |   | Total |   |   | Natural      Gas |   |   | Crude      Oil |   |   | Total |   |
|                                                                 |   | (MMcf)                                  |    |   | (MBbls)                      |   |   | (MBoe) |   |   | (Bcf) |   |   | (MMBbls) |   |   | (MMBoe) |   |
| International                                                        |   |                                    |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| West      Africa                                                     |   |                                    | 48,349  |   |                         |   | 5,500 |   |   |   | 13,558 |   |   |   | 941 |   |   |   | 82 |   |   |   | 239 |   |
| North      Sea                                                       |   |                                    | 2,276   |   |                         |   | 4,564 |   |   |   | 4,943 |   |   |   | 19 |   |   |   | 25 |   |   |   | 28 |   |
| Israel                                                               |   |                                    | 40,449  |   |                         |   | - |   |   |   | 6,742 |   |   |   | 319 |   |   |   | - |   |   |   | 53 |   |
| Ecuador                                                              |   |                                    | 9,385   |   |                         |   | - |   |   |   | 1,564 |   |   |   | 188 |   |   |   | - |   |   |   | 31 |   |
| China                                                                |   |                                    | -       |   |                         |   | 1,402 |   |   |   | 1,402 |   |   |   | - |   |   |   | 8 |   |   |   | 8 |   |
| Argentina                                                            |   |                                    | -       |   |                         |   | 1,034 |   |   |   | 1,034 |   |   |   | - |   |   |   | 7 |   |   |   | 7 |   |
| Total      consolidated                                              |   |                                    | 100,459 |   |                         |   | 12,500 |   |   |   | 29,243 |   |   |   | 1,467 |   |   |   | 122 |   |   |   | 366 |   |
| Equity      investees:                                               |   |                                    |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Condensate      (MBbls)                                              |   |                                    | -       |   |                         |   | 670 |   |   |   | 670 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LPG      (MBbls)                                                     |   |                                    | -       |   |                         |   | 2,135 |   |   |   | 2,135 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                |   |                                    | 100,459 |   |                         |   | 15,305 |   |   |   | 32,048 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Equity      investee share of  methanol sales (Kgal) |   |                                    |    |   |                         |   |   |   |   |   | 160,540 |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                     |   |  Year      Ended                         |   |   |                       |   |
|--------------------------|--------|-----------------------------------------------|--------|--------|----------------------------|--------|
|                     |   | December      31, 2007                        |   |   | December      31, 2007     |   |
|                     |   | Gross      Wells Drilled/Participated      in |   |   | GrossProductive      Wells |   |
| International            |   |                                          |   |   |                       |   |
| West      Africa         |   |                                          | 7      |   |                       |   | 20 |   |
| North      Sea           |   |                                          | 2      |   |                       |   | 22 |   |
| Israel                   |   |                                          | 1      |   |                       |   | 8 |   |
| Ecuador                  |   |                                          | -      |   |                       |   | 5 |   |
| China                    |   |                                          | -      |   |                       |   | 16 |   |
| Argentina                |   |                                          | 50     |   |                       |   | 732 |   |
| Total      International |   |                                          | 60     |   |                       |   | 803 |   |

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|                               |   |                        |    |   |                     |   |   |                 |   |   |             |   |   | Average               |   |
|------------------------------------|--------|-----------------------------|---------|--------|--------------------------|--------|--------|----------------------|--------|--------|------------------|--------|--------|-----------------------|--------|
|                               |   | Sales      Volumes      (1) |    |   | Average      Sales Price |   |   | Production      Cost |
|                               |   | Natural      Gas            |    |   | Crude      Oil           |   |   | Natural      Gas     |   |   | Crude      Oil   |   |   |                  |   |
|                               |   | MMcf                        |    |   | MBbls                    |   |   | Per      Mcf (2)     |   |   | Per      Bbl (2) |   |   | Per      BOE      (3) |   |
| Year      Ended December 31, 2007  |   |                        |    |   |                     |   |   |                 |   |   |             |   |   |                  |   |
| United      States                 |   |                        | 150,457 |   |                     |   | 15,451 |                 |   | $      | 7.51             |   |   | $                     | 53.22  |   |   | $ | 8.49 |   |
| West      Africa (4)      (5)      |   |                        | 48,349  |   |                     |   | 5,500  |                 |   |   | 0.29             |   |   |                  | 71.27  |   |   |   | 2.89 |   |
| North      Sea                     |   |                        | 2,276   |   |                     |   | 4,564  |                 |   |   | 6.54             |   |   |                  | 76.47  |   |   |   | 9.81 |   |
| Israel                             |   |                        | 40,449  |   |                     |   | -      |                 |   |   | 2.79             |   |   |                  | -      |   |   |   | 1.14 |   |
| Other      International (6)       |   |                        | 9,385   |   |                     |   | 2,436  |                 |   |   | -                |   |   |                  | 53.69  |   |   |   | 12.06 |   |
| Total      Consolidated Operations |   |                        | 250,916 |   |                     |   | 27,951 |                 |   |   | 5.26             |   |   |                  | 60.61  |   |   |   | 6.99 |   |
| Equity      Investee (7)           |   |                        | -       |   |                     |   | 2,805  |                 |   |   | -                |   |   |                  | 55.09  |   |   |   |   |   |
| Total                              |   |                        | 250,916 |   |                     |   | 30,756 |                 |   | $      | 5.26             |   |   | $                     | 60.10  |   |   |   |   |   |
| Year      Ended December 31, 2006  |   |                        |    |   |                     |   |   |                 |   |   |             |   |   |                  |   |   |   |   |   |   |
| United      States                 |   |                        | 164,875 |   |                     |   | 16,715 |                 |   | $      | 6.61             |   |   | $                     | 50.68  |   |   | $ | 8.12 |   |
| West      Africa (4)      (5)      |   |                        | 16,579  |   |                     |   | 6,519  |                 |   |   | 0.37             |   |   |                  | 62.51  |   |   |   | 2.86 |   |
| North      Sea                     |   |                        | 2,967   |   |                     |   | 1,357  |                 |   |   | 8.00             |   |   |                  | 67.43  |   |   |   | 10.08 |   |
| Israel                             |   |                        | 33,906  |   |                     |   | -      |                 |   |   | 2.72             |   |   |                  | -      |   |   |   | 1.60 |   |
| Other      International (6)       |   |                        | 9,041   |   |                     |   | 2,752  |                 |   |   | 0.96             |   |   |                  | 52.05  |   |   |   | 9.74 |   |
| Total      Consolidated Operations |   |                        | 227,368 |   |                     |   | 27,343 |                 |   |   | 5.55             |   |   |                  | 54.47  |   |   |   | 6.97 |   |
| Equity      Investee (7)           |   |                        | -       |   |                     |   | 2,931  |                 |   |   | -                |   |   |                  | 45.83  |   |   |   |   |   |
| Total                              |   |                        | 227,368 |   |                     |   | 30,274 |                 |   | $      | 5.55             |   |   | $                     | 53.64  |   |   |   |   |   |
| Year      Ended December 31, 2005  |   |                        |    |   |                     |   |   |                 |   |   |             |   |   |                  |   |   |   |   |   |   |
| United      States                 |   |                        | 125,543 |   |                     |   | 9,468  |                 |   | $      | 7.43             |   |   | $                     | 46.67  |   |   | $ | 7.39 |   |
| West      Africa (4)      (5)      |   |                        | 23,938  |   |                     |   | 6,492  |                 |   |   | 0.25             |   |   |                  | 42.51  |   |   |   | 2.93 |   |
| North      Sea                     |   |                        | 3,394   |   |                     |   | 1,964  |                 |   |   | 5.93             |   |   |                  | 52.68  |   |   |   | 7.54 |   |
| Israel                             |   |                        | 24,228  |   |                     |   | -      |                 |   |   | 2.68             |   |   |                  | -      |   |   |   | 2.11 |   |
| Other      International (6)       |   |                        | 8,389   |   |                     |   | 2,866  |                 |   |   | 1.10             |   |   |                  | 42.37  |   |   |   | 7.15 |   |
| Total      Consolidated Operations |   |                        | 185,492 |   |                     |   | 20,790 |                 |   |   | 5.78             |   |   |                  | 45.35  |   |   |   | 6.06 |   |
| Equity      Investee (7)           |   |                        | -       |   |                     |   | 1,183  |                 |   |   | -                |   |   |                  | 43.43  |   |   |   |   |   |
| Total                              |   |                        | 185,492 |   |                     |   | 21,973 |                 |   | $      | 5.78             |   |   | $                     | 45.25  |   |   |   |   |   |

|  (1) | 2007      volumes include the effect of crude oil sales less than volumes produced      of 165 MBbls in Equatorial Guinea, 112 MBbls in the North Sea and 48 MBbls      in other international. 2006 volumes include the effect of crude oil sales      in excess of volumes produced of 195 MBbls in Equatorial Guinea, less than      volumes produced of 99 MBbls in the North Sea, and in excess of volumes      produced of 18 MBbls in other international. The variance between      production from the field and sales volumes is attributable to the timing      of liquid hydrocarbon tanker liftings. Sales volumes equal production      volumes in 2005. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Average      natural gas sales prices in the US reflect an increase of $1.12 per Mcf      (2007), and reductions of $0.25 per Mcf (2006) and $0.77 per Mcf (2005)      from hedging activities. Average crude oil sales prices for the US reflect      reductions of $13.68 per Bbl (2007), $11.41 per Bbl (2006) and $8.03 per      Bbl (2005) from hedging activities. Average crude oil sales prices for      West Africa reflect reductions of $2.19 (2007) and $9.93 (2005) from      hedging activities. We did not hedge West Africa crude oil sales in      2006. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Average      production costs include oil and gas operating costs, workover and repair      expense, production and ad valorem taxes, and transportation      expense. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Natural      gas from the Alba field in Equatorial Guinea is under contract for $0.25      per MMBtu to a methanol plant, an LPG plant and an LNG facility. Sales to      these plants are based on a BTU equivalent and then converted to a dry gas      equivalent volume. The methanol and LPG plants are owned by affiliated      entities accounted      for under the equity method of accounting. The volumes produced by the LPG      plant are included in the crude oil information. For 2007 and 2006, the      price on an Mcf basis has been adjusted to reflect the Btu content of gas      sales. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (5) | Equatorial      Guinea natural gas volumes include sales to the LNG facility of 78,090      Mcfpd for 2007.  There were no natural gas sales to the LNG      facility before 2007. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)  | Other      International natural gas volumes include Ecuador and Argentina. Although      Ecuador natural gas volumes are included in Other International      production, they are excluded from average natural gas sales prices. We      own 100% of the natural gas-to-power project in Ecuador and intercompany      natural gas sales are eliminated. Natural gas production volumes      associated with the gas-to-power project were 9,385 MMcf for 2007, 8,933      MMcf for 2006 and 8,321 MMcf for 2005. Other International oil includes      China and Argentina. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Volumes      represent sales of condensate and LPG from the Alba plant in Equatorial      Guinea. LPG volumes were 2,135 MBbls in 2007, 2,297 MBbls in 2006      and 850 MBbls in 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |   | Crude      Oil Wells |   |   | Natural      Gas Wells |   |    | Total  |   |
|-------------------------------|--------|----------------------|--------|--------|------------------------|--------|---------|--------|--------|
|                          |   | Gross                |   |   | Net                    |   |    | Gross  |   |   | Net |   |   | Gross |   |   | Net |   |
| United      States - Onshore  |   |                 | 7,055  |   |                   |   | 5,997.8 |   |   |   | 4,609 |   |   |   | 3,134.5 |   |   |   | 11,664 |   |   |   | 9,132.3 |   |
| United      States - Offshore |   |                 | 28     |   |                   |   | 26.1    |   |   |   | 15 |   |   |   | 8.1 |   |   |   | 43 |   |   |   | 34.2 |   |
| West      Africa              |   |                 | 1      |   |                   |   | 0.4     |   |   |   | 19 |   |   |   | 7.2 |   |   |   | 20 |   |   |   | 7.6 |   |
| North      Sea                |   |                 | 15     |   |                   |   | 2.7     |   |   |   | 7 |   |   |   | 0.7 |   |   |   | 22 |   |   |   | 3.4 |   |
| Israel                        |   |                 | -      |   |                   |   | -       |   |   |   | 8 |   |   |   | 3.8 |   |   |   | 8 |   |   |   | 3.8 |   |
| Ecuador                       |   |                 | -      |   |                   |   | -       |   |   |   | 5 |   |   |   | 5.0 |   |   |   | 5 |   |   |   | 5.0 |   |
| China                         |   |                 | 16     |   |                   |   | 9.1     |   |   |   | - |   |   |   | - |   |   |   | 16 |   |   |   | 9.1 |   |
| Argentina                     |   |                 | 732    |   |                   |   | 95.4    |   |   |   | - |   |   |   | - |   |   |   | 732 |   |   |   | 95.4 |   |
| Total                         |   |                 | 7,847  |   |                   |   | 6,131.5 |   |   |   | 4,663 |   |   |   | 3,159.3 |   |   |   | 12,510 |   |   |   | 9,290.8 |   |
|                          |   |                 |   |   |                   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Multiple      Completions     |   |                 | 8      |   |                   |   | 5.9     |   |   |   | 14 |   |   |   | 3.6 |   |   |   | 22 |   |   |   | 9.5 |   |

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|                          |   | Developed      Acreage |      |   | Undeveloped      Acreage |   |
|-------------------------------|--------|------------------------|-----------|--------|--------------------------|--------|
|                          |   | Gross                  |      |   | Net                      |   |   | Gross |   |   | Net |   |
| United      States            |   |                   |      |   |                     |   |   |   |   |   |   |   |
| Onshore                       |   |                   | 1,308,823 |   |                     |   | 835,445 |   |   |   | 1,234,858 |   |   |   | 786,391 |   |
| Offshore                      |   |                   | 147,945   |   |                     |   | 94,964 |   |   |   | 485,258 |   |   |   | 227,627 |   |
| Total      United States      |   |                   | 1,456,768 |   |                     |   | 930,409 |   |   |   | 1,720,116 |   |   |   | 1,014,018 |   |
|                          |   |                   |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Equatorial      Guinea        |   |                   | 45,203    |   |                     |   | 15,727 |   |   |   | 850,197 |   |   |   | 379,026 |   |
| Cameroon                      |   |                   | -         |   |                     |   | - |   |   |   | 1,125,000 |   |   |   | 562,500 |   |
| North      Sea (1)            |   |                   | 48,230    |   |                     |   | 5,671 |   |   |   | 836,625 |   |   |   | 339,151 |   |
| Israel                        |   |                   | 123,552   |   |                     |   | 58,142 |   |   |   | 1,183,479 |   |   |   | 532,818 |   |
| China                         |   |                   | 7,413     |   |                     |   | 4,225 |   |   |   | - |   |   |   | - |   |
| Ecuador                       |   |                   | 12,355    |   |                     |   | 12,355 |   |   |   | 851,771 |   |   |   | 851,771 |   |
| Argentina                     |   |                   | 113,325   |   |                     |   | 15,548 |   |   |   | - |   |   |   | - |   |
| Suriname                      |   |                   | -         |   |                     |   | - |   |   |   | 7,740,328 |   |   |   | 6,362,864 |   |
| Total      International      |   |                   | 350,078   |   |                     |   | 111,668 |   |   |   | 12,587,400 |   |   |   | 9,028,130 |   |
| Total      Worldwide      (2) |   |                   | 1,806,846 |   |                     |   | 1,042,077 |   |   |   | 14,307,516 |   |   |   | 10,042,148 |   |

|  (1) | The      North Sea includes acreage in the UK, the Netherlands and Norway. In 2008,      we entered into an agreement, subject to regulatory approval, to sell our      interest in the Norway acreage consisting of 411,065 gross (126,607 net)      undeveloped acres. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | If      production is not established, approximately 731,079 gross acres (433,236      net acres) will expire during 2008, 424,734 gross acres (193,554 net      acres) will expire during 2009, and 683,274 gross acres (367,949 net      acres) will expire during 2010. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                              |   | Net      Exploratory Wells |   |   | Net      Development Wells |   |
|-----------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|                              |   | Productive                 |   |   | Dry                        |   |   | Total |   |   | Productive      (1) |   |   | Dry |   |   | Total |   |
| Year      Ended December 31, 2007 |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States                |   |                       | 14.2   |   |                       |   | 4.5 |   |   |   | 18.7 |   |   |   | 757.6 |   |   |   | 27.6 |   |   |   | 785.2 |   |
| West      Africa                  |   |                       | 2.6    |   |                       |   | 0.5 |   |   |   | 3.1 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| North      Sea                    |   |                       | 0.5    |   |                       |   | - |   |   |   | 0.5 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Israel                            |   |                       | -      |   |                       |   | - |   |   |   | - |   |   |   | 0.4 |   |   |   | - |   |   |   | 0.4 |   |
| Argentina                         |   |                       | -      |   |                       |   | 0.1 |   |   |   | 0.1 |   |   |   | 6.7 |   |   |   | - |   |   |   | 6.7 |   |
| Total                             |   |                       | 17.3   |   |                       |   | 5.1 |   |   |   | 22.4 |   |   |   | 764.7 |   |   |   | 27.6 |   |   |   | 792.3 |   |
| Year      Ended December 31, 2006 |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States                |   |                       | 6.3    |   |                       |   | 9.0 |   |   |   | 15.3 |   |   |   | 666.6 |   |   |   | 5.5 |   |   |   | 672.1 |   |
| West      Africa                  |   |                       | -      |   |                       |   | 0.4 |   |   |   | 0.4 |   |   |   | 1.8 |   |   |   | - |   |   |   | 1.8 |   |
| North      Sea                    |   |                       | -      |   |                       |   | - |   |   |   | - |   |   |   | 1.1 |   |   |   | - |   |   |   | 1.1 |   |
| Argentina                         |   |                       | -      |   |                       |   | - |   |   |   | - |   |   |   | 7.6 |   |   |   | - |   |   |   | 7.6 |   |
| Total                             |   |                       | 6.3    |   |                       |   | 9.4 |   |   |   | 15.7 |   |   |   | 677.1 |   |   |   | 5.5 |   |   |   | 682.6 |   |
| Year      Ended December 31, 2005 |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States                |   |                       | 4.7    |   |                       |   | 10.7 |   |   |   | 15.4 |   |   |   | 488.1 |   |   |   | 25.9 |   |   |   | 514.0 |   |
| West      Africa                  |   |                       | -      |   |                       |   | - |   |   |   | - |   |   |   | 0.3 |   |   |   | - |   |   |   | 0.3 |   |
| North      Sea                    |   |                       | -      |   |                       |   | 0.2 |   |   |   | 0.2 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Argentina                         |   |                       | -      |   |                       |   | - |   |   |   | - |   |   |   | 7.7 |   |   |   | - |   |   |   | 7.7 |   |
| Total                             |   |                       | 4.7    |   |                       |   | 10.9 |   |   |   | 15.6 |   |   |   | 496.1 |   |   |   | 25.9 |   |   |   | 522.0 |   |

| (1) | Does      not include wells drilled but not yetcompleted. |
|-----|-----------------------------------------------------------|

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RiskFactors

|   | · | worldwide      and domestic supplies of crude oil and natural  gas; |
|--------|--------|---------------------------------------------------------------------|

|   | · | actions      taken by foreign oil and gas producingnations; |
|--------|--------|-------------------------------------------------------------|

|   | · | political      conditions and events (including instability or armed conflict) in crude      oil producing or natural gas producingregions; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      level of global crude oil and natural gas  inventories; |
|--------|--------|------------------------------------------------------------------|

|   | · | the      price and level of foreign imports; |
|--------|--------|----------------------------------------------|

|   | · | the      price and availability of alternativefuels; |
|--------|--------|------------------------------------------------------|

|   | · | the      availability of pipeline capacity and  infrastructure; |
|--------|--------|-----------------------------------------------------------------|

|   | · | the      availability of crude oil transportation and refining      capacity; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | weather      conditions; |
|--------|--------|--------------------------|

|   | · | electricity      dispatch; |
|--------|--------|----------------------------|

|   | · | domestic      and foreign governmental regulations and taxes;  and |
|--------|--------|--------------------------------------------------------------------|

|   | · | the      overall economic environment. |
|--------|--------|----------------------------------------|

|   | · | limiting      our financial condition, liquidity, ability to finance planned capital      expenditures and results ofoperations; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | reducing      the amount of crude oil and natural gas that we can produce      economically; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | causing      us to delay or postpone some of our capital  projects; |
|--------|--------|---------------------------------------------------------------------|

|   | · | reducing      our revenues, operating income and cashflow; |
|--------|--------|------------------------------------------------------------|

|   | · | reducing      the carrying value of our crude oil and natural gas properties;      or |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | limiting      our access to sources of capital, such as equity and long-term      debt. |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | historical      production from the area compared with production from other      areas; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | the      assumed effects of regulations by governmental  agencies; |
|--------|--------|--------------------------------------------------------------------|

|   | · | assumptions      concerning future crude oil and natural gas  prices; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | future      operating costs; |
|--------|--------|------------------------------|

|   | · | severance      and excise taxes; |
|--------|--------|----------------------------------|

|  | · | development      costs; and |
|--|--------|-----------------------------|

|   | · | workover      and remedial costs. |
|--------|--------|-----------------------------------|

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|   | · | war,      terrorist acts and civildisturbances; |
|--------|--------|-------------------------------------------------|

|   | · | loss      of revenue, property and equipment as a result of actions taken by foreign      crude oil and natural gas producing nations, such as expropriation or      nationalization of assets and renegotiation, modification or nullification      of existing contracts, such as may occur      pursuant to the hydrocarbons law enacted in 2006 by the government of      Equatorial Guinea; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in taxation policies; |
|--------|--------|------------------------------------|

|   | · | laws      and policies of the US and foreign jurisdictions affecting foreign      investment, taxation, trade and business  conduct; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | · | foreign      exchange restrictions; |
|--------|--------|-------------------------------------|

|   | · | international      monetary fluctuations and changes in the value of the US dollar;      and |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | other      hazards arising out of foreign governmental sovereignty over areas in      which we conduct operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | pipeline      ruptures and spills; |
|--------|--------|------------------------------------|

|   | · | fires; |
|--------|--------|--------|

|   | · | explosions,      blowouts and cratering; |
|--------|--------|------------------------------------------|

|   | · | formations      with abnormal pressures; |
|--------|--------|------------------------------------------|

|   | · | equipment      malfunctions; |
|--------|--------|------------------------------|

|   | · | hurricanes;      and |
|--------|--------|----------------------|

|   | · | other      natural disasters. |
|--------|--------|-------------------------------|

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|   | · | unexpected      drilling conditions; |
|--------|--------|--------------------------------------|

|   | · | title      problems; |
|--------|--------|----------------------|

|   | · | pressure      or other irregularities informations; |
|--------|--------|-----------------------------------------------------|

|   | · | equipment      failures or accidents; |
|--------|--------|---------------------------------------|

|   | · | adverse      weather conditions; |
|--------|--------|----------------------------------|

|   | · | compliance      with environmental and other governmental requirements;  and |
|--------|--------|------------------------------------------------------------------------------|

|   | · | increases      in the cost of, or shortages or delays in the availability of, drilling      rigs and equipment. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

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|   | · | seeking      to acquire desirable producing properties or new leases for future      exploration; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | marketing      our crude oil and natural gasproduction; |
|--------|--------|---------------------------------------------------------|

|   | · | seeking      to acquire the equipment and expertise necessary to operate and develop      properties; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | attracting      and retaining employees with certainskills. |
|--------|--------|-------------------------------------------------------------|

|   | · | a      portion of our cash flows from operating activities must be used to      service our indebtedness and is not available for other      purposes; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      may be at a competitive disadvantage as compared to similar companies that      have less debt; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | the      covenants contained in the agreements governing our outstanding      indebtedness and future indebtedness may limit our ability to borrow      additional funds, pay dividends and make certain investments and may also      affect our flexibility in planning for, and reacting to, changes in the      economy and in our industry; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | additional      financing in the future for working capital, capital expenditures,      acquisitions, general corporate or other purposes may have higher costs      and more restrictive covenants; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | changes      in the credit ratings of our debt may negatively affect the cost, terms,      conditions and availability of future financing, and lower ratings will      increase the interest rate and fees we pay on our revolving credit      facility; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we      may be more vulnerable to general adverse economic and industry      conditions. |
|--------|--------|------------------------------------------------------------------------------------------|

| Disclosure      Regarding Forward-LookingStatements |
|-----------------------------------------------------|

|   | · | our      growth strategies; |
|--------|--------|-----------------------------|

|   | · | our      ability to successfully and economically explore for and develop crude oil      and natural gas resources; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | anticipated      trends in our business; |
|--------|--------|------------------------------------------|

|   | · | our      future results of operations; |
|--------|--------|----------------------------------------|

|   | · | our      liquidity and ability to finance our acquisition, exploration and      development activities; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | market      conditions in the oil and gasindustry; |
|--------|--------|----------------------------------------------------|

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|   | · | our      ability to make and integrate acquisitions;and |
|--------|--------|---------------------------------------------------------|

|   | · | the      impact of governmental regulation. |
|--------|--------|---------------------------------------------|

| Item      1B. | Unresolved Staff    Comments. |
|---------------|-------------------------------|

| Item      3. | LegalProceedings. |
|--------------|-------------------|

| Item      4. | Submission of Matters to a Vote of Security      Holders. |
|--------------|-----------------------------------------------------------|

| ExecutiveOfficers |
|-------------------|

| Name                              |   | Age |   | Position                                                                       |
|-----------------------------------|--------|-----|--------|--------------------------------------------------------------------------------|
| Charles      D. Davidson (1)      |   | 57  |   | Chairman      of the Board, President, Chief Executive Officer and    Director |
| David      L. Stover (2)          |   | 50  |   | Executive      Vice President, Chief Operating Officer                         |
| Chris      Tong (3)               |   | 51  |   | Senior      Vice President, Chief Financial Officer                            |
| Alan      R. Bullington (4)       |   | 56  |   | Senior      Vice President, International                                      |
| Susan      M. Cunningham (5)      |   | 52  |   | Senior      Vice President, Exploration                                        |
| Arnold      J. Johnson      (6)   |   | 52  |   | Vice      President, General Counsel and Secretary                             |
| Andrea      Lee Robison (      7) |   | 49  |   | Vice      President, Human Resources                                           |

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| (1) | Charles      D. Davidson was elected President and Chief Executive Officer of Noble      Energy in October 2000 and Chairman of the Board in April 2001. Prior to      October 2000, he served as President and Chief Executive Officer of Vastar      Resources, Inc. from March 1997 to September 2000 (Chairman from April      2000) and was a Vastar Director from March 1994 to September 2000. From      September 1993 to March 1997, he served as a Senior Vice President of      Vastar. From 1972 to October 1993, he held various positions with      ARCO.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | David      L. Stover was elected Executive Vice President and Chief Operating Officer      of Noble Energy on August 1, 2006. Prior thereto, he served as Senior Vice      President of North America and Business Development from July 2004 through      July 2006. He served as Noble Energy’s Vice President of Business Development      from December 2002 through June 2004. Previous to his employment      with Noble Energy, he was employed by BP America, Inc. as Vice President,      Gulf of Mexico Shelf from September 2000 to August 2002. Prior to joining      BP, Mr. Stover was employed by Vastar, as Area Manager for Gulf of Mexico      Shelf from April 1999 to September 2000, and prior thereto, as Area      Manager for Oklahoma/Arklatex from January 1994 to April 1999. From 1979      to 1994, he held various positions with ARCO.  |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Chris      Tong was elected a Senior Vice President and Chief Financial Officer of      Noble Energy on January 1, 2005. Prior to      January 1, 2005, he had served as Senior Vice President and      Chief Financial Officer for Magnum Hunter Resources, Inc. since      August 1997. Prior thereto, he was Senior Vice President of Finance      of Tejas Acadian Holding Company and its subsidiaries including Tejas Gas      Corp., Acadian Gas Corporation and Transok, Inc., all of which were      wholly-owned subsidiaries of Tejas Gas Corporation. Mr. Tong held      these positions since August 1996, and served in other treasury      positions with Tejas beginning August 1989. From 1980 to 1989,      Mr. Tong served in various energy lending capacities with several      commercial banking institutions. Prior to his banking career,      Mr. Tong served over a year with Superior Oil Company as a Reservoir      Engineering Assistant.  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Alan      R. Bullington was elected a Vice President of Noble Energy on      April 24, 2001 and a Senior Vice President of Noble Energy on      July 27, 2004 and is currently responsible for Noble Energy’s      International Division. Prior thereto, he served as Vice President and      General Manager, International Division of Samedan Oil Corporation      beginning January 1, 1998. Prior thereto, he served as      Manager-International Operations and Exploration and as      Manager-International Operations. Prior to his employment with Samedan in      1990, he held various management positions within the exploration and      production division of Texas Eastern Transmission Company.  |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Susan      M. Cunningham was elected a Senior Vice President of Noble Energy in      April 2001 and is currently responsible for our world-wide      exploration. Prior to joining Noble Energy, Ms. Cunningham was      Texaco’s Vice President of worldwide exploration from April 2000 to      March 2001. From 1997 through 1999, she was employed by Statoil,      beginning in 1997 as Exploration Manager for deepwater Gulf of Mexico,      appointed a Vice President in 1998 and responsible, in 1999, for Statoil’s      West Africa exploration efforts. She joined Amoco in 1980 as a geologist      and held various exploration and development positions until      1997.  |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Arnold      J. Johnson was elected Vice President, General Counsel and Secretary of      Noble Energy on February 1, 2004. Prior thereto, he served as      Associate General Counsel and Assistant Secretary of Noble Energy from      January 2001 through January 2004. Previous to his employment      with Noble Energy, he served as Senior Counsel for BP America, Inc.      from October 2000 to January 2001. Mr. Johnson held several      positions as an attorney for Vastar and ARCO from March 1989 through      September 2000, most recently as Assistant General Counsel and      Assistant Secretary of Vastar from 1997 through 2000. From 1980 to      March 1989, he held various positions with ARCO.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Andrea      Lee Robison was elected to the position of Vice President of Noble Energy      on November 1, 2007 and is responsible for Human Resources. Prior thereto,      she served as Director of Human Resources from May 2002 through October      2007. Prior to joining us, Ms. Robison was Manager of Human Resources for      the Gulf of Mexico Shelf for BP America, Inc. from September 2000 through      April 2002. Prior to her employment at BP, she served as HR Director at      Vastar from 1997 through September 2000, and Compensation Consultant from      January 1994 through 1996. From 1980 through 1993 she held various      positions with ARCO. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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PART II

| Item      5. | Market for Registrant’s Common Equity, Related      Stockholder Matters and Issuer Purchases of Equity      Securities. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------|

|                |   |   |   |   |   |   |   | Dividends      |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|----------------|--------|
|                |   | High   |   |   | Low    |   |   | Per      Share |   |
| 2006                |   |   |   |   |   |   |   |           |   |
| First      quarter  |   | $      | 46.91  |   |   | $      | 38.32  |           |   | $ | 0.050 |   |
| Second      quarter |   |   | 49.33  |   |   |   | 36.14  |           |   |   | 0.075 |   |
| Third      quarter  |   |   | 51.71  |   |   |   | 41.80  |           |   |   | 0.075 |   |
| Fourth      quarter |   |   | 54.64  |   |   |   | 41.77  |           |   |   | 0.075 |   |
| 2007                |   |   |   |   |   |   |   |           |   |   |   |   |
| First      quarter  |   | $      | 60.69  |   |   | $      | 46.33  |           |   | $ | 0.075 |   |
| Second      quarter |   |   | 65.50  |   |   |   | 58.81  |           |   |   | 0.120 |   |
| Third      quarter  |   |   | 70.55  |   |   |   | 58.17  |           |   |   | 0.120 |   |
| Fourth      quarter |   |   | 81.64  |   |   |   | 69.69  |           |   |   | 0.120 |   |

|                                                                 |   |                      |      |                   |                   |              |                          | Number      of securities |   |
|----------------------------------------------------------------------|--------|---------------------------|-----------|------------------------|------------------------|-------------------|-------------------------------|---------------------------|--------|
|                                                                 |   |                      |      |                   |                   |              |                          | remaining      available  |   |
|                                                                 |   |                      |      |                   | Weighted-average       |              | for      future issuance      |                      |
|                                                                 |   | Number      of securities |      | exercise      price of |                   | under      equity |                          |
|                                                                 |   | to      be issued upon    |      | outstanding            |                   |              | compensation      plans       |                      |
|                                                                 |   | exercise      of          |      |                   | options,      warrants |              | (excluding      securities    |                      |
| Plan      Category                                                   |   | outstanding      options  |      | and      rights        |                   |              | reflected      in column (a)) |                      |
|                                                                 |   | (a)                       |      |                   | (b)                    |              |                          | (c)                       |   |
| Equity      compensation plans approved by securityholders      |   |                      | 6,175,061 |                   |                   | $                 | 32.98                         |                      |   |   | 6,713,971 |   |
| Equity      compensation plans not approved by security holders |   |                      | -         |                   |                   |              | -                             |                      |   |   | - |   |
| Total                                                                |   |                      | 6,175,061 |                   |                   | $                 | 32.98                         |                      |   |   | 6,713,971 |   |

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|                    |   |   | 12/02  |   |   |   | 12/03  |   |   |   | 12/04  |   |   |   | 12/05  |   |   |   | 12/06  |   |   |   | 12/07  |   |
|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Noble      Energy, Inc. |   |   | 100.00 |   |   |   | 118.88 |   |   |   | 165.66 |   |   |   | 217.40 |   |   |   | 266.26 |   |   |   | 434.46 |   |
| S&P      500        |   |   | 100.00 |   |   |   | 128.68 |   |   |   | 142.69 |   |   |   | 149.70 |   |   |   | 173.34 |   |   |   | 182.87 |   |
| New      Peer Group     |   |   | 100.00 |   |   |   | 129.82 |   |   |   | 174.50 |   |   |   | 278.18 |   |   |   | 276.86 |   |   |   | 403.91 |   |
| Old      Peer Group     |   |   | 100.00 |   |   |   | 129.53 |   |   |   | 170.44 |   |   |   | 267.61 |   |   |   | 260.17 |   |   |   | 375.03 |   |

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| Item      6. | Selected Financial  Data. |
|--------------|---------------------------|

|                                                        |   | Year      Ended December 31,              |       |
|-------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                        |   | 2007                                      |       |   | 2006      (1) |   |   | 2005      (2) |   |   | 2004 |   |   | 2003 |   |
|                                                        |   | (in      thousands, except share amounts) |       |
| Revenues      and Income                                    |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      revenues                                         |   | $                                         | 3,272,030  |   |   | $ | 2,940,082 |   |   | $ | 2,186,723 |   |   | $ | 1,351,051 |   |   | $ | 1,008,226 |   |
| Income      from continuing operations                      |   |                                      | 943,870    |   |   |   | 678,428 |   |   |   | 645,720 |   |   |   | 313,850 |   |   |   | 89,892 |   |
| Net      income                                             |   |                                      | 943,870    |   |   |   | 678,428 |   |   |   | 645,720 |   |   |   | 328,710 |   |   |   | 77,992 |   |
| Per      Share Data                                         |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share -                             |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      from continuing operations                      |   | $                                         | 5.52       |   |   | $ | 3.86 |   |   | $ | 4.20 |   |   | $ | 2.69 |   |   | $ | 0.79 |   |
| Net      income                                             |   |                                      | 5.52       |   |   |   | 3.86 |   |   |   | 4.20 |   |   |   | 2.82 |   |   |   | 0.68 |   |
| Cash      dividends                                         |   |                                      | 0.435      |   |   |   | 0.275 |   |   |   | 0.150 |   |   |   | 0.100 |   |   |   | 0.085 |   |
| Year-end      stock price                                   |   |                                      | 80.66      |   |   |   | 49.07 |   |   |   | 40.30 |   |   |   | 30.83 |   |   |   | 22.22 |   |
| Basic      weighted average shares outstanding              |   |                                      | 171,078    |   |   |   | 175,707 |   |   |   | 153,773 |   |   |   | 116,550 |   |   |   | 113,928 |   |
| Cash      Flows                                             |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by operating activities              |   |                                      | 2,016,573  |   |   |   | 1,730,306 |   |   |   | 1,239,878 |   |   |   | 708,186 |   |   |   | 602,770 |   |
| Additions      to property, plant and equipment             |   |                                      | 1,414,515  |   |   |   | 1,357,039 |   |   |   | 785,610 |   |   |   | 553,643 |   |   |   | 511,434 |   |
| Acquisitions                                                |   |                                      | -          |   |   |   | 412,257 |   |   |   | 1,111,099 |   |   |   | - |   |   |   | - |   |
| Financial      Position                                     |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property,      plant, and equipment, net                    |   | $                                         | 7,944,464  |   |   | $ | 7,170,757 |   |   | $ | 6,198,916 |   |   | $ | 2,180,715 |   |   | $ | 2,046,909 |   |
| Goodwill                                                    |   |                                      | 760,496    |   |   |   | 781,290 |   |   |   | 862,868 |   |   |   | - |   |   |   | - |   |
| Total      assets                                           |   |                                      | 10,830,896 |   |   |   | 9,588,625 |   |   |   | 8,878,033 |   |   |   | 3,435,784 |   |   |   | 2,820,800 |   |
| Long-term      obligations -                                |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      debt                                         |   |                                      | 1,851,087  |   |   |   | 1,800,810 |   |   |   | 2,030,533 |   |   |   | 880,256 |   |   |   | 776,021 |   |
| Deferred      income taxes                                  |   |                                      | 1,983,833  |   |   |   | 1,758,452 |   |   |   | 1,201,191 |   |   |   | 180,415 |   |   |   | 161,912 |   |
| Asset      retirement obligations                           |   |                                      | 130,956    |   |   |   | 127,689 |   |   |   | 278,540 |   |   |   | 175,415 |   |   |   | 101,804 |   |
| Derivative      instruments                                 |   |                                      | 82,803     |   |   |   | 328,875 |   |   |   | 757,509 |   |   |   | 9,678 |   |   |   | 7,400 |   |
| Other      deferred credits and noncurrent liabilities |   |                                      | 337,667    |   |   |   | 274,720 |   |   |   | 279,971 |   |   |   | 69,479 |   |   |   | 72,776 |   |
| Shareholders'      equity                                   |   |                                      | 4,808,807  |   |   |   | 4,113,817 |   |   |   | 3,090,144 |   |   |   | 1,459,988 |   |   |   | 1,073,573 |   |
| Operations      Information                                 |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      gas sales (Mcfpd)                              |   |                                      | 687,444    |   |   |   | 622,927 |   |   |   | 508,195 |   |   |   | 366,965 |   |   |   | 336,611 |   |
| Average      realized price ($/Mcf) (3)                     |   | $                                         | 5.26       |   |   | $ | 5.55 |   |   | $ | 5.78 |   |   | $ | 4.76 |   |   | $ | 4.19 |   |
| Crude      oil sales (Bopd)                                 |   |                                      | 76,581     |   |   |   | 74,915 |   |   |   | 56,958 |   |   |   | 44,481 |   |   |   | 35,101 |   |
| Average      realized price ($/Bbl) (3)                     |   | $                                         | 60.61      |   |   | $ | 54.47 |   |   | $ | 45.35 |   |   | $ | 34.48 |   |   | $ | 27.67 |   |
| Equity      investee sales (Bopd)                           |   |                                      | 7,684      |   |   |   | 8,032 |   |   |   | 3,240 |   |   |   | 894 |   |   |   | 913 |   |
| Average      realized price ($/Bbl)                         |   | $                                         | 55.09      |   |   | $ | 45.83 |   |   | $ | 43.43 |   |   | $ | 32.01 |   |   | $ | 25.47 |   |
| Proved      Reserves                                        |   |                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural      gas reserves (Bcf)                             |   |                                      | 3,307      |   |   |   | 3,231 |   |   |   | 3,091 |   |   |   | 1,987 |   |   |   | 1,642 |   |
| Crude      oil reserves (MMBbl)                             |   |                                      | 329        |   |   |   | 296 |   |   |   | 291 |   |   |   | 193 |   |   |   | 183 |   |
| Total      reserves (MMBoe)                                 |   |                                      | 880        |   |   |   | 835 |   |   |   | 806 |   |   |   | 525 |   |   |   | 457 |   |
| Number      of employees                                    |   |                                      | 1,398      |   |   |   | 1,243 |   |   |   | 1,171 |   |   |   | 559 |   |   |   | 583 |   |

|  (1) | Includes      effect of acquisition of U.S. Exploration and sale of Gulf of Mexico shelf      properties. See Item 8. Financial Statements and Supplementary      Data—Note 3—Acquisitions and Divestitures for additional      information. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes      effect of Patina Merger. See Item 8. Financial Statements and      Supplementary Data—Note 3—Acquisitions and Divestitures for      additional information. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Prices      include effects of oil and gas hedging activities. See Item 8. Financial      Statements and Supplementary Data—Note 12—Derivative Instruments and      Hedging Activities. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Item      7. | Management’s Discussion and Analysis of      Financial Condition and Results of  Operations. |
|--------------|----------------------------------------------------------------------------------------------------|

| EXECUTIVE      OVERVIEW |
|-------------------------|

|   | · | net      income of $944 million, a 39% increase over 2006 net      income; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | diluted      earnings per share of $5.45, a 44% increase over  2006; |
|--------|--------|----------------------------------------------------------------------|

|   | · | cash      flow provided by operating activities of $2.0 billion, a 17% increase over      2006; and |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | completion      of  a $500 million common stock repurchase program begun in      2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | eight      successful exploration wells drilled internationally, six offshore West      Africa and two in the North Sea; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | deepwater      Gulf of Mexico exploration success at Isabela (Mississippi Canyon Block      562); |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | commencement      of production and continued ramp-up at the Dumbarton development and  successful      exploratory appraisal well drilled at the Flyndre prospect in the UK      sector of the North Sea; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | completion      of the Mari-B #7 well and record natural gas sales in    Israel; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | continued      success of development program in the US Wattenberg field;and                                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|   | · | acquisition      of approximately 290,000 net acres onshore US in the Piceance basin,      Niobrara trend and New Albany Shaleareas. |

| 2008      OUTLOOK |
|-------------------|

|   | · | higher      sales of natural gas from the Alba field in Equatorial Guinea;      and |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | growing      production from the D-J and Piceance basins, where we are continuing      active drilling programs;  |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | natural      field decline in the Gulf Coastarea. |
|--------|--------|---------------------------------------------------|

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| Factors      which may impact our expected production profile  include: |
|-------------------------------------------------------------------------|

|   | · | potential      hurricane-related volume curtailments in the Gulf of Mexico and Gulf Coast      areas; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | potential      winter storm-related volume curtailments in the Northern region of our US      operations; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | potential      pipeline and processing facility capacity constraints in the Rocky      Mountain area of our US operations; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | infrastructure      development in Israel; |
|--------|--------|--------------------------------------------|

|   | · | potential      downtime at the methanol, LPG and/or LNG facilities in Equatorial      Guinea; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | seasonal      variations in rainfall in Ecuador that affect our natural gas-to-power      project; and |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | timing      of capital expenditures, as discussed below, which are expected to result      in near-term production. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

| CRITICAL      ACCOUNTING POLICIES AND ESTIMATES |
|-------------------------------------------------|

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| LIQUIDITY      AND CAPITAL RESOURCES |
|--------------------------------------|

| Overview |
|----------|

|   | · | a      $75 million increase in total debt from the balance at      December 31, 2006; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | a      $944 million increase in shareholders’ equity from current year net      income; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|  | · | a      $102 million decrease in shareholders’ equity due to repurchase of      common stock; and |
|--|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | a      $144 million decrease in shareholders’ equity (effected by an      increase in AOCL) primarily related to an increase in deferred hedging      losses. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Summary      cash flow information is asfollows: |
|--------------------------------------------------|

|                                                  |   | Year      Ended December 31, |       |
|-------------------------------------------------------|--------|------------------------------|------------|
|                                                  |   | 2007                         |       |   | 2006 |   |   | 2005 |   |
|                                                  |   |  (in      thousands)    |       |
| Total      cash provided by (used in):                |   |                         |       |   |   |   |   |   |   |
| Operating      activities                             |   | $                            | 2,016,573  |   |   | $ | 1,730,306 |   |   | $ | 1,239,878 |   |
| Investing      activities                             |   |                         | (1,403,089 | ) |   |   | (1,098,339 | ) |   |   | (1,892,488 | ) |
| Financing      activities                             |   |                         | (107,029   | ) |   |   | (588,880 | ) |   |   | 583,137 |   |
| Increase      (decrease) in cash and cash equivalents |   | $                            | 506,455    |   |   | $ | 43,087 |   |   | $ | (69,473 | ) |

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| Acquisition,      Capital and Other ExplorationExpenditures |
|-------------------------------------------------------------|

|                                                         |   | Year      Ended December 31, |            |
|--------------------------------------------------------------|--------|------------------------------|-----------------|
|                                                         |   | 2007                         |            |   | 2006 |   |   | 2005 |   |
|                                                         |   | (in      thousands)          |            |
| Acquisition,      Capital and Other Exploration Expenditures |   |                         |            |   |   |   |   |   |   |
| Lease      acquisition of unproved property                  |   | $                            | 145,326         |   |   | $ | 53,652 |   |   | $ | 16,793 |   |
| Exploration      expenditures                                |   |                         | 371,758         |   |   |   | 203,035 |   |   |   | 161,515 |   |
| Development      expenditures                                |   |                         | 1,185,385       |   |   |   | 1,054,780 |   |   |   | 662,585 |   |
| Corporate      and other expenditures                        |   |                         | 36,361          |   |   |   | 35,069 |   |   |   | 21,478 |   |
| Total      consolidated capital expenditures                 |   |                         | 1,738,830       |   |   |   | 1,346,536 |   |   |   | 862,371 |   |
| Our      share of equity investee development costs          |   |                         | 516             |   |   |   | 580 |   |   |   | 27,639 |   |
|  Total                                                  |   | $                            | 1,739,346  |   |   | $ | 1,347,116  |   |   | $ | 890,010  |   |

| Insurance      Recoveries |
|---------------------------|

| Financing      Activities |
|---------------------------|

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| Contractual      Obligations |
|------------------------------|

|                                               |   | Payments      Due by Period |      |
|----------------------------------------------------|--------|-----------------------------|-----------|
|                                               |   |                        |      |   |   |   |   | 2009 |   |   | 2011 |   |   | 2013 |   |
|                                               |   | Total                       |      |   | 2008 |   |   | and      2010 |   |   | and      2012 |   |   | and      Beyond |   |
|                                               |   | (in      thousands)         |      |
| Long-term      debt (excludes interest) (1)        |   | $                           | 1,880,000 |   |   | $ | 25,000 |   |   | $ | 25,000 |   |   | $ | 1,180,000 |   |   | $ | 650,000 |   |
| Drilling      and equipment obligations (2)      : |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| United      States drilling and equipment          |   |                        | 462,759   |   |   |   | 181,337 |   |   |   | 173,935 |   |   |   | 107,487 |   |   |   | - |   |
| International      drilling and equipment          |   |                        | 68,170    |   |   |   | 68,170 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase      obligations (3)                      |   |                        | 194,419   |   |   |   | 194,419 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Throughput      agreement (4)                      |   |                        | 95,000    |   |   |   | - |   |   |   | 38,000 |   |   |   | 38,000 |   |   |   | 19,000 |   |
| Operating      lease obligations (5)      :        |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office      buildings and facilities               |   |                        | 52,894    |   |   |   | 7,289 |   |   |   | 14,495 |   |   |   | 13,247 |   |   |   | 17,863 |   |
| Oil      and gas operations equipment              |   |                        | 12,074    |   |   |   | 5,467 |   |   |   | 6,607 |   |   |   | - |   |   |   | - |   |
| Other      long-term liabilities (6)      :        |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset      retirement obligations (7)              |   |                        | 144,288   |   |   |   | 13,332 |   |   |   | 12,443 |   |   |   | 13,034 |   |   |   | 105,479 |   |
| Derivative      instruments (8)                    |   |                        | 603,133   |   |   |   | 525,159 |   |   |   | 77,974 |   |   |   | - |   |   |   | - |   |
| Total      contractual obligations                 |   | $                           | 3,512,737 |   |   | $ | 1,020,173 |   |   | $ | 348,454 |   |   | $ | 1,351,768 |   |   | $ | 792,342 |   |

| (1) | Based      on the total debt balance outstanding at December 31, 2007, scheduled      maturities and interest rates in effect at December 31, 2007, our cash      payments for interest would be $109 million in 2008,      $108 million in 2009, $107 million in 2010, $107 million in      2011, $107 million in 2012 and $990 million for the remaining years for a      total of $1.5 billion. See Item 8. Financial Statements and      Supplementary Data—Note 7—Debt for additional information regarding our      long-term debt obligations. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Drilling      and equipment obligations represent contractual agreements with third      party service providers to procure drilling rigs and other related      equipment for developmental and exploratory drilling      facilities.  See Item 8. Financial Statements and Supplementary      Data—Note 14—Commitments and Contingencies for additional information      regarding our drilling and equipment  obligations. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (3) | Purchase      obligations represent agreements to purchase goods or services that are      enforceable, are legally binding and specify all significant terms,      including fixed and minimum quantities to be purchased; fixed, minimum or      variable price provisions; and the approximate timing of the transaction.      See Item 8. Financial Statements and Supplementary Data—Note      14—Commitments and Contingencies for additional information regarding our      purchase obligations. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | In      January 2007, we entered into a five-year throughput agreement. The      transporting pipeline is expected to be completed and operational in      2009.  See Item 8. Financial Statements and Supplementary      Data—Note 14—Commitments and Contingencies for additional information      regarding our throughput agreement. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (5) | Operating      lease obligations represent non-cancelable leases for office buildings and      facilities and oil and gas operations equipment used in our daily      operations. See Item 8. Financial Statements and Supplementary      Data |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | —Note      14—Commitments and Contingencies for additional information regarding our      operating lease obligations. |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

| (6) | The      table does not include our deferred compensation liabilities of $225      million and our accrued benefit costs of $51 million as specific payment      dates are unknown. See Item 8. Financial Statements and Supplementary      Data—Note 11—Benefit Plans for additional information on our deferred      compensation liability and our accrued benefit  costs. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Asset      retirement obligations are discounted. See Item 8. Financial Statements      and Supplementary Data—Note 6—Asset Retirement Obligations for additional      information on our asset retirementobligations. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | See      Item 8. Financial Statements and Supplementary Data—Note 12—Derivative      Instruments and Hedging Activities for additional information on our      derivative instrument obligations. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Other |
|-------|

| RESULTS      OF OPERATIONS |
|----------------------------|

| Net      Income |
|-----------------|

|   | · | a      $332 million, or 11%, increase in total revenues, due primarily to      higher average realized crude oil prices and higher average realized US      natural gas prices and an increase in income from equity method      investees; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      $395 million decrease in loss on derivative instruments; and  |
|--------|--------|---------------------------------------------------------------------------|

|   | offset      by: |
|--------|-----------------|

|   | · | a      $208 million decrease in gains from assetsales; |
|--------|--------|--------------------------------------------------------|

|   | · | a      $105 million increase in DD&Aexpense; |
|--------|--------|--------------------------------------------------|

|   | · | a      $51 million loss on involuntary conversion expense;  and |
|--------|--------|-----------------------------------------------------------------|

|   | · | a      $51 million increase in oil and gas exploration  expense. |
|--------|--------|------------------------------------------------------------------|

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|   | · | a      $753 million, or 34%, increase in total revenues, driven primarily by      a full year of Patina operations and nine months of U.S. Exploration      operations and higher average realized oil  prices; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase of $215 million in gains from asset sales;  |
|--------|--------|------------------------------------------------------------------------|

|   | · | an      increase in loss on derivative instruments of $360 million;      and |
|--------|--------|-----------------------------------------------------------------------------------|
|   | · | a      $232 million increase in DD&Aexpense.                                  |

| Natural      Gas Information |
|------------------------------|

|                   |   | Year      Ended December 31, |      |
|------------------------|--------|------------------------------|-----------|
|                   |   | 2007                         |      |   | 2006 |   |   | 2005 |   |
|                   |   | (in      thousands)          |      |
| Natural      gas sales |   | $                            | 1,271,866 |   |   | $ | 1,211,782 |   |   | $ | 1,023,644 |   |

|                     |   | Year      Ended December 31, |    |
|--------------------------|--------|------------------------------|---------|
|                     |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                     |   | Mcfpd                        |    |   | $/Mcf |   |   | Mcfpd |   |   | $/Mcf |   |   | Mcfpd |   |   | $/Mcf |   |
| United      States (1)   |   |                         | 412,212 |   |   | $ | 7.51 |   |   |   | 451,712 |   |   | $ | 6.61 |   |   |   | 343,953 |   |   | $ | 7.43 |   |
| West      Africa (2)     |   |                         | 132,464 |   |   |   | 0.29 |   |   |   | 45,422 |   |   |   | 0.37 |   |   |   | 65,581 |   |   |   | 0.25 |   |
| North      Sea           |   |                         | 6,235   |   |   |   | 6.54 |   |   |   | 8,130 |   |   |   | 8.00 |   |   |   | 9,299 |   |   |   | 5.93 |   |
| Israel                   |   |                         | 110,820 |   |   |   | 2.79 |   |   |   | 92,894 |   |   |   | 2.72 |   |   |   | 66,377 |   |   |   | 2.68 |   |
| Ecuador      (3)         |   |                         | 25,713  |   |   |   | - |   |   |   | 24,475 |   |   |   | - |   |   |   | 22,795 |   |   |   | - |   |
| Other      International |   |                         | -       |   |   |   | - |   |   |   | 294 |   |   |   | 0.96 |   |   |   | 190 |   |   |   | 1.10 |   |
| Total                    |   |                         | 687,444 |   |   | $ | 5.26 |   |   |   | 622,927 |   |   | $ | 5.55 |   |   |   | 508,195 |   |   | $ | 5.78 |   |

| (1) | Reflects      an increase of $1.12 per Mcf in 2007 and reductions of $0.25 per Mcf in      2006 and $0.77 per Mcf in 2005 from hedging  activities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Natural      gas from the Alba field in Equatorial Guinea is under contract for $0.25      per MMBtu to a methanol plant, an LPG plant and an LNG facility. The      methanol and LPG plants are owned by affiliated entities accounted for      under the equity method of accounting. The volumes sold by the LPG plant      are included in the table below under crude oil information. Natural gas      volumes include sales to an LNG facility of 78,090 Mcfpd 2007; there were      no natural gas sales to the LNG facility before 2007. The natural gas sold      to the LNG facility and methanol plant has a lower Btu content than the      natural gas sold to the LPG plant. As a result of the natural gas      volumes sold to the LNG plant in 2007, the average price received on an      Mcf basis is lower.  For 2007 and 2006, the price on an Mcf basis has      been adjusted to reflect the Btu content on gas  sales. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The      natural gas-to-power project in Ecuador is 100% owned by one of our      subsidiaries, and intercompany natural gas sales are eliminated for      accounting purposes. Electricity sales included in total revenues totaled      $71 million in 2007, $72 million in 2006 and $74 million in      2005. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Crude      Oil Information |
|----------------------------|

|                 |   | Year      Ended December 31, |      |
|----------------------|--------|------------------------------|-----------|
|                 |   | 2007                         |      |   | 2006 |   |   | 2005 |   |
|                 |   | (in      thousands)          |      |
| Crude      oil sales |   | $                            | 1,694,233 |   |   | $ | 1,489,459 |   |   | $ | 942,778 |   |

|                               |   | Year      Ended December 31, |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   |   2007             |   |   2006 |   |   |  2005 |   |
|                               |   | Production      (1)          |   | Sales |   | Production      (1) |   |   | Sales |   |   | Sales      (2) |   |
|                               |   | Bopd                         |   | Bopd |   | $/Bbl |   | Bopd |   |   | Bopd |   | $/Bbl |   |   | Bopd |   | $/Bbl |   |
| United      States (3)             |   |                         | 42,332 |   | 42,332 |   | $ | 53.22 |   | 45,798 |   |   | 45,798 |   | $ | 50.68 |   |   | 25,941 |   | $ | 46.67 |   |
| West      Africa (4)               |   |                         | 15,523 |   | 15,070 |   |   | 71.27 |   | 17,326 |   |   | 17,860 |   |   | 62.51 |   |   | 17,786 |   |   | 42.51 |   |
| North      Sea                     |   |                         | 12,813 |   | 12,505 |   |   | 76.47 |   | 3,988 |   |   | 3,717 |   |   | 67.43 |   |   | 5,380 |   |   | 52.68 |   |
| Other      International (5)       |   |                         | 6,806  |   | 6,674 |   |   | 53.69 |   | 7,491 |   |   | 7,540 |   |   | 52.05 |   |   | 7,851 |   |   | 42.37 |   |
| Total      Consolidated Operations |   |                         | 77,474 |   | 76,581 |   |   | 60.61 |   | 74,603 |   |   | 74,915 |   |   | 54.47 |   |   | 56,958 |   |   | 45.35 |   |
| Equity      Investees      (6)     |   |                         | 8,014  |   | 7,684 |   |   | 55.09 |   | 7,531 |   |   | 8,032 |   |   | 45.83 |   |   | 3,240 |   |   | 43.43 |   |
| Total                              |   |                         | 85,488 |   | 84,265 |   | $ | 60.10 |   | 82,134 |   |   | 82,947 |   | $ | 53.64 |   |   | 60,198 |   | $ | 45.25 |   |

----

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| (1) | The      variance between production and sales volumes is attributable to the      timing of liquid hydrocarbon tankerliftings. |
|-----|---------------------------------------------------------------------------------------------------------------------------------|

| (2) | Sales      volumes equal production volumes in2005. |
|-----|-----------------------------------------------------|

| (3) | Reflects      reductions of $13.68 per Bbl in 2007, $11.41 per Bbl in 2006 and $8.03 per      Bbl in 2005 from hedgingactivities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (4) | Reflects      reductions of $2.19 per Bbl in 2007 and $9.93 per Bbl in 2005 from hedging      activities. We did not hedge West Africa crude oil sales in      2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Other      international includes China andArgentina. |
|-----|-------------------------------------------------------|

| (6) | Volumes      represent sales of condensate and LPG from the Alba plant in Equatorial      Guinea. LPG sales volumes totaled 5,848 Bopd in 2007, 6,294 Bopd in 2006      and 2,328 Bopd in 2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Commodity      Derivative Instruments and HedgingActivities |
|-------------------------------------------------------------|

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|                                         |   | Year      Ended December 31, |    |
|----------------------------------------------|--------|------------------------------|---------|
|                                         |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
| Net      income (in thousands):              |   |                         |    |   |   |   |   |   |   |
| AMPCO      and affiliates                    |   | $                            | 82,877  |   |   | $ | 38,024 |   |   | $ | 56,896 |   |
| Alba      Plant                              |   |                         | 128,051 |   |   |   | 101,338 |   |   |   | 33,916 |   |
| Distributions/dividends      (in thousands): |   |                         |    |   |   |   |   |   |   |   |   |   |
| AMPCO      and affiliates                    |   |                         | 96,483  |   |   |   | 37,350 |   |   |   | 59,625 |   |
| Alba      Plant                              |   |                         | 132,251 |   |   |   | 155,158 |   |   |   | - |   |
| Sales      volumes (1):                      |   |                         |    |   |   |   |   |   |   |   |   |   |
| Methanol      (Kgal)                         |   |                         | 160,540 |   |   |   | 109,942 |   |   |   | 162,446 |   |
| Condensate      (Bopd)                       |   |                         | 1,836   |   |   |   | 1,738 |   |   |   | 912 |   |
| LPG      (Bpd)                               |   |                         | 5,848   |   |   |   | 6,294 |   |   |   | 2,328 |   |
| Production      volumes (1):                 |   |                         |    |   |   |   |   |   |   |   |   |   |
| Condensate      (Bopd)                       |   |                         | 1,860   |   |   |   | 1,730 |   |   |   | 912 |   |
| LPG      (Bpd)                               |   |                         | 6,148   |   |   |   | 5,801 |   |   |   | 2,328 |   |
| Average      realized prices:                |   |                         |    |   |   |   |   |   |   |   |   |   |
| Methanol      (per gallon)                   |   | $                            | 1.09    |   |   | $ | 0.90 |   |   | $ | 0.77 |   |
| Condensate      (per Bbl)                    |   |                         | 74.87   |   |   |   | 66.60 |   |   |   | 55.76 |   |
| LPG      (per Bbl)                           |   |                         | 48.87   |   |   |   | 40.10 |   |   |   | 38.63 |   |

| (1) | The      variance between production and sales volumes is attributable to the      timing of liquid hydrocarbon tankerliftings. |
|-----|---------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                      |   |                      |    |   | United |   |    | West   |   |   | North  |   |   |   |   |   | Other      Int'l/  |   |
|-------------------------------------------|--------|---------------------------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
|                                      |   | Total                     |    |   | States |   |    | Africa |   |   | Sea    |   |   | Israel |   |   | Corporate      (2) |   |
|                                      |   | (in      thousands)  |    |
| Year      Ended December 31, 2007         |   |                 |    |
| Oil      and gas operating costs      (1) |   | $                         | 299,622 |   |   | $      | 190,723 |   |   | $      | 39,222 |   |   | $      | 37,987 |   |               | $      | 7,712 |   |   | $ | 23,978 |   |
| Workover      and repair expense          |   |                      | 22,830  |   |   |   | 22,516  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | 314 |   |
| Lease      operating expense              |   |                      | 322,452 |   |   |   | 213,239 |   |   |   | 39,222 |   |   |   | 37,987 |   |               |   | 7,712 |   |   |   | 24,292 |   |
| Production      and ad valorem taxes      |   |                      | 113,547 |   |   |   | 91,225  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | 22,322 |   |
| Transportation      expense               |   |                      | 51,699  |   |   |   | 39,542  |   |   |   | -      |   |   |   | 10,523 |   |               |   | - |   |   |   | 1,634 |   |
| Total      production costs               |   | $                         | 487,698 |   |   | $      | 344,006 |   |   | $      | 39,222 |   |   | $      | 48,510 |   |               | $      | 7,712 |   |   | $ | 48,248 |   |
| Year      Ended December 31, 2006         |   |                      |    |   |   |   |    |   |   |   |   |   |   |   |   |   |               |   |   |   |   |   |   |   |
| Oil      and gas operating costs      (1) |   | $                         | 270,136 |   |   | $      | 205,348 |   |   | $      | 26,557 |   |   | $      | 11,655 |   |               | $      | 9,066 |   |   | $ | 17,510 |   |
| Workover      and repair expense          |   |                      | 46,951  |   |   |   | 46,793  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | 158 |   |
| Lease      operating expense              |   |                      | 317,087 |   |   |   | 252,141 |   |   |   | 26,557 |   |   |   | 11,655 |   |               |   | 9,066 |   |   |   | 17,668 |   |
| Production      and ad valorem taxes      |   |                      | 108,979 |   |   |   | 85,960  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | 23,019 |   |
| Transportation      expense               |   |                      | 28,542  |   |   |   | 20,728  |   |   |   | -      |   |   |   | 7,010  |   |               |   | - |   |   |   | 804 |   |
| Total      production costs               |   | $                         | 454,608 |   |   | $      | 358,829 |   |   | $      | 26,557 |   |   | $      | 18,665 |   |               | $      | 9,066 |   |   | $ | 41,491 |   |
| Year      Ended December 31, 2005         |   |                      |    |   |   |   |    |   |   |   |   |   |   |   |   |   |               |   |   |   |   |   |   |   |
| Oil      and gas operating costs      (1) |   | $                         | 203,833 |   |   | $      | 136,087 |   |   | $      | 30,661 |   |   | $      | 12,244 |   |               | $      | 8,504 |   |   | $ | 16,337 |   |
| Workover      and repair expense          |   |                      | 14,027  |   |   |   | 13,734  |   |   |   | -      |   |   |   | 259    |   |               |   | - |   |   |   | 34 |   |
| Lease      operating expense              |   |                      | 217,860 |   |   |   | 149,821 |   |   |   | 30,661 |   |   |   | 12,503 |   |               |   | 8,504 |   |   |   | 16,371 |   |
| Production      and ad valorem taxes      |   |                      | 78,703  |   |   |   | 65,428  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | 13,275 |   |
| Transportation      expense               |   |                      | 16,764  |   |   |   | 9,350   |   |   |   | -      |   |   |   | 6,562  |   |               |   | - |   |   |   | 852 |   |
| Total      production costs               |   | $                         | 313,327 |   |   | $      | 224,599 |   |   | $      | 30,661 |   |   | $      | 19,065 |   |               | $      | 8,504 |   |   | $ | 30,498 |   |

| (1) | Oil      and gas operating costs include labor, fuel, repairs, replacements,      saltwater disposal and other related lifting  costs. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Other      international includes Ecuador, China and  Argentina. |
|-----|------------------------------------------------------------------|

----

Table of Contents

|                                        |   | Year      Ended December 31, |   |
|---------------------------------------------|--------|------------------------------|--------|
|                                        |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
| Oil      and gas operating  costs |   | $                            | 4.29   |   |   | $ | 4.14 |   |   | $ | 3.94 |   |
| Workover      and repair expense            |   |                         | 0.33   |   |   |   | 0.72 |   |   |   | 0.27 |   |
| Lease      operating costs                  |   |                         | 4.62   |   |   |   | 4.86 |   |   |   | 4.21 |   |
| Production      and ad valorem taxes        |   |                         | 1.63   |   |   |   | 1.67 |   |   |   | 1.52 |   |
| Transportation      expense                 |   |                         | 0.74   |   |   |   | 0.44 |   |   |   | 0.33 |   |
| Total      production costs (1)      (2)    |   | $                            | 6.99   |   |   | $ | 6.97 |   |   | $ | 6.06 |   |

| (1) | Consolidated      unit rates exclude sales volumes and costs attributable to equity method      investees.                                                                                                           |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Sales      volumes include natural gas sales to an LNG facility in Equatorial Guinea      that began late first quarter of 2007. The inclusion of these volumes      reduced the unit rate by $0.51 per BOE for2007. |

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Table of Contents

| Oil and Gas Exploration      Expense—Exploration expense was as  follows: |
|---------------------------------------------------------------------------------|

|                              |   |                |    |   | United |   |    | West   |   |   | North  |   |   |   |   |   | Other      Int'l/  |   |
|-----------------------------------|--------|---------------------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
|                              |   | Total               |    |   | States |   |    | Africa |   |   | Sea    |   |   | Israel |   |   | Corporate      (1) |   |
|                              |   | (in      thousands) |    |
| Year      Ended December 31, 2007 |   |                |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Dry      hole expense             |   | $                   | 90,210  |   |   | $      | 49,473  |   |   | $      | 40,399 |   |   | $      | 5      |   |               | $      | - |   |   | $ | 333 |   |
| Unproved      lease amortization  |   |                | 16,013  |   |   |   | 15,176  |   |   |   | -      |   |   |   | 103    |   |               |   | - |   |   |   | 734 |   |
| Seismic                           |   |                | 64,856  |   |   |   | 55,258  |   |   |   | 939    |   |   |   | 8,184  |   |               |   | 691 |   |   |   | (216 | ) |
| Staff      expense                |   |                | 45,030  |   |   |   | 11,900  |   |   |   | 2,106  |   |   |   | 8,318  |   |               |   | 645 |   |   |   | 22,061 |   |
| Other                             |   |                | 2,973   |   |   |   | 2,423   |   |   |   | 100    |   |   |   | 340    |   |               |   | 82 |   |   |   | 28 |   |
| Total      exploration expense    |   | $                   | 219,082 |   |   | $      | 134,230 |   |   | $      | 43,544 |   |   | $      | 16,950 |   |               | $      | 1,418 |   |   | $ | 22,940 |   |
| Year      Ended December 31, 2006 |   |                |    |   |   |   |    |   |   |   |   |   |   |   |   |   |               |   |   |   |   |
| Dry      hole expense             |   | $                   | 70,325  |   |   | $      | 66,150  |   |   | $      | 46     |   |   | $      | 4,129  |   |               | $      | - |   |   | $ | - |   |
| Unproved      lease amortization  |   |                | 18,836  |   |   |   | 18,823  |   |   |   | -      |   |   |   | 13     |   |               |   | - |   |   |   | - |   |
| Seismic                           |   |                | 37,676  |   |   |   | 29,320  |   |   |   | 4,204  |   |   |   | 685    |   |               |   | 3 |   |   |   | 3,464 |   |
| Staff      expense                |   |                | 38,861  |   |   |   | 12,710  |   |   |   | 2,887  |   |   |   | 4,816  |   |               |   | 250 |   |   |   | 18,198 |   |
| Other                             |   |                | 2,226   |   |   |   | 1,083   |   |   |   | 192    |   |   |   | 879    |   |               |   | 33 |   |   |   | 39 |   |
| Total      exploration expense    |   | $                   | 167,924 |   |   | $      | 128,086 |   |   | $      | 7,329  |   |   | $      | 10,522 |   |               | $      | 286 |   |   | $ | 21,701 |   |
| Year      Ended December 31, 2005 |   |                |    |   |   |   |    |   |   |   |   |   |   |   |   |   |               |   |   |   |   |
| Dry      hole expense             |   | $                   | 98,015  |   |   | $      | 95,678  |   |   | $      | 1,403  |   |   | $      | 932    |   |               | $      | 2 |   |   | $ | - |   |
| Unproved      lease amortization  |   |                | 17,855  |   |   |   | 17,855  |   |   |   | -      |   |   |   | -      |   |               |   | - |   |   |   | - |   |
| Seismic                           |   |                | 21,761  |   |   |   | 11,631  |   |   |   | 316    |   |   |   | 1,544  |   |               |   | - |   |   |   | 8,270 |   |
| Staff      expense                |   |                | 34,945  |   |   |   | 16,255  |   |   |   | 3,760  |   |   |   | 2,690  |   |               |   | 189 |   |   |   | 12,051 |   |
| Other                             |   |                | 5,850   |   |   |   | 4,974   |   |   |   | (16    | )      |   |   | 819    |   |               |   | 32 |   |   |   | 41 |   |
| Total      exploration expense    |   | $                   | 178,426 |   |   | $      | 146,393 |   |   | $      | 5,463  |   |   | $      | 5,985  |   |               | $      | 223 |   |   | $ | 20,362 |   |

| (1) | Other      international includes Ecuador, China, Argentina and    Surname. |
|-----|-----------------------------------------------------------------------------|

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Table of Contents

|                                            |   | Year      Ended December 31, |    |
|-------------------------------------------------|--------|------------------------------|---------|
|                                            |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                                            |   | (in      thousands)          |    |
| United      States                              |   | $                            | 574,001 |   |   | $ | 543,431 |   |   | $ | 311,153 |   |
| West      Africa                                |   |                         | 25,315  |   |   |   | 23,620 |   |   |   | 27,121 |   |
| North      Sea                                  |   |                         | 79,450  |   |   |   | 8,123 |   |   |   | 9,888 |   |
| Israel                                          |   |                         | 17,842  |   |   |   | 13,947 |   |   |   | 11,188 |   |
| Other      International, corporate, and other  |   |                         | 31,373  |   |   |   | 33,487 |   |   |   | 31,194 |   |
| Total      DD&A expense                     |   | $                            | 727,981 |   |   | $ | 622,608 |   |   | $ | 390,544 |   |
| Unit      rate of DD&A per BOE (1)      (2) |   | $                            | 10.43   |   |   | $ | 9.54 |   |   | $ | 7.55 |   |

| (1) | Consolidated      unit rates exclude sales volumes and costs attributable to equity method      investees.                                                                                                                 |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Sales      volumes include natural gas sales to an LNG facility in Equatorial Guinea      that began late first quarter of 2007. The inclusion of these volumes      reduced the unit rate by $0.62 per BOE      for 2007. |

| General and Administrative      Expense—General and administrative (“G&A”) expense was as      follows: |
|-------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   | Year      Ended December 31, |    |
|--------------------------------------------------------|--------|------------------------------|---------|
|                                                   |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
| General      and administrative expense (in thousands) |   | $                            | 206,378 |   |   | $ | 164,541 |   |   | $ | 100,125 |   |
| Unit      rate per BOE (1)      (2)                    |   | $                            | 2.96    |   |   | $ | 2.52 |   |   | $ | 1.94 |   |

| (1) | Consolidated      unit rates exclude sales volumes and costs attributable to equity method      investees.                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Sales      volumes include natural gas sales to an LNG facility in Equatorial Guinea      that began late first quarter of 2007. The inclusion of these volumes      reduced the unit rate by $0.21 per BOE for2007. |

----

Table of Contents

|                       |   | Year      Ended December 31, |    |
|----------------------------|--------|------------------------------|---------|
|                       |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                       |   | (in      thousands)          |    |
| Interest      expense, net |   | $                            | 112,957 |   |   | $ | 117,045 |   |   | $ | 87,541 |   |
| Capitalized      interest  |   |                         | 16,595  |   |   |   | 12,515 |   |   |   | 8,684 |   |

|                                                    |   | Year      Ended December 31, |    |
|---------------------------------------------------------|--------|------------------------------|---------|
|                                                    |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
| Electricity      sales (in thousands)                   |   | $                            | 70,916  |   |   | $ | 71,603 |   |   | $ | 74,228 |   |
| Electricity      generation expense (in thousands) |   |                         | 56,552  |   |   |   | 59,494 |   |   |   | 53,137 |   |
| Operating      income (in thousands)                    |   |                         | 14,364  |   |   |   | 12,109 |   |   |   | 21,091 |   |
| Power      generation (MW)                              |   |                         | 911,830 |   |   |   | 865,983 |   |   |   | 799,160 |   |
| Average      power price ($/Kwh)                        |   | $                            | 0.078   |   |   | $ | 0.083 |   |   | $ | 0.093 |   |

----

Table of Contents

|              |   | Year      Ended December 31, |   |
|-------------------|--------|------------------------------|--------|
|              |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|              |   | (in      thousands)          |
| GMP      proceeds |   | $                            | 24,087 |   |   | $ | 27,876 |   |   | $ | 55,261 |   |
| GMP      expenses |   |                         | 17,539 |   |   |   | 18,664 |   |   |   | 28,067 |   |
| Gross      margin |   | $                            | 6,548  |   |   | $ | 9,212 |   |   | $ | 27,194 |   |

| Income Taxes—The income      tax provision was as follows: |
|------------------------------------------------------------------|

|                                     |   | Year      Ended December 31, |    |
|------------------------------------------|--------|------------------------------|---------|
|                                     |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
| Income      tax provision (in thousands) |   | $                            | 423,697 |   |   | $ | 417,789 |   |   | $ | 322,940 |   |
| Effective      rate                      |   |                         | 31.0    | % |   |   | 38.1 | % |   |   | 33.3 | % |

----

Table of Contents

| Item      7A. | Quantitative and Qualitative Disclosures      About Market Risk. |
|---------------|------------------------------------------------------------------|

| Interest      Rate Risk |
|-------------------------|

| Foreign      Currency Risk |
|----------------------------|

----

Table of Contents

| Item      8. | Financial Statements and Supplementary      Data. |
|--------------|---------------------------------------------------|

| Consolidated      Financial Statements of Noble Energy, Inc.                                                                       |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                    |   |
| Management’s Report on Internal      Control over Financial Reporting                                                             | 51     |
|                                                                                                                                    |   |
| Report of Independent Registered Public      Accounting Firm (Financial Statements)                                                     | 52     |
|                                                                                                                                    |   |
| Report of Independent Registered Public      Accounting Firm (Internal Control Over Financial      Reporting)                           | 53     |
|                                                                                                                                    |   |
| Consolidated Balance Sheets as of      December 31, 2007 and 2006                                                                  | 54     |
|                                                                                                                                    |   |
| Consolidated Statements of      Operations for each of the three years in the period ended      December 31, 2007                  | 55     |
|                                                                                                                                    |   |
| Consolidated Statements of Cash Flows for      each of the three years in the period ended December 31,      2007                  | 56     |
|                                                                                                                                    |   |
| Consolidated Statements of      Shareholders’ Equity for each of the three years in the period ended      December 31, 2007  | 57     |
|                                                                                                                                    |   |
| Consolidated Statements of      Comprehensive Income (Loss) for each of the three years in the period      ended December 31, 2007 | 58     |
|                                                                                                                                    |   |
| Notes to Consolidated Financial      Statements                                                                                         | 59     |
|                                                                                                                                    |   |
| Supplemental Oil and Gas Information      (Unaudited)                                                                                   | 93     |
|                                                                                                                                    |   |
| Supplemental Quarterly Financial      Information (Unaudited)                                                                           | 102    |

----

Table of Contents

Management’s Report on Internal Control overFinancial Reporting

----

Table of Contents

Report of Independent Registered Public AccountingFirm

----

Table of Contents

Report of Independent Registered Public AccountingFirm

|                   | KPMG      LLP |
|------------------------|---------------|
|                   |          |
| Houston,      Texas    |          |
| February      25, 2008 |          |

----

Table of Contents

| Noble      Energy, Inc. and Subsidiaries                                                                                                       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Consolidated Balance      Sheets                                                                                                               |   |
| (in      thousands, except share amounts)                                                                                                      |   |
|                                                                                                                                           |   |   |   |   |   |   |
|                                                                                                                                           |   | December      31, |   |
|                                                                                                                                           |   | 2007 |   |   | 2006 |   |
| ASSETS                                                                                                                                         |   |   |   |   |   |   |
| Current      Assets                                                                                                                            |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                 |   | $ | 659,863 |   |   | $ | 153,408 |   |
| Accounts      receivable - trade, net                                                                                                          |   |   | 594,009 |   |   |   | 586,882 |   |
| Deferred      income taxes                                                                                                                     |   |   | 130,571 |   |   |   | 99,835 |   |
| Assets      held for sale                                                                                                                      |   |   | 82,122 |   |   |   | 164 |   |
| Probable      insurance claims                                                                                                                 |   |   | 2,184 |   |   |   | 101,233 |   |
| Other      current assets                                                                                                                      |   |   | 100,518 |   |   |   | 127,024 |   |
|    Total      current assets                                                                                                    |   |   | 1,569,267 |   |   |   | 1,068,546 |   |
| Property,      plant and equipment                                                                                                             |   |   |   |   |   |   |   |   |
| Oil      and gas properties (successful efforts method of    accounting)                                                                       |   |   | 10,216,484 |   |   |   | 8,867,639 |   |
| Other      property, plant and equipment                                                                                                       |   |   | 112,339 |   |   |   | 79,646 |   |
|                                                                                                                                           |   |   | 10,328,823 |   |   |   | 8,947,285 |   |
| Accumulated      depreciation, depletion and amortization                                                                                      |   |   | (2,384,359 | ) |   |   | (1,776,528 | ) |
| Total      property, plant and equipment, net                                                                                                  |   |   | 7,944,464 |   |   |   | 7,170,757 |   |
| Other      noncurrent assets                                                                                                                   |   |   | 556,669 |   |   |   | 568,032 |   |
| Goodwill                                                                                                                                       |   |   | 760,496 |   |   |   | 781,290 |   |
| Total      Assets                                                                                                                              |   | $ | 10,830,896 |   |   | $ | 9,588,625 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS’ EQUITY                                                                                                |   |   |   |   |   |   |   |   |
| Current      Liabilities                                                                                                                       |   |   |   |   |   |   |   |   |
| Accounts      payable - trade                                                                                                                  |   | $ | 780,915 |   |   | $ | 518,609 |   |
| Derivative      instruments                                                                                                                    |   |   | 540,217 |   |   |   | 254,625 |   |
| Income      taxes                                                                                                                              |   |   | 51,785 |   |   |   | 107,136 |   |
| Current      installment of long-term debt                                                                                                     |   |   | 25,000 |   |   |   | - |   |
| Asset      retirement obligations                                                                                                              |   |   | 13,332 |   |   |   | 68,500 |   |
| Other      current liabilities                                                                                                                 |   |   | 224,494 |   |   |   | 235,392 |   |
|   Total      current liabilities                                                                                                     |   |   | 1,635,743 |   |   |   | 1,184,262 |   |
| Deferred      income taxes                                                                                                                     |   |   | 1,983,833 |   |   |   | 1,758,452 |   |
| Asset      retirement obligations                                                                                                              |   |   | 130,956 |   |   |   | 127,689 |   |
| Derivative      instruments                                                                                                                    |   |   | 82,803 |   |   |   | 328,875 |   |
| Other      noncurrent liabilities                                                                                                              |   |   | 337,667 |   |   |   | 274,720 |   |
| Long-term      debt                                                                                                                            |   |   | 1,851,087 |   |   |   | 1,800,810 |   |
| Total      Liabilities                                                                                                                         |   |   | 6,022,089 |   |   |   | 5,474,808 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| Commitments      and Contingencies                                                                                                             |   |   |   |   |   |   |   |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| Shareholders’      Equity                                                                                                                |   |   |   |   |   |   |   |   |
| Preferred      stock - par      value $1.00;      4,000,000 shares authorized,none      issued                                                 |   |   | - |   |   |   | - |   |
| Common      stock - par      value $3.33 1/3; 250,000,000 shares authorized;      190,814,309 and      188,808,087 shares issued, respectively |   |   | 636,046 |   |   |   | 629,360 |   |
| Capital      in excess of par value                                                                                                            |   |   | 2,105,895 |   |   |   | 2,041,048 |   |
| Accumulated      other comprehensive loss                                                                                                      |   |   | (284,185 | ) |   |   | (140,509 | ) |
| Treasury      stock, at      cost:      18,580,865 and 16,574,384 shares,    respectively                                                      |   |   | (612,976 | ) |   |   | (511,443 | ) |
| Retained      earnings                                                                                                                         |   |   | 2,964,027 |   |   |   | 2,095,361 |   |
| Total      Shareholders’ Equity                                                                                                          |   |   | 4,808,807 |   |   |   | 4,113,817 |   |
| Total      Liabilities and Shareholders’ Equity                                                                                          |   | $ | 10,830,896 |   |   | $ | 9,588,625 |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements                                                            |   |   |   |   |   |   |   |   |

----

Table of Contents

| Noble      Energy, Inc. and Subsidiaries                                            |   |
|-------------------------------------------------------------------------------------|--------|
| Consolidated Statements of      Operations                                          |   |
| (in      thousands, except per share amounts)                                       |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   | Year      Ended December 31, |   |
|                                                                                |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Revenues                                                                            |   |   |   |   |   |   |   |   |   |
| Oil      and gas sales                                                              |   | $ | 2,966,099 |   |   | $ | 2,701,241 |   |   | $ | 1,966,422 |   |
| Income      from equity method investees                                            |   |   | 210,928 |   |   |   | 139,362 |   |   |   | 90,812 |   |
| Other      revenues                                                                 |   |   | 95,003 |   |   |   | 99,479 |   |   |   | 129,489 |   |
| Total      Revenues                                                                 |   |   | 3,272,030 |   |   |   | 2,940,082 |   |   |   | 2,186,723 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and Expenses                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Lease      operating costs                                                          |   |   | 322,452 |   |   |   | 317,087 |   |   |   | 217,860 |   |
| Production      and ad valorem taxes                                                |   |   | 113,547 |   |   |   | 108,979 |   |   |   | 78,703 |   |
| Transportation      expense                                                         |   |   | 51,699 |   |   |   | 28,542 |   |   |   | 16,764 |   |
| Exploration      expense                                                            |   |   | 219,082 |   |   |   | 167,924 |   |   |   | 178,426 |   |
| Depreciation,      depletion and amortization                                       |   |   | 727,981 |   |   |   | 622,608 |   |   |   | 390,544 |   |
| General      and administrative                                                     |   |   | 206,378 |   |   |   | 164,541 |   |   |   | 100,125 |   |
| Accretion      of discount on asset retirement obligations                          |   |   | 8,125 |   |   |   | 10,797 |   |   |   | 11,214 |   |
| Interest,      net of amount capitalized                                            |   |   | 112,957 |   |   |   | 117,045 |   |   |   | 87,541 |   |
| (Gain)      loss on derivative instruments                                          |   |   | (2,520 | ) |   |   | 392,367 |   |   |   | 32,680 |   |
| Gain      on sale of assets                                                         |   |   | (11,854 | ) |   |   | (219,577 | ) |   |   | (4,201 | ) |
| Loss      on involuntary conversion                                                 |   |   | 51,406 |   |   |   | - |   |   |   | 1,000 |   |
| Other      expense, net                                                             |   |   | 105,210 |   |   |   | 133,552 |   |   |   | 107,407 |   |
| Total      Costs and Expenses                                                       |   |   | 1,904,463 |   |   |   | 1,843,865 |   |   |   | 1,218,063 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      Before Taxes                                                            |   |   | 1,367,567 |   |   |   | 1,096,217 |   |   |   | 968,660 |   |
| Income      Tax Provision                                                           |   |   | 423,697 |   |   |   | 417,789 |   |   |   | 322,940 |   |
| Net      Income                                                                     |   | $ | 943,870 |   |   | $ | 678,428 |   |   | $ | 645,720 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      Per Share                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   | $ | 5.52 |   |   | $ | 3.86 |   |   | $ | 4.20 |   |
| Diluted                                                                             |   | $ | 5.45 |   |   | $ | 3.79 |   |   | $ | 4.12 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of shares outstanding                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   |   | 171,078 |   |   |   | 175,707 |   |   |   | 153,773 |   |
| Diluted                                                                             |   |   | 173,344 |   |   |   | 179,044 |   |   |   | 156,759 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements |   |   |   |   |   |   |   |   |   |

----

Table of Contents

| Noble      Energy, Inc. and Subsidiaries                                                    |   |
|---------------------------------------------------------------------------------------------|--------|
| Consolidated Statements of Cash      Flows                                                  |   |
| (in      thousands)                                                                         |   |
|                                                                                        |   | Year      Ended December 31, |   |
|                                                                                        |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Cash      Flows from Operating Activities                                                   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                             |   | $ | 943,870 |   |   | $ | 678,428 |   |   | $ | 645,720 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation,      depletion and amortization - oil and gas production                      |   |   | 727,981 |   |   |   | 622,608 |   |   |   | 390,544 |   |
| Depreciation,      depletion and amortization - electricity generation                      |   |   | 14,277 |   |   |   | 16,319 |   |   |   | 16,476 |   |
| Dry      hole expense                                                                       |   |   | 90,210 |   |   |   | 70,325 |   |   |   | 98,015 |   |
| Impairment      of operating assets                                                         |   |   | 3,661 |   |   |   | 8,525 |   |   |   | 5,368 |   |
| Amortization      of unproved leasehold costs                                               |   |   | 16,013 |   |   |   | 18,923 |   |   |   | 17,855 |   |
| Stock-based      compensation expense                                                       |   |   | 26,825 |   |   |   | 11,816 |   |   |   | 3,467 |   |
| Gain      on sale of assets                                                                 |   |   | (11,854 | ) |   |   | (219,577 | ) |   |   | (4,201 | ) |
| Deferred      income taxes                                                                  |   |   | 291,881 |   |   |   | 194,261 |   |   |   | 183,770 |   |
| Accretion      of discount on asset retirement obligations                                  |   |   | 8,125 |   |   |   | 10,797 |   |   |   | 11,214 |   |
| Increase      in allowance for doubtful accounts                                            |   |   | 15,272 |   |   |   | 15,891 |   |   |   | 5,551 |   |
| Income      from equity method investees                                                    |   |   | (210,928 | ) |   |   | (139,362 | ) |   |   | (90,812 | ) |
| Dividends      from equity method investees                                                 |   |   | 226,634 |   |   |   | 37,350 |   |   |   | 59,625 |   |
| Deferred      compensation expense                                                          |   |   | 33,526 |   |   |   | 15,936 |   |   |   | 14,980 |   |
| Non-cash      (gain) loss on derivative instruments                                         |   |   | (184,944 | ) |   |   | 415,298 |   |   |   | 32,680 |   |
| Loss      on involuntary conversion                                                         |   |   | 51,406 |   |   |   | - |   |   |   | 1,000 |   |
| Other                                                                                       |   |   | (1,733 | ) |   |   | 21,509 |   |   |   | (40,421 | ) |
| Changes      in operating assets and liabilities, net of acquisition:                       |   |   |   |   |   |
| Increase      in accounts receivable                                                        |   |   | (21,609 | ) |   |   | (32,348 | ) |   |   | (73,940 | ) |
| Decrease      (increase) in other current assets                                            |   |   | 8,048 |   |   |   | (4,954 | ) |   |   | (28,254 | ) |
| Decrease      (increase) in probable insurance claims                                       |   |   | 108,075 |   |   |   | 139,590 |   |   |   | (25,306 | ) |
| Increase      (decrease) in accounts payable                                                |   |   | 19,278 |   |   |   | (11,151 | ) |   |   | 20,747 |   |
| Decrease      in other current liabilities                                                  |   |   | (137,441 | ) |   |   | (139,878 | ) |   |   | (4,200 | ) |
| Net      Cash Provided by Operating Activities                                              |   |   | 2,016,573 |   |   |   | 1,730,306 |   |   |   | 1,239,878 |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Investing Activities                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additions      to property, plant and equipment                                             |   |   | (1,414,515 | ) |   |   | (1,357,039 | ) |   |   | (785,610 | ) |
| Acquisition      of U.S. Exploration, net of cash acquired                                  |   |   | - |   |   |   | (412,257 | ) |   |   | - |   |
| Acquisiton      of Patina, net of cash acquired                                             |   |   | - |   |   |   | - |   |   |   | (1,111,099 | ) |
| Proceeds      from sale of property, plant and equipment                                    |   |   | 9,326 |   |   |   | 519,567 |   |   |   | 13,179 |   |
| Investments      in equity method investees                                                 |   |   | - |   |   |   | (3,768 | ) |   |   | (13,927 | ) |
| Distributions      from equity method investees                                             |   |   | 2,100 |   |   |   | 155,158 |   |   |   | 4,969 |   |
| Net      Cash Used in Investing Activities                                                  |   |   | (1,403,089 | ) |   |   | (1,098,339 | ) |   |   | (1,892,488 | ) |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Financing Activities                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise      of stock options                                                              |   |   | 24,636 |   |   |   | 62,613 |   |   |   | 67,657 |   |
| Excess      tax benefits from stock-based awards                                            |   |   | 20,072 |   |   |   | 26,106 |   |   |   | - |   |
| Cash      dividends paid                                                                    |   |   | (75,204 | ) |   |   | (48,924 | ) |   |   | (23,655 | ) |
| Purchase      of treasury stock                                                             |   |   | (101,533 | ) |   |   | (398,675 | ) |   |   | - |   |
| Proceeds      from credit facilities                                                        |   |   | 280,000 |   |   |   | 480,000 |   |   |   | 3,335,333 |   |
| Repayment      of credit facilities                                                         |   |   | (255,000 | ) |   |   | (605,000 | ) |   |   | (2,140,333 | ) |
| Repayment      of term loans                                                                |   |   | - |   |   |   | (105,000 | ) |   |   | (45,000 | ) |
| Repayment      of Patina debt                                                               |   |   | - |   |   |   | - |   |   |   | (610,865 | ) |
| Net      Cash Provided by (Used in) Financing Activities                                    |   |   | (107,029 | ) |   |   | (588,880 | ) |   |   | 583,137 |   |
| Increase      (Decrease) in Cash and Cash Equivalents                                       |   |   | 506,455 |   |   |   | 43,087 |   |   |   | (69,473 | ) |
| Cash      and Cash Equivalents at Beginning of Period                                       |   |   | 153,408 |   |   |   | 110,321 |   |   |   | 179,794 |   |
| Cash      and Cash Equivalents at End of Period                                             |   | $ | 659,863 |   |   | $ | 153,408 |   |   | $ | 110,321 |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements         |   |

----

Table of Contents

| Noble      Energy, Inc. and Subsidiaries                                            |   |
|-------------------------------------------------------------------------------------|--------|
| Consolidated Statements of      Shareholders' Equity                                |   |
| (in      thousands)                                                                 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   | Deferred |   | Accumulated |   |   |   |   |   |   |   |
|                                                                                |   |   | Capital      in |   | Compensation |   | Other |   | Treasury |   |   |   | Total |   |
|                                                                                | Common |   | Excess      of |   | -      Restricted |   | Comprehensive |   | Stock |   | Retained |   | Shareholders' |   |
|                                                                                | Stock  |   | Par      Value |   | Stock |   | Loss |   | at      Cost |   | Earnings |   | Equity |   |
| December      31, 2004                                                              | $      | 417,152 |   | $ | 291,458 |   | $ | (1,671 | ) | $ | (14,787 | ) | $ | (75,956 | ) | $ | 843,792 |   | $ | 1,459,988 |   |
| Net      income                                                                     |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 645,720 |   |   | 645,720 |   |
| Patina      Merger                                                                  |   | 185,568 |   |   | 1,576,799 |   |   | - |   |   | - |   |   | (73,203 | ) |   | - |   |   | 1,689,164 |   |
| Exercise      of stock options                                                      |   | 13,013 |   |   | 54,644 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 67,657 |   |
| Tax      benefits related to exercise of stock options                         | -      |   |   | 15,407 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 15,407 |   |
| Restricted      stock awards, net                                                   |   | 578 |   |   | 6,506 |   |   | (7,084 | ) |   | - |   |   | - |   |   | - |   |   | - |   |
| Amortization      of restricted stock                                               |   | - |   |   | - |   |   | 3,467 |   |   | - |   |   | - |   |   | - |   |   | 3,467 |   |
| Cash      dividends ($0.15 per share)                                               |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (23,655 | ) |   | (23,655 | ) |
| Rabbi      trust shares sold                                                        |   | - |   |   | 90 |   |   | - |   |   | - |   |   | 683 |   |   | - |   |   | 773 |   |
| Other                                                                               |   | - |   |   | 335 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 335 |   |
| Oil      and gas cash flow hedges:                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings                                    |   | - |   |   | - |   |   | - |   |   | 154,500 |   |   | - |   |   | - |   |   | 154,500 |   |
| Unrealized      amounts reclassified into earnings                                  | -      |   |   | - |   |   | - |   |   | 33,638 |   |   | - |   |   | - |   |   | 33,638 |   |
| Unrealized      change in fair value                                                | -      |   |   | - |   |   | - |   |   | (945,033 | ) |   | - |   |   | - |   |   | (945,033 | ) |
| Net      change in other                                                            |   | - |   |   | - |   |   | - |   |   | (11,817 | ) |   | - |   |   | - |   |   | (11,817 | ) |
| Other      comprehensive loss                                                       |   |   |   |   |   |   |   |   |   |   | (768,712 | ) |   |   |   |   |   |   |   |   |   |
| December      31, 2005                                                              |   | 616,311 |   |   | 1,945,239 |   |   | (5,288 | ) |   | (783,499 | ) |   | (148,476 | ) |   | 1,465,857 |   |   | 3,090,144 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                     |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 678,428 |   |   | 678,428 |   |
| Adoption      of SFAS 123(R), net of tax                                            |   | - |   |   | (5,288 | ) |   | 5,288 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Stock-based      compensation expense                                               |   | - |   |   | 11,816 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 11,816 |   |
| Exercise      of stock options                                                      |   | 12,829 |   |   | 49,784 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 62,613 |   |
| Tax      benefits related to  exercise of stock options                        | -      |   |   | 26,106 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 26,106 |   |
| Restricted      stock awards, net                                                   |   | 220 |   |   | (220 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Cash      dividends ($0.275 per share)                                              |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (48,924 | ) |   | (48,924 | ) |
| Purchase      of treasury stock                                                     |   | - |   |   | - |   |   | - |   |   | - |   |   | (398,675 | ) |   | - |   |   | (398,675 | ) |
| Rabbi      trust shares sold                                                        |   | - |   |   | 13,611 |   |   | - |   |   | - |   |   | 35,708 |   |   | - |   |   | 49,319 |   |
| Oil      and gas cash flow hedges:                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings                                    |   | - |   |   | - |   |   | - |   |   | 145,035 |   |   | - |   |   | - |   |   | 145,035 |   |
| Unrealized      amounts reclassified into earnings                                  |   | - |   |   | - |   |   | - |   |   | 264,520 |   |   | - |   |   | - |   |   | 264,520 |   |
| Unrealized      change in fair value                                                |   | - |   |   | - |   |   | - |   |   | 249,974 |   |   | - |   |   | - |   |   | 249,974 |   |
| Net      change in other                                                            |   | - |   |   | - |   |   | - |   |   | 16,862 |   |   | - |   |   | - |   |   | 16,862 |   |
| Other      comprehensive income                                                     |   |   |   |   |   |   |   |   |   |   | 676,391 |   |   |   |   |   |   |   |   |   |   |
| Adoption      of SFAS 158, net of tax                                               |   | - |   |   | - |   |   | - |   |   | (33,401 | ) |   | - |   |   | - |   |   | (33,401 | ) |
| December      31, 2006                                                              |   | 629,360 |   |   | 2,041,048 |   |   | - |   |   | (140,509 | ) |   | (511,443 | ) |   | 2,095,361 |   |   | 4,113,817 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                     |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 943,870 |   |   | 943,870 |   |
| Stock-based      compensation expense                                               |   | - |   |   | 26,825 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 26,825 |   |
| Exercise      of stock options                                                      |   | 4,930 |   |   | 19,706 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 24,636 |   |
| Tax      benefits related to exercise of stock options                         |   | - |   |   | 20,072 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 20,072 |   |
| Restricted      stock awards, net                                                   |   | 1,756 |   |   | (1,756 | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Cash      dividends ($0.435 per share)                                              |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (75,204 | ) |   | (75,204 | ) |
| Purchase      of treasury stock                                                     |   | - |   |   | - |   |   | - |   |   | - |   |   | (101,533 | ) |   | - |   |   | (101,533 | ) |
| Oil      and gas cash flow hedges:                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings                                    | -      |   |   | - |   |   | - |   |   | 33,761 |   |   | - |   |   | - |   |   | 33,761 |   |
| Unrealized      change in fair value                                                |   | - |   |   | - |   |   | - |   |   | (184,254 | ) |   | - |   |   | - |   |   | (184,254 | ) |
| Net      change in other                                                            |   | - |   |   | - |   |   | - |   |   | 6,817 |   |   | - |   |   | - |   |   | 6,817 |   |
| Other      comprehensive loss                                                       |   |   |   |   |   |   |   |   |   |   | (143,676 | ) |   |   |   |   |   |   |   |   |   |
| December      31, 2007                                                              | $      | 636,046 |   | $ | 2,105,895 |   | $ | - |   | $ | (284,185 | ) | $ | (612,976 | ) | $ | 2,964,027 |   | $ | 4,808,807 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

| Noble      Energy, Inc. and Subsidiaries                                            |   |
|-------------------------------------------------------------------------------------|--------|
| Consolidated Statements of      Comprehensive Income (Loss)                         |   |
| (in      thousands)                                                                 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |
|                                                                                |   | Year      Ended December 31, |   |
|                                                                                |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Net      income                                                                     |   | $ | 943,870 |   |   | $ | 678,428 |   |   | $ | 645,720 |   |
| Other      items of comprehensive income (loss)                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil      and gas cash flow hedges:                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|   Realized      amounts reclassified into earnings                        |   |   | 54,105 |   |   |   | 232,428 |   |   |   | 237,692 |   |
|     Less      tax provision                                     |   |   | (20,344 | ) |   |   | (87,393 | ) |   |   | (83,192 | ) |
|   Unrealized      amounts reclassified into earnings                      |   |   | - |   |   |   | 423,910 |   |   |   | 51,750 |   |
|     Less      tax provision                                     |   |   | - |   |   |   | (159,390 | ) |   |   | (18,112 | ) |
|   Unrealized      change in fair value                                    |   |   | (295,279 | ) |   |   | 351,637 |   |   |   | (1,453,897 | ) |
|     Less      tax provision                                     |   |   | 111,025 |   |   |   | (101,663 | ) |   |   | 508,864 |   |
| Interest      rate cash flow hedges:                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|   Realized      amounts reclassified into earnings                        |   |   | 758 |   |   |   | 758 |   |   |   | 757 |   |
|     Less      tax provision                                     |   |   | (285 | ) |   |   | (121 | ) |   |   | (265 | ) |
|   Unrealized      change in fair value                                    |   |   | (1,203 | ) |   |   | - |   |   |   | - |   |
|     Less      tax provision                                     |   |   | 452 |   |   |   | - |   |   |   | - |   |
| Net      change in other                                                            |   |   | 11,369 |   |   |   | 25,002 |   |   |   | (18,937 | ) |
|     Less      tax provision                                     |   |   | (4,274 | ) |   |   | (8,777 | ) |   |   | 6,628 |   |
| Other      comprehensive income (loss)                                              |   |   | (143,676 | ) |   |   | 676,391 |   |   |   | (768,712 | ) |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income (loss)                                                    |   | $ | 800,194 |   |   | $ | 1,354,819 |   |   | $ | (122,992 | ) |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements |   |   |   |   |   |   |   |   |   |

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NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

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|                                |   | Year      Ended December 31, |   |
|-------------------------------------|--------|------------------------------|--------|
|                                |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                |   | (in      thousands)          |   |
| Balance      at beginning of period |   | $                            | 34,535 |   |   | $ | 18,644 |   |   | $ | 13,093 |   |
| Charged      to expense             |   |                         | 14,183 |   |   |   | 19,404 |   |   |   | 14,688 |   |
| Deductions      and other           |   |                         | 1,089  |   |   |   | (3,513 | ) |   |   | (9,137 | ) |
| Balance      at end of period       |   | $                            | 49,807 |   |   | $ | 34,535 |   |   | $ | 18,644 |   |

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|                                       |   | December      31,   |    |
|--------------------------------------------|--------|---------------------|---------|
|                                       |   | 2007                |    |   | 2006 |   |
|                                       |   | (in      thousands) |    |
| Other      Current Assets                  |   |                |    |   |   |   |
| Derivative      instruments                |   | $                   | 15,058  |   |   | $ | 35,242 |   |
| Materials      and supplies inventories    |   |                | 60,479  |   |   |   | 46,973 |   |
| Prepaid      expenses and other            |   |                | 24,981  |   |   |   | 44,809 |   |
| Total                                      |   | $                   | 100,518 |   |   | $ | 127,024 |   |
| Other      Noncurrent Assets               |   |                |    |   |   |   |   |   |
| Equity      method investments             |   | $                   | 357,129 |   |   | $ | 373,372 |   |
| Mutual      fund investments               |   |                | 123,779 |   |   |   | 116,314 |   |
| Probable      insurance claims             |   |                | 37,475  |   |   |   | 46,500 |   |
| Derivative      instruments                |   |                | 4,829   |   |   |   | 2,862 |   |
| Other      assets                          |   |                | 33,457  |   |   |   | 28,984 |   |
| Total                                      |   | $                   | 556,669 |   |   | $ | 568,032 |   |
| Other      Current Liabilities             |   |                |    |   |   |   |   |   |
| Accrued      and other current liabilities |   | $                   | 206,435 |   |   | $ | 219,885 |   |
| Interest      payable                      |   |                | 18,059  |   |   |   | 15,507 |   |
| Total                                      |   | $                   | 224,494 |   |   | $ | 235,392 |   |
| Other      Noncurrent Liabilities          |   |                |    |   |   |   |   |   |
| Deferred      compensation liabilities     |   | $                   | 225,098 |   |   | $ | 173,253 |   |
| Accrued      benefit costs                 |   |                | 50,972  |   |   |   | 58,491 |   |
| Other      noncurrent liabilities          |   |                | 61,597  |   |   |   | 42,976 |   |
| Total                                      |   | $                   | 337,667 |   |   | $ | 274,720 |   |

|                                     |   | Year      Ended December 31, |    |
|------------------------------------------|--------|------------------------------|---------|
|                                     |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                                     |   | (in      thousands)          |    |
| Other      Revenues                      |   |                         |    |   |   |   |   |   |   |
| Electricity      sales                   |   | $                            | 70,916  |   |   | $ | 71,603 |   |   | $ | 74,228 |   |
| Gathering,      marketing and processing |   |                         | 24,087  |   |   |   | 27,876 |   |   |   | 55,261 |   |
| Total                                    |   | $                            | 95,003  |   |   | $ | 99,479 |   |   | $ | 129,489 |   |
| Other      Expense, net                  |   |                         |    |   |   |   |   |   |   |   |   |   |
| Electricity      generation (1)          |   | $                            | 56,552  |   |   | $ | 59,494 |   |   | $ | 53,137 |   |
| Gathering,      marketing and processing |   |                         | 17,539  |   |   |   | 18,664 |   |   |   | 28,067 |   |
| Deferred      compensation expense       |   |                         | 33,526  |   |   |   | 15,936 |   |   |   | 14,980 |   |
| Impairment      of operating assets      |   |                         | 3,661   |   |   |   | 8,525 |   |   |   | 5,368 |   |
| Other                                    |   |                         | (6,068  | ) |   |   | 30,933 |   |   |   | 5,855 |   |
| Total                                    |   | $                            | 105,210 |   |   | $ | 133,552 |   |   | $ | 107,407 |   |

|  (1) | See      Allowance for Doubtful      Accounts above. |
|-----------|------------------------------------------------------|

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|                                                                                    |   | Year      Ended December 31, |    |
|-----------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                    |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                                                                                    |   |  (in      thousands)    |    |
| Cash      paid during the year for:                                                     |   |                         |    |   |   |   |   |   |   |
| Interest      (net of amount capitalized)                                               |   | $                            | 104,910 |   |   | $ | 105,769 |   |   | $ | 83,860 |   |
| Income      taxes paid, net                                                             |   |                         | 149,058 |   |   |   | 115,398 |   |   |   | 121,687 |   |
| Non-cash      financing and investing activities:                                       |   |                         |    |   |   |   |   |   |   |   |   |   |
| Issuance      of notes for property interests                                           |   |                         | 50,000  |   |   |   | - |   |   |   | - |   |
| Issuance      of common stock and options and liabilities assumed in Patina      Merger |   |                         | -       |   |   |   | - |   |   |   | 3,783,306 |   |

|                                                                  |   | Year      Ended December 31, |    |
|-----------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                  |   | 2007                         |    |   | 2006 |   |
|                                                                  |   | (in      thousands)          |    |
| Balance      at beginning of period                                   |   | $                            | 781,290 |   |   | $ | 862,868 |   |
| Goodwill      associated with acquisitions                            |   |                         | (15,091 | ) |   |   | 27,711 |   |
| Goodwill      associated with sale of Gulf of Mexico shelf properties |   |                         | -       |   |   |   | (100,000 | ) |
| Tax      benefits on stock options exercised                          |   |                         | (5,703  | ) |   |   | (9,289 | ) |
| Balance      at end of period                                         |   | $                            | 760,496 |   |   | $ | 781,290 |   |

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|                             | December      31,                                                |
|----------------------------------|------------------------------------------------------------------|
|                             | 2007                                                             | 2006 |
|                             | Carrying      Amount                                             | Fair      Value | Carrying      Amount | Fair      Value |
|                             | (in      thousands)                                              |
| Total      debt, net of discount |  $        1,876,087 |  $             1,919,990 |  $             1,800,810 |  $             1,852,890 |

|                                                                        |   | Year      Ended December 31,                  |    |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                        |   | 2007                                          |    |   | 2006 |   |   | 2005 |   |
|                                                                        |   | Income                                        |    |   | Shares |   |   | Income |   |   | Shares |   |   | Income |   |   | Shares |   |
|                                                                        |   | (in      thousands, except per share amounts) |    |
| Net income      available to common shareholders                       |   | $                                             | 943,870 |   |   |   | 171,078 |   |   | $ | 678,428 |   |   |   | 175,707 |   |   | $ | 645,720 |   |   |   | 153,773 |   |
| Basic      EPS                                                              |   | $                                             | 5.52    |   |   |   |   |   |   | $ | 3.86 |   |   |   |   |   |   | $ | 4.20 |   |   |   |   |   |
| Net income      available to common shareholders                       |   | $                                             | 943,870 |   |   |   | 171,078 |   |   | $ | 678,428 |   |   |   | 175,707 |   |   | $ | 645,720 |   |   |   | 153,773 |   |
| Effect      of dilutive stock options and restricted stock      awards |   |                                          | -       |   |   |   | 2,266 |   |   |   | - |   |   |   | 3,337 |   |   |   | - |   |   |   | 2,986 |   |
| Adjusted      net income and shares                                         |   | $                                             | 943,870 |   |   |   | 173,344 |   |   | $ | 678,428 |   |   |   | 179,044 |   |   | $ | 645,720 |   |   |   | 156,759 |   |
| Diluted      EPS                                                            |   | $                                             | 5.45    |   |   |   |   |   |   | $ | 3.79 |   |   |   |   |   |   | $ | 4.12 |   |   |   |   |   |

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|                                                                                             | Weighted      Outstanding                                                        |   | Weighted      Average |
|--------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                             | Awards      and Shares                                                           |   | Exercise      Price   |   |
|                                                                                             | (in      thousands, except per share amounts)                                    |   |
| Year      Ended December 31, 2007                                                                |                                                                             |   |                  |   |   |
| Stock      options                                                                               |         1,014                            |   | $                     | 52.41 |   |
| Noble      Energy common stock held in rabbi trust      and shares of restricted stock |         1,102                            |   |                  |            - |   |
| Total      excluded from diluted EPS calculation                                                 |         2,116                            |   |                  |   |   |
| Year      Ended December 31, 2006                                                                |                                                                             |   |                  |   |   |
| Stock      options                                                                               |            675            |   | $                     | 45.19 |   |
|  Noble      Energy common stock held in rabbi trust and shares of restricted      stock     |         1,276                            |   |                  |            - |   |
| Total      excluded from diluted EPS calculation                                                 |         1,951                            |   |                  |   |   |
| Year      Ended December 31, 2005                                                                |                                                                             |   |                  |   |   |
| Stock      options                                                                               |              48 |   | $                     | 41.47 |   |
| Noble      Energy common stock held in rabbi trust                                               |         1,360                            |   |                  |            - |   |
| Total      excluded from diluted EPS calculation                                                 |         1,408                            |   |                  |   |   |

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|   | · | $413 million      to proved oil and gas properties; |
|--------|--------|----------------------------------------------------------|

|   | · | $131 million      to unproved oil and gas properties; |
|--------|--------|------------------------------------------------------------|

|   | · | $34 million      to goodwill; and |
|--------|--------|----------------------------------------|

|   | · | $172 million      to deferred income taxes. |
|--------|--------|--------------------------------------------------|

|   | · | $2.6 billion      to proved oil and gas properties; |
|--------|--------|----------------------------------------------------------|

|   | · | $1.1 billion      to unproved oil and gas properties; |
|--------|--------|------------------------------------------------------------|

|   | · | $875 million      to goodwill; and |
|--------|--------|-----------------------------------------|

|   | · | $1.1 billion      to deferred income taxes. |
|--------|--------|--------------------------------------------------|

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|                     | Year      Ended December 31, 2005 |
|--------------------------|-----------------------------------|
|                     |                              | (in      thousands, except per share amounts) |   |
| Revenues                 |                              | $ | 2,434,677 |   |
| Net      income          |                              |   |                693,091 |   |
| Earnings      per share: |                              |   |   |   |
| Basic                    |                              | $ | 4.03 |   |
| Diluted                  |                              |   |                      3.98 |   |
|                     |                              |   |   |   |

| Note 4—Effect of Gulf      Coast Hurricanes |
|---------------------------------------------------|

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| Note 5—Capitalized      Exploratory Well Costs |
|------------------------------------------------------|

|                                                                                                    |   | Year      Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                                    |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                                                                                                    |   | (in      thousands)          |    |
| Capitalized      exploratory well costs, beginning of period                                            |   | $                            | 80,359  |   |   | $ | 35,228 |   |   | $ | 62,724 |   |
| Additions      to capitalized exploratory well costs pending determination of proved      reserves |   |                         | 182,271 |   |   |   | 62,580 |   |   |   | 33,671 |   |
| Reclassified      to property, plant and equipment based on determination of proved      reserves  |   |                         | (7,143  | ) |   |   | (16,762 | ) |   |   | (52,138 | ) |
| Capitalized      exploratory well costs charged to expense                                              |   |                         | (6,454  | ) |   |   | (687 | ) |   |   | (9,029 | ) |
| Capitalized      exploratory well costs, end of period                                                  |   | $                            | 249,033 |   |   | $ | 80,359 |   |   | $ | 35,228 |   |

|                                                                                                                                                               |   | December      31,   |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                                                                                                               |   | 2007                |    |   | 2006 |   |   | 2005 |   |
|                                                                                                                                                               |   | (in      thousands) |    |
| Capitalized      exploratory well costs that have been capitalized for a period of one      year or less                                                      |   | $                   | 187,101 |   |   | $ | 58,493 |   |   | $ | 35,228 |   |
| Capitalized      exploratory well costs that have been capitalized for a period      greater than one year after completion of drilling                       |   |                | 61,932  |   |   |   | 21,866 |   |   |   | - |   |
| Balance      at end of period                                                                                                                                      |   | $                   | 249,033 |   |   | $ | 80,359 |   |   | $ | 35,228 |   |
|                                                                                                                                                               |   |                |    |   |   |   |   |   |   |   |   |   |
| Number      of projects that have exploratory well costs that have      been capitalized for a period greater than one year after      completion of drilling |   |                | 6       |   |   |   | 4 |   |   |   | - |   |

|                                                                                                                                                    |   |                |   |   | Suspended      Since |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|----------------------|--------|
|                                                                                                                                                    |   | Total               |   |   | 2006                 |   |   | 2005 |   |
|                                                                                                                                                    |   | (in      thousands) |   |
| Project:                                                                                                                                                |   |                |   |   |                 |   |   |   |   |
| Raton      South (Deepwater Gulf of Mexico)                                                                                                             |   | $                   | 23,374 |   |                 | $      | 23,374 |   |   | $ | - |   |
| Redrock      (Deepwater Gulf of Mexico)                                                                                                                 |   |                | 17,133 |   |                 |   | 17,133 |   |   |   | - |   |
| Blocks      O and I (West Africa)                                                                                                                       |   |                | 19,039 |   |                 |   | - |   |   |   | 19,039 |   |
| Other                                                                                                                                                   |   |                | 2,386  |   |                 |   | 2,386 |   |   |   | - |   |
| Total      capitalized exploratory well costs that have been      capitalized for a period greater than one year after      completion of drilling |   | $                   | 61,932 |   |                 | $      | 42,893 |   |   | $ | 19,039 |   |

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| Note 6—Asset      Retirement Obligations |
|------------------------------------------------|

|                                                   |  Year      Ended December 31, 2007 |
|--------------------------------------------------------|-----------------------------------------|
|                                                   |                                    | (in      thousands) |   |
| Asset      retirement obligations, beginning of period |                                    | $ | 196,189 |   |
| Liabilities      incurred in current period            |                                    |   | 8,927 |   |
| Liabilities      settled in current period             |                                    |   | (176,961 | ) |
| Revisions                                              |                                    |   | 108,008 |   |
| Accretion      expense                                 |                                    |   | 8,125 |   |
| Asset      retirement obligations, end of period       |                                    | $ | 144,288 |   |
|                                                   |                                    |   |   |   |
| Current      portion                                   |                                    | $ | 13,332 |   |
| Noncurrent      portion                                |                                    |   | 130,956 |   |

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| Note      7—Debt |
|------------------------|

|                                              |   | December      31,                       |      |
|---------------------------------------------------|--------|-----------------------------------------|-----------|
|                                              |   | 2007                                    |      |   | 2006 |   |
|                                              |   | Debt                                    |      |   | Interest      Rate |   |   | Debt |   |   | Interest      Rate |   |
|                                              |   | (in      thousands, except percentages) |      |
| $2.1      billion Credit Facility                 |   | $                                       | 1,180,000 |   |   |   | 5.28 |   |   | $ | 1,155,000 |   |   |   | 5.69 |   |
| 5      ¼% Senior Notes, due April 2014       |   |                                    | 200,000   |   |   |   | 5.25 |   |   |   | 200,000 |   |   |   | 5.25 |   |
| 7      ¼% Notes, due October 2023            |   |                                    | 100,000   |   |   |   | 7.25 |   |   |   | 100,000 |   |   |   | 7.25 |   |
| 8%      Senior Notes, due April 2027              |   |                                    | 250,000   |   |   |   | 8.00 |   |   |   | 250,000 |   |   |   | 8.00 |   |
| 7      ¼% Senior Debentures, due August 2097 |   |                                    | 100,000   |   |   |   | 7.25 |   |   |   | 100,000 |   |   |   | 7.25 |   |
| Installment      payments, due May 2009           |   |                                    | 25,000    |   |   |   | 5.53 |   |   |   | - |   |   |   | - |   |
| Long-term      debt                               |   |                                    | 1,855,000 |   |   |   |   |   |   |   | 1,805,000 |   |   |   |   |   |
| Installment      payments - current portion       |   |                                    | 25,000    |   |   |   | 5.53 |   |   |   | - |   |   |   | - |   |
| Total      debt                                   |   |                                    | 1,880,000 |   |   |   |   |   |   |   | 1,805,000 |   |   |   |   |   |
| Unamortized      discount                         |   |                                    | (3,913    | ) |   |   |   |   |   |   | (4,190 | ) |   |   |   |   |
| Total      debt, net of discount                  |   | $                                       | 1,876,087 |   |   |   |   |   |   | $ | 1,800,810 |   |   |   |   |   |

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|       |   | (in      thousands) |      |
|------------|--------|---------------------|-----------|
| 2008       |   | $                   | 25,000    |   |
| 2009       |   |                | 25,000    |   |
| 2010       |   |                | -         |   |
| 2011       |   |                | -         |   |
| 2012       |   |                | 1,180,000 |   |
| Thereafter |   |                | 650,000   |   |
| Total      |   | $                   | 1,880,000 |   |

| Note 8—Income      Taxes |
|--------------------------------|

|     |   | Year      Ended December 31, |      |
|----------|--------|------------------------------|-----------|
|     |   | 2007                         |      |   | 2006 |   |   | 2005 |   |
|     |   | (in      thousands)          |      |
| Domestic |   | $                            | 480,200   |   |   | $ | 402,111 |   |   | $ | 426,756 |   |
| Foreign  |   |                         | 887,367   |   |   |   | 694,106 |   |   |   | 541,904 |   |
| Total    |   | $                            | 1,367,567 |   |   | $ | 1,096,217 |   |   | $ | 968,660 |   |

|                            |   | Year      Ended December 31, |    |
|---------------------------------|--------|------------------------------|---------|
|                            |   | 2007                         |    |   | 2006 |   |   | 2005 |   |
|                            |   | (in      thousands)          |    |
| Current      taxes:             |   |                         |    |   |   |   |   |   |   |
| Federal                         |   | $                            | 6,409   |   |   | $ | 79,680 |   |   | $ | 48,293 |   |
| State                           |   |                         | 506     |   |   |   | 5,577 |   |   |   | - |   |
| Foreign                         |   |                         | 124,901 |   |   |   | 138,271 |   |   |   | 90,877 |   |
| Total      current              |   |                         | 131,816 |   |   |   | 223,528 |   |   |   | 139,170 |   |
|                            |   |                         |    |   |   |   |   |   |   |   |   |   |
| Deferred      taxes:            |   |                         |    |   |   |   |   |   |   |   |   |   |
| Federal                         |   |                         | 185,503 |   |   |   | 144,143 |   |   |   | 119,953 |   |
| State                           |   |                         | 6,283   |   |   |   | 4,641 |   |   |   | 14,073 |   |
| Foreign                         |   |                         | 100,095 |   |   |   | 45,477 |   |   |   | 49,744 |   |
| Total      deferred             |   |                         | 291,881 |   |   |   | 194,261 |   |   |   | 183,770 |   |
| Total      income tax provision |   | $                            | 423,697 |   |   | $ | 417,789 |   |   | $ | 322,940 |   |

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|                                         |   | Year      Ended December 31,  |   |
|----------------------------------------------|--------|-------------------------------|--------|
|                                         |   | 2007                          |   |   | 2006 |   |   | 2005 |   |
|                                         |   | (amounts      in percentages) |   |
| Federal      statutory rate                  |   |                          | 35.0   |   |   |   | 35.0 |   |   |   | 35.0 |   |
| Effect      of:                              |   |                          |   |   |   |   |   |   |   |   |   |   |
| Earnings      of equity method investees     |   |                          | (5.4   | ) |   |   | (4.2 | ) |   |   | (3.2 | ) |
| State      taxes, net of federal benefit     |   |                          | 0.5    |   |   |   | 1.3 |   |   |   | 1.3 |   |
| Difference      between US and foreign rates |   |                          | 1.6    |   |   |   | 2.2 |   |   |   | 3.5 |   |
| Nondeductible      goodwill                  |   |                          | -      |   |   |   | 3.1 |   |   |   | - |   |
| AJCA      repatriation benefit               |   |                          | -      |   |   |   | - |   |   |   | (3.7 | ) |
| Other,      net                              |   |                          | (0.7   | ) |   |   | 0.7 |   |   |   | 0.4 |   |
| Effective      rate                          |   |                          | 31.0   |   |   |   | 38.1 |   |   |   | 33.3 |   |

|                                                                                                                                          |   | December      31,   |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|------------|
|                                                                                                                                          |   | 2007                |       |   | 2006 |   |
|                                                                                                                                          |   | (in      thousands) |       |
| Deferred      tax assets:                                                                                                                     |   |                |       |   |   |   |
| Loss      carryforwards                                                                                                                       |   | $                   | 20,571     |   |   | $ | 90,387 |   |
| Accrued      expenses                                                                                                                         |   |                | 26,227     |   |   |   | 34,083 |   |
| Allowance      for doubtful accounts                                                                                                          |   |                | 3,566      |   |   |   | 2,917 |   |
| Fair      value of derivative contracts                                                                                                       |   |                | 176,750    |   |   |   | 185,667 |   |
| Postretirement      benefits                                                                                                                  |   |                | 10,233     |   |   |   | 14,578 |   |
| Deferred      compensation                                                                                                                    |   |                | 60,993     |   |   |   | 55,880 |   |
| Foreign      tax credits                                                                                                                      |   |                | 82,037     |   |   |   | 63,707 |   |
| Other                                                                                                                                         |   |                | 14,037     |   |   |   | 3,577 |   |
| Total      deferred tax assets                                                                                                                |   |                | 394,414    |   |   |   | 450,796 |   |
| Valuation      allowance - foreign losses                                                                                                     |   |                | (18,174    | ) |   |   | (9,876 | ) |
| Valuation      allowance - foreign tax credits                                                                                                |   |                | (56,619    | ) |   |   | (63,708 | ) |
| Net      deferred tax assets                                                                                                                  |   |                | 319,621    |   |   |   | 377,212 |   |
| Deferred      tax liabilities:                                                                                                                |   |                |       |   |   |   |   |   |
| Property,      plant and equipment, principally due to differences in depreciation,      amortization, lease impairment and abandonments |   |                | (2,183,950 | ) |   |   | (2,034,877 | ) |
| Other                                                                                                                                         |   |                | 11,067     |   |   |   | (952 | ) |
| Total      deferred tax liability                                                                                                             |   |                | (2,172,883 | ) |   |   | (2,035,829 | ) |
| Net      deferred tax liability                                                                                                               |   | $                   | (1,853,262 | ) |   | $ | (1,658,617 | ) |

|                               |   | December      31,   |       |
|------------------------------------|--------|---------------------|------------|
|                               |   | 2007                |       |   | 2006 |   |
|                               |   | (in      thousands) |       |
| Deferred      income tax asset     |   | $                   | 130,571    |   |   | $ | 99,835 |   |
| Deferred      income tax liability |   |                | (1,983,833 | ) |   |   | (1,758,452 | ) |
| Net      deferred tax liability    |   | $                   | (1,853,262 | ) |   | $ | (1,658,617 | ) |

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| Note 9—Stock-Based      Compensation |
|--------------------------------------------|

|                                               |   | Year      Ended December 31, |   |
|----------------------------------------------------|--------|------------------------------|--------|
|                                               |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                               |   | (in      thousands)          |   |
| Stock-based      compensation expense included in: |   |                         |   |   |   |   |   |   |   |
| General      and administrative expense            |   | $                            | 25,136 |   |   | $ | 10,720 |   |   | $ | 4,008 |   |
| Exploration      expense and other                 |   |                         | 1,689  |   |   |   | 1,096 |   |   |   | - |   |
| Total      stock-based compensation expense        |   | $                            | 26,825 |   |   | $ | 11,816 |   |   | $ | 4,008 |   |
| Tax      benefit recognized                        |   | $                            | 10,086 |   |   | $ | 4,443 |   |   | $ | 1,403 |   |

|                                                                                                                            |   | Year      Ended December 31,                  |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                                                                            |   | 2007                                          |    |   | 2006 |   |   | 2005 |   |
|                                                                                                                            |   | (actual)                                      |    |   | (actual) |   |   | (pro      forma) |   |
|                                                                                                                            |   |                                          |    |   |   |   |   | (unaudited) |   |
|                                                                                                                            |   | (in      thousands, except per share amounts) |    |
| Net      income, as reported                                                                                                    |   | $                                             | 943,870 |   |   | $ | 678,428 |   |   | $ | 645,720 |   |
| Add:      Stock-based compensation cost recognized, net of tax                                                                  |   |                                          | 16,739  |   |   |   | 7,373 |   |   |   | 2,605 |   |
| Deduct:      Stock-based employee compensation expense determined under fair      value based method for all awards, net of tax |   |                                          | (16,739 | ) |   |   | (7,373 | ) |   |   | (6,150 | ) |
| Pro      forma net income                                                                                                       |   | $                                             | 943,870 |   |   | $ | 678,428 |   |   | $ | 642,175 |   |
| Earnings      per share:                                                                                                        |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Basic      - as reported                                                                                                        |   | $                                             | 5.52    |   |   | $ | 3.86 |   |   | $ | 4.20 |   |
| Basic      - pro forma                                                                                                          |   |                                          | 5.52    |   |   |   | 3.86 |   |   |   | 4.18 |   |
| Diluted      - as reported                                                                                                      |   |                                          | 5.45    |   |   |   | 3.79 |   |   |   | 4.12 |   |
| Diluted      - pro forma                                                                                                        |   |                                          | 5.45    |   |   |   | 3.79 |   |   |   | 4.10 |   |

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| 2004 Long-Term      Incentive Plan |
|------------------------------------|

| 2005 Stock Plan for      Non-Employee Directors |
|-------------------------------------------------|

| 1988 Nonqualified      Stock Option Plan for Non-Employee  Directors |
|----------------------------------------------------------------------|

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Table of Contents

|                          |   | Year      Ended December 31, |   |
|-------------------------------|--------|------------------------------|--------|
|                          |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                          |   | (weighted      averages)     |   |
| Expected      term (in years) |   |                         | 5.5    |   |   |   | 5.5 |   |   |   | 5.5 |   |
| Expected      volatility      |   |                         | 29.6   | % |   |   | 31.8 | % |   |   | 21.5 | % |
| Risk-free      rate           |   |                         | 4.7    | % |   |   | 4.7 | % |   |   | 4.6 | % |
| Expected      dividend yield  |   |                         | 0.6    | % |   |   | 0.8 | % |   |   | 0.4 | % |

|                                  |   |    |       |   |             |   | Weighted        |   |                                                                                                      |
|---------------------------------------|--------|---------|------------|--------|------------------|--------|-----------------|--------|-----------------------------------------------------------------------------------------------------------|
|                                  |   |    |       |   | Weighted         |   | Average         |   |                                                                                                      |
|                                  |   |    |       |   | Average          |   | Remaining       |   | Aggregate                                                                                                 |
|                                  |   |    |       |   | Exercise         |   | Contractual     |   | Intrinsic                                                                                                 |
|                                  |   | Options |       |   | Price            |   | Term            |   | Value                                                                                                     |
|                                  |   |    |       |   | (per      share) |   | (in      years) |   | (in      thousands)                                                                                       |
| Outstanding      at December 31, 2006 |   |    | 6,211,750  |   |             | $      | 24.24           |   |                                                                                                      |   |   |
| Granted                               |   |    | 1,557,919  |   |             |   | 53.79           |   |                                                                                                      |   |   |
| Exercised                             |   |    | (1,479,040 | )      |             |   | 16.66           |   |                                                                                                      |   |   |
| Forfeited/Canceled                    |   |    | (115,568   | )      |             |   | 49.21           |   |                                                                                                      |   |   |
| Outstanding      at December 31, 2007 |   |    | 6,175,061  |   |             | $      | 32.98           |   |                  5.5 |   |  $      287,768 |
| Exercisable      at December 31, 2007 |   |    | 4,083,097  |   |             | $      | 24.29           |   |                  3.8 |   |  $      225,499 |

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|                       |   | Year      Ended December 31, |    |
|----------------------------|--------|------------------------------|---------|
|                       |   | 2006                         |    |   | 2005 |   |
| Number      of simulations |   |                         | 100,000 |   |   |   | 100,000 |   |
| Expected      volatility   |   |                         | 28.4    | % |   |   | 29.6 | % |
| Risk-free      rate        |   |                         | 4.4     | % |   |   | 3.3 | % |

|                                  |   | Shares          |    |   | Weighted         |   |   | Shares          |   |   | Weighted         |   |
|---------------------------------------|--------|-----------------|---------|--------|------------------|--------|--------|-----------------|--------|--------|------------------|--------|
|                                  |   | Subject      to |    |   | Average          |   |   | Subject      to |   |   | Average          |   |
|                                  |   | Service         |    |   | Grant      Date  |   |   | Market          |   |   | Grant      Date  |   |
|                                  |   | Conditions      |    |   | Fair      Value  |   |   | Conditions      |   |   | Fair      Value  |   |
|                                  |   |            |    |   | (per      share) |   |   |            |   |   | (per      share) |   |
| Outstanding      at December 31, 2006 |   |            | 73,095  |   |             | $      | 35.85  |            |   |   | 204,250          |   |   | $ | 29.27 |   |
| Granted                               |   |            | 547,818 |   |             |   | 53.92  |            |   |   | -                |   |   |   | - |   |
| Vested                                |   |            | (37,475 | )      |             |   | 42.99  |            |   |   | (75,325          | )      |   |   | 22.23 |   |
| Forfeited                             |   |            | (15,848 | )      |             |   | 53.42  |            |   |   | (4,788           | )      |   |   | 40.51 |   |
| Outstanding      at December 31, 2007 |   |            | 567,590 |   |             | $      | 52.33  |            |   |   | 124,137          |   |   | $ | 33.11 |   |

| Note 10—Additional      Shareholders’ EquityInformation |
|---------------------------------------------------------------------|

|                                             |   | Year      Ended December 31, |        |
|--------------------------------------------------|--------|------------------------------|-------------|
|                                             |   | 2007                         |        |   | 2006 |   |
| Common      stock shares issued                  |   |                         |        |   |   |   |
| Shares      at beginning of period               |   |                         | 188,808,087 |   |   |   | 184,893,510 |   |
| Exercise      of common stock options            |   |                         | 1,479,040   |   |   |   | 3,848,521 |   |
| Restricted      stock awards, net of forfeitures |   |                         | 527,182     |   |   |   | 66,056 |   |
| Shares      at end of period                     |   |                         | 190,814,309 |   |   |   | 188,808,087 |   |
| Treasury      stock                              |   |                         |        |   |   |   |   |   |
| Shares      at beginning of period               |   |                         | 16,574,384  |   |   |   | 9,268,932 |   |
| Shares      repurchased                          |   |                         | 2,006,481   |   |   |   | 8,373,400 |   |
| Rabbi      trust shares sold                     |   |                         | -           |   |   |   | (1,067,948 | ) |
| Shares      at end of period                     |   |                         | 18,580,865  |   |   |   | 16,574,384 |   |

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|                                                   |   | Accumulated      Other Comprehensive Loss |     |
|--------------------------------------------------------|--------|-------------------------------------------|----------|
|                                                   |   | Oil      and Gas Cash Flow Hedges         |     |   | Interest      Rate Lock Cash Flow Hedges |   |   | Minimum      Pension Liability and Other |   |   | Total |   |
|                                                   |   | (in      thousands)                       |     |
| December      31, 2004                                 |   | $                                         | (6,939   | ) |   | $ | (4,577 | ) |   | $ | (3,271 | ) |   | $ | (14,787 | ) |
| Cash      flow hedges                                  |   |                                      |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings       |   |                                      | 154,500  |   |   |   | 492 |   |   |   | - |   |   |   | 154,992 |   |
| Unrealized      amounts reclassified into earnings     |   |                                      | 33,638   |   |   |   | - |   |   |   | - |   |   |   | 33,638 |   |
| Unrealized      change in fair value                   |   |                                      | (945,033 | ) |   |   | - |   |   |   | - |   |   |   | (945,033 | ) |
| Net      change in minimum pension liability and other |   |                                      | -        |   |   |   | - |   |   |   | (12,309 | ) |   |   | (12,309 | ) |
| December      31, 2005                                 |   |                                      | (763,834 | ) |   |   | (4,085 | ) |   |   | (15,580 | ) |   |   | (783,499 | ) |
| Cash      flow hedges                                  |   |                                      |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings       |   |                                      | 145,035  |   |   |   | 637 |   |   |   | - |   |   |   | 145,672 |   |
| Unrealized      amounts reclassified into earnings     |   |                                      | 264,520  |   |   |   | - |   |   |   | - |   |   |   | 264,520 |   |
| Unrealized      change in fair value                   |   |                                      | 249,974  |   |   |   | - |   |   |   | - |   |   |   | 249,974 |   |
| Net      change in minimum pension liability and other |   |                                      | -        |   |   |   | - |   |   |   | 16,225 |   |   |   | 16,225 |   |
| Adoption      of SFAS 158                              |   |                                      | -        |   |   |   | - |   |   |   | (33,401 | ) |   |   | (33,401 | ) |
| December      31, 2006                                 |   |                                      | (104,305 | ) |   |   | (3,448 | ) |   |   | (32,756 | ) |   |   | (140,509 | ) |
| Cash      flow hedges                                  |   |                                      |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Realized      amounts reclassified into earnings       |   |                                      | 33,761   |   |   |   | 473 |   |   |   | 2,000 |   |   |   | 36,234 |   |
| Unrealized      change in fair value                   |   |                                      | (184,254 | ) |   |   | (751 | ) |   |   |   |   |   |   | (185,005 | ) |
| Net      change in  other                    |   |                                      | -        |   |   |   | - |   |   |   | 5,095 |   |   |   | 5,095 |   |
| December      31, 2007                                 |   | $                                         | (254,798 | ) |   | $ | (3,726 | ) |   | $ | (25,661 | ) |   | $ | (284,185 | ) |

| Note      11—Benefit      Plans |
|---------------------------------------|

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|                                                                                                  |   | Retirement      and Restoration Plan |    |   | Medical      and Life Plan |   |
|-------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|----------------------------|--------|
|                                                                                                  |   | 2007                                 |    |   | 2006                       |   |   | 2007 |   |   | 2006 |   |
|                                                                                                  |   | (in      thousands)                  |    |
| Change      in benefit obligation                                                                     |   |                                 |    |   |                       |   |   |   |   |   |   |   |
| Benefit      obligation at beginning of year                                                          |   | $                                    | 175,154 |   |                       | $      | 168,301 |   |   | $ | 22,373 |   |   | $ | 27,223 |   |
| Service      cost                                                                                     |   |                                 | 11,671  |   |                       |   | 11,781 |   |   |   | 1,962 |   |   |   | 2,207 |   |
| Interest      cost                                                                                    |   |                                 | 9,978   |   |                       |   | 9,550 |   |   |   | 1,191 |   |   |   | 1,377 |   |
| Plan      participants' contributions                                                                 |   |                                 | -       |   |                       |   | - |   |   |   | 332 |   |   |   | 272 |   |
| Amendments                                                                                            |   |                                 | 7,836   |   |                       |   | (8,327 | ) |   |   | - |   |   |   | (5,711 | ) |
| Benefits      paid                                                                                    |   |                                 | (6,513  | )      |                       |   | (6,169 | ) |   |   | (830 | ) |   |   | (795 | ) |
| Actuarial      (gain) loss                                                                            |   |                                 | (10,633 | )      |                       |   | 18 |   |   |   | (2,640 | ) |   |   | (2,200 | ) |
| Benefit      obligation at end of year                                                                |   |                                 | 187,493 |   |                       |   | 175,154 |   |   |   | 22,388 |   |   |   | 22,373 |   |
| Change      in plan assets                                                                            |   |                                 |    |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at beginning of year                                                   |   |                                 | 136,890 |   |                       |   | 94,832 |   |   |   | - |   |   |   | - |   |
| Actual      return on plan assets                                                                     |   |                                 | 12,982  |   |                       |   | 12,593 |   |   |   | - |   |   |   | - |   |
| Employer      contributions                                                                           |   |                                 | 11,395  |   |                       |   | 35,634 |   |   |   | 498 |   |   |   | 523 |   |
| Plan      participants' contributions                                                                 |   |                                 | -       |   |                       |   | - |   |   |   | 332 |   |   |   | 272 |   |
| Benefits      paid                                                                                    |   |                                 | (6,513  | )      |                       |   | (6,169 | ) |   |   | (830 | ) |   |   | (795 | ) |
| Fair      value of plan assets at end of year                                                         |   |                                 | 154,754 |   |                       |   | 136,890 |   |   |   | - |   |   |   | - |   |
| Funded      status                                                                                    |   |                                 |    |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Funded      status at end of year                                                                     |   |                                 | (32,739 | )      |                       |   | (38,264 | ) |   |   | (22,388 | ) |   |   | (22,373 | ) |
| Net      amount recognized in consolidated balance sheets (after adoption      of  FAS 158)      |   |                                 | (32,739 | )      |                       |   | (38,264 | ) |   |   | (22,388 | ) |   |   | (22,373 | ) |
| Amounts      recognized in consolidated balance      sheets consist of:                          |   |                                 |    |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Current      liabilities                                                                              |   |                                 | (2,958  | )      |                       |   | (1,205 | ) |   |   | (1,197 | ) |   |   | (941 | ) |
| Noncurrent      liabilities                                                                           |   |                                 | (29,781 | )      |                       |   | (37,059 | ) |   |   | (21,191 | ) |   |   | (21,432 | ) |
| Net      amount recognized in consolidated balance sheets (after adoption      of  FAS 158) |   |                                 | (32,739 | )      |                       |   | (38,264 | ) |   |   | (22,388 | ) |   |   | (22,373 | ) |
| Amounts      not yet reflected in net periodic benefit      cost and included in AOCL            |   |                                 |    |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Transition      obligation                                                                            |   |                                 | (614    | )      |                       |   | (854 | ) |   |   | - |   |   |   | - |   |
| Prior      service (cost) credit                                                                      |   |                                 | (2,981  | )      |                       |   | 5,372 |   |   |   | 5,746 |   |   |   | 6,672 |   |
| Accumulated      loss                                                                                 |   |                                 | (34,051 | )      |                       |   | (49,978 | ) |   |   | (13,691 | ) |   |   | (17,384 | ) |
| AOCL                                                                                                  |   |                                 | (37,646 | )      |                       |   | (45,460 | ) |   |   | (7,945 | ) |   |   | (10,712 | ) |
| Cumulative      employer      contributions in excess of net      periodic benefit cost          |   |                                 | 4,907   |   |                       |   | 7,196 |   |   |   | (14,443 | ) |   |   | (11,661 | ) |
| Net      amount recognized in consolidated balance sheet (after adoption      of  FAS 158)  |   | $                                    | (32,739 | )      |                       |   | (38,264 | ) |   | $ | (22,388 | ) |   |   | (22,373 | ) |
| Change      in AOCL due to adoption of FAS 158                                                        |   |                                 |    |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Additional      minimum liability (before FAS 158)                                                    |   |                                 |    |   |                       |   | (2,708 | ) |   |   |   |   |   |   | - |   |
| Intangible      asset (before FAS 158)                                                                |   |                                 |    |   |                       |   | 65 |   |   |   |   |   |   |   | - |   |
| AOCL      (before FAS 158)                                                                            |   |                                 |    |   |                       |   | (2,643 | ) |   |   |   |   |   |   | - |   |
| Net      increase in AOCL                                                                             |   |                                 |    |   |                       | $      | (42,817 | ) |   |   |   |   |   | $ | (10,712 | ) |

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Table of Contents

|                                                                                | Retirement      and Restoration Plan |    | Medical      and Life Plan   |   |
|-------------------------------------------------------------------------------------|--------------------------------------|---------|------------------------------|--------|
|                                                                                | Year      Ended December 31,         |    | Year      Ended December 31, |   |
|                                                                                | 2007                                 |    | 2006                         |   |   | 2005 |   | 2007 |   | 2006 |   | 2005 |   |
|                                                                                | (in      thousands)                  |    |
| Components      of net periodic benefit cost                                        |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |
| Service      cost                                                                   | $                                    | 11,671  |                         | $      | 11,781 |   |   | $ | 6,372 |   | $ | 1,962 |   | $ | 2,207 |   | $ | 963 |   |
| Interest      cost                                                                  |                                 | 9,978   |                         |   | 9,550 |   |   |   | 7,807 |   |   | 1,191 |   |   | 1,377 |   |   | 943 |   |
| Expected      return on plan assets                                                 |                                 | (11,045 | )                            |   | (9,320 | ) |   |   | (7,094 | ) |   | - |   |   | - |   |   | - |   |
| Amortization      of transition obligation                                          |                                 | 240     |                         |   | 239 |   |   |   | 24 |   |   | - |   |   | - |   |   | - |   |
| Amortization      of prior  service (credit) cost                         |                                 | (516    | )                            |   | (220 | ) |   |   | 398 |   |   | (925 | ) |   | (439 | ) |   | (236 | ) |
| Amortization      of net loss                                                       |                                 | 3,354   |                         |   | 2,912 |   |   |   | 1,034 |   |   | 1,053 |   |   | 1,170 |   |   | 760 |   |
| Net      periodic benefit cost                                                      | $                                    | 13,682  |                         | $      | 14,942 |   |   | $ | 8,541 |   | $ | 3,281 |   | $ | 4,315 |   | $ | 2,430 |   |
| Other      changes recognized in AOCL                                               |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prior      service cost arising during period                                       | $                                    | 7,836   |                         |   | * |   |   |   | * |   | $ | - |   |   |   * |   |   | * |   |
| Net      gain arising during period                                                 |                                 | (12,571 | )                            |   | * |   |   |   | * |   |   | (2,639 | ) |   |   * |   |   | * |   |
| Amortization      of transition obligation                                          |                                 | (240    | )                            |   | * |   |   |   | * |   |   | - |   |   |   * |   |   | * |   |
| Amortization      of prior service credit                                           |                                 | 516     |                         |   | * |   |   |   | * |   |   | 925 |   |   |   * |   |   | * |   |
| Amortization      of net loss                                                       |                                 | (3,354  | )                            |   | * |   |   |   | * |   |   | (1,053 | ) |   |   * |   |   | * |   |
| Total      recognized in  AOCL                                            | $                                    | (7,813  | )                            |   | * |   |   |   | * |   | $ | (2,767 | ) |   |   * |   |   | * |   |
| Expected      amortizations for next fiscal year                                    |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of transition obligation                                          |                                 | 240     |                         |   | 240 |   |   |   | * |   |   | - |   |   | - |   |   | * |   |
| Amortization      of prior service cost (credit)                                    |                                 | 191     |                         |   | (516 | ) |   |   | * |   |   | (925 | ) |   | (925 | ) |   | * |   |
| Amortization      of net loss                                                       |                                 | 1,668   |                         |   | 3,221 |   |   |   | * |   |   | 854 |   |   | 1,211 |   |   | * |   |
|                                                                                |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional      Information                                                         |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      in minimum liability included in AOCL                                 |                                 | *       |                         |   | * |   |   | $ | 21,638 |   |   | * |   |   | * |   |   | - |   |
| Weighted-average      assumptions used to determine      benefit obligations        |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                                                  |                                 | 6.50    | %                            |   | 5.75 | % |   |   | 5.50 | % |   | 6.25 | % |   | 5.75 | % |   | 5.50 | % |
| Rate      of compensation increase                                                  |                                 | 5.00    | %                            |   | 5.00 | % |   |   | 5.00 | % |   | - |   |   | - |   |   | - |   |
| Weighted-average      assumptions used to determine      net periodic benefit costs |                                 |    |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate (1)                                                              |                                 | 5.75    | %                            |   | 5.50%      / 6.25 | % |   |   | 6.00 | % |   | 5.75 | % |   | 5.50%      / 6.25 | % |   | 5.75 | % |
| Expected      long-term rate of return on plan assets                               |                                 | 8.25    | %                            |   | 8.25 | % |   |   | 8.25 | % |   | - |   |   | - |   |   | - |   |
| Rate      of compensation increase                                                  |                                 | 5.00    | %                            |   | 5.00 | % |   |   | 4.00 | % |   | - |   |   | - |   |   | - |   |

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|                                                                                                       |   | Retirement      and Restoration Plan |    |
|------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|
|                                                                                                       |   | 2007                                 |    |   |   | 2006 |   |
|                                                                                                       |   |  (in      thousands)            |    |
| Accumulated      benefit obligation                                                                        |   | $                                    | 162,595 |   |   |   | $ | 142,136 |   |
| Information      for pension plans with projected      benefit obligations in      excess of plan assets   |   |                                 |    |   |   |   |   |   |   |
| Projected      benefit obligation                                                                          |   | $                                    | 187,493 |   |   |   | $ | 175,154 |   |
| Fair      value of plan assets                                                                             |   |                                 | 154,754 |   |   |   |   | 136,890 |   |
| Information      for pension plans with accumulated      benefit      obligations in excess of plan assets |   |                                 |    |   |   |   |   |   |   |
| Accumulated      benefit obligation                                                                        |   | $                                    | 25,131  |   |   |   | $ | 20,542 |   |
| Fair      value of plan assets                                                                             |   |                                 | -       |   |   |   |   | - |   |

|                                                                                    |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Health      care cost trend rate assumed for next year                                  |   |   | 9%     |   |   |   | 10% |   |
| Rate      to which the cost trend rate is assumed to decline (ultimate trend      rate) |   |   | 5%     |   |   |   | 5% |   |
| Year      rate reaches ultimate trend rate                                              |   | 2012   |   |   | 2012   |   |

|                                                               |   | 1% Increase    |   |   | 1% Decrease |   |
|--------------------------------------------------------------------|--------|---------------------|--------|--------|------------------|--------|
|                                                               |   | (in      thousands) |   |
| Effect      on total service and interest cost components for 2007 |   | $                   | 390    |   |             | $      | (341 | ) |
| Effect      on year-end 2007 postretirement benefit obligation     |   |                | 2,270  |   |             |   | (2,025 | ) |

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Table of Contents

|                   |   | Target     |   |   |             |   |   |   |   |
|------------------------|--------|------------|--------|--------|------------------|--------|--------|--------|--------|
|                   |   | Allocation |   |   | Plan      Assets |   |
|                   |   | 2008       |   |   | 2007             |   |   | 2006   |   |
| Asset      Category    |   |       |   |   |             |   |   |   |   |
| Equity      Securities |   |       | 70     | %      |             |   | 70     | %      |   |   | 70 | % |
| Fixed      income      |   |       | 30     | %      |             |   | 30     | %      |   |   | 28 | % |
| Other                  |   |       | -      |   |             |   | -      |   |   |   | 2 | % |
| Total                  |   |       | 100    | %      |             |   | 100    | %      |   |   | 100 | % |

|                    |    | Retirement      and Restoration Plan |   | Medical      and Life Plan |
|-------------------------|---------|--------------------------------------|--------|----------------------------|
|                    |    | (in      thousands)                  |
| 2008                    |  $ |  25,049                         |   |                       | $ | 1,197 |   |
| 2009                    |    |     12,000       |   |                       |   |     1,370 |   |
| 2010                    |    |     13,586       |   |                       |   |     1,499 |   |
| 2011                    |    |     16,722       |   |                       |   |     1,914 |   |
| 2012                    |    |     18,507       |   |                       |   |     2,198 |   |
| Years      2013 to 2017 |    |     99,516       |   |                       |   |   14,280 |   |

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Table of Contents

|                                                                   |   | December      31,   |      |
|------------------------------------------------------------------------|--------|---------------------|-----------|
|                                                                   |   | 2007                |      |   | 2006 |   |
|                                                                   |   | (in      thousands) |      |
| Rabbi      trust assets                                                |   |                |      |   |   |   |
| Mutual      fund investments                                           |   | $                   | 106,581   |   |   | $ | 100,767 |   |
| Noble      Energy common stock (at market value)                       |   |                | 87,554    |   |   |   | 54,027 |   |
| Total      rabbi trust assets                                          |   |                | 194,135   |   |   |   | 154,794 |   |
| Liability      under Patina deferred compensation plan                 |   | $                   | 194,135   |   |   | $ | 154,794 |   |
| Number      of shares of Noble Energy common stock held by rabbi trust |   |                | 1,101,032 |   |   |   | 1,101,032 |   |

| Note 12—Derivative      Instruments and HedgingActivities |
|-----------------------------------------------------------------|

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Table of Contents

|                                                                                               |   | Year      Ended December 31, |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                               |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                                                                               |   | (in      thousands)          |   |
| Ineffectiveness      (gains) losses                                                                |   | $                            | (2,520 | ) |   | $ | 9,502 |   |   | $ | 930 |   |
| Reclassified      from AOCL                                                                        |   |                         | -      |   |   |   | 423,910 |   |   |   | 51,750 |   |
| Mark-to-market      gain on derivative instruments not accounted for as cash flow      hedges |   |                         | -      |   |   |   | (41,045 | ) |   |   | (20,000 | ) |
| (Gain)      loss on derivative instruments                                                         |   | $                            | (2,520 | ) |   | $ | 392,367 |   |   | $ | 32,680 |   |

|                                                   |    | Year      Ended December 31,                      |
|--------------------------------------------------------|---------|---------------------------------------------------|
|                                                   |    | 2007                                              |   | 2006 |   | 2005 |
|                                                   |    | (in      thousands)                               |
| Decrease      in crude oil sales                       |    |      (223,347)           |   |       (190,730) |   |     (140,486) |
| Increase      (decrease) in natural gas sales          |    |        169,242 |   |         (41,698) |   |       (97,206) |
| Total      decrease in crude oil and natural gas sales |  $ |  (54,105)                                    |  $ |  (232,428) |  $ | (237,692) |

|                   |   | Natural      Gas |    |   | Crude      Oil     |   |
|------------------------|--------|------------------|---------|--------|--------------------|--------|
|                   |   |             |    |   | Average      Price |   |   |   |   |   | Average      price |   |
| Production      Period |   | MMBtupd          |    |   | per      MMBtu     |   |   | Bopd |   |   | per      Bbl |   |
| 2008      (NYMEX)      |   |             | 170,000 |   |               | $      | 5.66 |   |   |   | 16,500 |   |   | $ | 38.23 |   |
| 2008      (Brent)      |   |             | -       |   |               |   | - |   |   |   | 2,000 |   |   |   | 88.18 |   |
| 2009      (NYMEX)      |   |             | -       |   |               |   | - |   |   |   | 7,000 |   |   |   | 86.67 |   |
| 2009      (Brent)      |   |             | -       |   |               |   | - |   |   |   | 2,000 |   |   |   | 87.98 |   |

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Table ofContents

|                                |   |    |    |   | Average        |   |
|-------------------------------------|--------|---------|---------|--------|----------------|--------|
|                                |   |    |    |   | Differential   |   |
| Production      Period              |   | MMBtupd |    |   | per      MMBtu |   |
| 2008      (CIG (1)      vs. NYMEX)  |   |    | 100,000 |   |           | $      | 1.66 |   |
| 2008      (ANR (2)      vs. NYMEX)  |   |    | 40,000  |   |           |   | 1.01 |   |
| 2008      (PEPL (3)      vs. NYMEX) |   |    | 10,000  |   |           |   | 0.98 |   |
|                                |   |    |    |   |           |   |   |   |

|                   |   | Natural      Gas |   |   | Crude      Oil     |   |
|------------------------|--------|------------------|--------|--------|--------------------|--------|
|                   |   |             |   |   | Average      Price |   |   |   |   |   | Average      Price |   |
|                   |   |             |   |   | per      MMBtu     |   |   |   |   |   | per      Bbl |   |
| Production      Period |   | MMBtupd          |   |   | Floor              |   |   | Ceiling |   |   | Bopd |   |   | Floor |   |   | Ceiling |   |
|                   |   |             |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008      (NYMEX)      |   |             | -      |   |               | $      | - |   |   | $ | - |   |   |   | 3,100 |   |   | $ | 60.00 |   |   | $ | 72.40 |   |
| 2008      (CIG)        |   |             | 14,000 |   |               |   | 6.75 |   |   |   | 8.70 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| 2008      (Brent)      |   |             | -      |   |               |   | - |   |   |   | - |   |   |   | 4,074 |   |   |   | 45.00 |   |   |   | 66.52 |   |
| 2009      (NYMEX)      |   |             | -      |   |               |   | - |   |   |   | - |   |   |   | 3,700 |   |   |   | 60.00 |   |   |   | 70.00 |   |
| 2009      (CIG)        |   |             | 15,000 |   |               |   | 6.00 |   |   |   | 9.90 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| 2009      (Brent)      |   |             | -      |   |               |   | - |   |   |   | - |   |   |   | 3,074 |   |   |   | 45.00 |   |   |   | 63.04 |   |
| 2010      (NYMEX)      |   |             | -      |   |               |   | - |   |   |   | - |   |   |   | 3,500 |   |   |   | 55.00 |   |   |   | 73.80 |   |
| 2010      (CIG)        |   |             | 15,000 |   |               |   | 6.25 |   |   |   | 8.10 |   |   |   | - |   |   |   | - |   |   |   | - |   |

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Table of Contents

|                                                  |   | December      31,   |     |
|-------------------------------------------------------|--------|---------------------|----------|
|                                                  |   | 2007                |     |   | 2006 |   |
|                                                  |   | (in      thousands) |     |
| Crude      oil and natural gas derivative instruments |   |                |     |   |   |   |
| Current      asset                                    |   | $                   | 15,058   |   |   | $ | 35,242 |   |
| Long-term      asset                                  |   |                | 4,829    |   |   |   | 2,862 |   |
| Current      liability                                |   |                | (540,217 | ) |   |   | (254,625 | ) |
| Long-term      liability                              |   |                | (82,803  | ) |   |   | (328,875 | ) |

| Note 13—Equity Method      Investments |
|----------------------------------------------|

|   | · | 45%      interest in Atlantic Methanol Production Company, LLC (“AMPCO”), which      owns and operates a methanol plant and related facilities in Equatorial      Guinea; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 28%      interest in Alba Plant LLC (“Alba Plant”), which owns and operates a      liquefied petroleum gas processing plant in Equatorial    Guinea. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   | December      31,   |    |
|--------------------------------------|--------|---------------------|---------|
|                                 |   | 2007                |    |   | 2006 |   |
|                                 |   | (in      thousands) |    |
| Equity      method investments       |   |                |    |   |   |   |
| AMPCO                                |   | $                   | 199,605 |   |   | $ | 211,325 |   |
| Alba      Plant                      |   |                | 142,540 |   |   |   | 146,051 |   |
| Other                                |   |                | 14,984  |   |   |   | 15,996 |   |
| Total      equity method investments |   | $                   | 357,129 |   |   | $ | 373,372 |   |

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Table of Contents

|                                      |   |   |                         |    |   | December      31,   |    |
|-------------------------------------------|--------|--------|------------------------------|---------|--------|---------------------|---------|
|                                      |   |   |                         |    |   | 2007                |    |   | 2006 |   |
|                                      |   |   |                         |    |   | (in      thousands) |    |
| Balance      sheet information            |   |   |                         |    |   |                |    |   |   |   |
| Current      assets                       |   |   |                         |    |   | $                   | 408,000 |   |   | $ | 252,201 |   |
| Noncurrent      assets                    |   |   |                         |    |   |                | 813,601 |   |   |   | 857,465 |   |
| Current      liabilities                  |   |   |                         |    |   |                | 273,164 |   |   |   | 171,028 |   |
| Noncurrent      liabilities               |   |   |                         |    |   |                | 31,278  |   |   |   | 2,385 |   |
|                                      |   |   |                         |    |
|                                      |   |   | Year      Ended December 31, |    |
|                                      |   |   | 2007                         |    |   | 2006                |    |   | 2005 |   |
|                                      |   |   | (in      thousands)          |    |
| Statements      of operations information |   |   |                         |    |   |                |    |   |   |   |   |   |
| Operating      revenues                   |   |   | $                            | 934,419 |   |                | $       | 702,556 |   |   | $ | 464,000 |   |
| Less      cost of goods sold              |   |   |                         | 220,101 |   |                |    | 202,304 |   |   |   | 136,508 |   |
| Gross      margin                         |   |   |                         | 714,318 |   |                |    | 500,252 |   |   |   | 327,492 |   |
| Less      other expense                   |   |   |                         | 36,486  |   |                |    | 47,487 |   |   |   | 35,798 |   |
| Less      income tax expense              |   |   |                         | 44,150  |   |                |    | 23,451 |   |   |   | 67,142 |   |
| Net      income                           |   |   | $                            | 633,682 |   |                | $       | 429,314 |   |   | $ | 224,552 |   |

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Table of Contents

|                     |   |                |    |   |       |   |   |               |   |   |             |   |   |   |   |
|--------------------------|--------|---------------------|---------|--------|------------|--------|--------|--------------------|--------|--------|------------------|--------|--------|--------|--------|
|                     |   | Drilling      and   |    |   |       |   |   |               |   |   |             |   |   |   |   |
|                     |   | Equipment,          |    |   |       |   |   | Office             |   |   | Oil      and Gas |   |   |   |   |
|                     |   | and      Purchase   |    |   | Throughput |   |   | Buildings      and |   |   | Operations       |   |   |   |   |
|                     |   | Obligations         |    |   | Agreement  |   |   | Facilities         |   |   | Equipment        |   |   | Total  |   |
|                     |   | (in      thousands) |    |
| 2008                     |   | $                   | 443,926 |   |       | $      | -      |               |   | $      | 7,289            |   |   | $      | 5,467  |   |   | $ | 456,682 |   |
| 2009                     |   |                | 94,444  |   |       |   | 19,000 |               |   |   | 7,426            |   |   |   | 4,448  |   |   |   | 125,318 |   |
| 2010                     |   |                | 79,491  |   |       |   | 19,000 |               |   |   | 7,069            |   |   |   | 2,159  |   |   |   | 107,719 |   |
| 2011                     |   |                | 65,715  |   |       |   | 19,000 |               |   |   | 6,736            |   |   |   | -      |   |   |   | 91,451 |   |
| 2012                     |   |                | 41,772  |   |       |   | 19,000 |               |   |   | 6,511            |   |   |   | -      |   |   |   | 67,283 |   |
| 2013      and thereafter |   |                | -       |   |       |   | 19,000 |               |   |   | 17,863           |   |   |   | -      |   |   |   | 36,863 |   |
| Total                    |   | $                   | 725,348 |   |       | $      | 95,000 |               |   | $      | 52,894           |   |   | $      | 12,074 |   |   | $ | 885,316 |   |

| Note 15—Segment      Information |
|----------------------------------------|

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Table of Contents

|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   | Other      Int'l,    |   |
|-------------------------------------------------|--------|---------------------|------------|--------|--------|--------|-----------|--------|--------|--------|----------------|--------|--------|--------|---------|--------|----------------------|--------|
|                                            |   |                |       |   | United |   |      | West   |   |   |           |   |   |   |    |   | Corporate      & |   |
|                                            |   | Total               |       |   | States |   |      | Africa |   |   | North      Sea |   |   | Israel |    |   | Marketing            |   |
|                                            |   | (in      thousands) |       |
| Year      Ended December 31, 2007               |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |
| Revenues      from third parties                |   | $                   | 3,061,102  |   |   | $      | 1,609,626 |   |   | $      | 405,988        |   |   | $      | 363,886 |   |                 | $      | 113,001 |   |   | $ | 568,601 |   |
| Intersegment      revenue                       |   |                | -          |   |   |   | 342,809   |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | (342,809 | ) |
| Income      from equity method investees        |   |                | 210,928    |   |   |   | -         |   |   |   | 210,928        |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Total      Revenues                             |   |                | 3,272,030  |   |   |   | 1,952,435 |   |   |   | 616,916        |   |   |   | 363,886 |   |                 |   | 113,001 |   |   |   | 225,792 |   |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| DD&A                                        |   |                | 727,981    |   |   |   | 574,001   |   |   |   | 25,315         |   |   |   | 79,450  |   |                 |   | 17,842 |   |   |   | 31,373 |   |
| Gain      on derivative instruments             |   |                | (2,520     | )      |   |   | (2,520    | )      |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Loss      on involuntary conversion             |   |                | 51,406     |   |   |   | 51,406    |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Income      (loss) before taxes                 |   |                | 1,367,567  |   |   |   | 809,806   |   |   |   | 517,450        |   |   |   | 220,779 |   |                 |   | 86,022 |   |   |   | (266,490 | ) |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| Investments      in equity method investees     |   |                | 357,129    |   |   |   | 357,129   |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Additions      to long-lived assets             |   |                | 990,861    |   |   |   | 877,941   |   |   |   | 23,155         |   |   |   | 40,969  |   |                 |   | 24,716 |   |   |   | 24,080 |   |
| Total      assets at December 31, 2007      (1) |   |                | 10,830,896 |   |   |   | 7,917,771 |   |   |   | 1,354,604      |   |   |   | 562,140 |   |                 |   | 268,386 |   |   |   | 727,995 |   |
| Year      Ended December 31, 2006               |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| Revenues      from third parties                |   | $                   | 2,800,720  |   |   | $      | 1,510,689 |   |   | $      | 413,682        |   |   | $      | 115,232 |   |                 | $      | 92,373 |   |   | $ | 668,744 |   |
| Intersegment      revenue                       |   |                | -          |   |   |   | 425,901   |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | (425,901 | ) |
| Income      from equity method investees        |   |                | 139,362    |   |   |   | -         |   |   |   | 139,362        |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Total      Revenues                             |   |                | 2,940,082  |   |   |   | 1,936,590 |   |   |   | 553,044        |   |   |   | 115,232 |   |                 |   | 92,373 |   |   |   | 242,843 |   |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| DD&A                                        |   |                | 622,608    |   |   |   | 543,431   |   |   |   | 23,620         |   |   |   | 8,123   |   |                 |   | 13,947 |   |   |   | 33,487 |   |
| Loss      on derivative instruments             |   |                | 392,367    |   |   |   | 392,367   |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Income      (loss) before taxes                 |   |                | 1,096,217  |   |   |   | 631,087   |   |   |   | 493,777        |   |   |   | 72,803  |   |                 |   | 71,318 |   |   |   | (172,768 | ) |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| Investments      in equity method investees     |   |                | 373,372    |   |   |   | -         |   |   |   | 373,372        |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Additions      to long-lived assets             |   |                | 1,916,139  |   |   |   | 1,615,435 |   |   |   | 35,121         |   |   |   | 234,877 |   |                 |   | 841 |   |   |   | 29,865 |   |
| Total      assets at December 31, 2006      (1) |   |                | 9,588,625  |   |   |   | 7,224,920 |   |   |   | 960,357        |   |   |   | 343,236 |   |                 |   | 256,913 |   |   |   | 803,199 |   |
| Year      Ended December 31, 2005               |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| Revenues      from third parties                |   | $                   | 2,095,911  |   |   | $      | 913,564   |   |   | $      | 281,902        |   |   | $      | 123,584 |   |                 | $      | 65,050 |   |   | $ | 711,811 |   |
| Intersegment      revenue                       |   |                | -          |   |   |   | 460,808   |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | (460,808 | ) |
| Income      from equity method investees        |   |                | 90,812     |   |   |   | -         |   |   |   | 90,812         |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Total      Revenues                             |   |                | 2,186,723  |   |   |   | 1,374,372 |   |   |   | 372,714        |   |   |   | 123,584 |   |                 |   | 65,050 |   |   |   | 251,003 |   |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| DD&A                                        |   |                | 390,544    |   |   |   | 311,153   |   |   |   | 27,121         |   |   |   | 9,888   |   |                 |   | 11,188 |   |   |   | 31,194 |   |
| Loss      on derivative instruments             |   |                | 32,680     |   |   |   | 32,680    |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Loss      on involuntary conversion             |   |                | 1,000      |   |   |   | 1,000     |   |   |   | -              |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Income      (loss) before taxes                 |   |                | 968,660    |   |   |   | 585,988   |   |   |   | 309,239        |   |   |   | 88,524  |   |                 |   | 46,468 |   |   |   | (61,559 | ) |
|                                            |   |                |       |   |   |   |      |   |   |   |           |   |   |   |    |   |                 |   |   |   |   |   |   |   |
| Investments      in equity method investees     |   |                | 420,362    |   |   |   | -         |   |   |   | 420,362        |   |   |   | -       |   |                 |   | - |   |   |   | - |   |
| Additions      to long-lived assets             |   |                | 4,382,005  |   |   |   | 4,345,604 |   |   |   | 2,738          |   |   |   | 15,287  |   |                 |   | 5,928 |   |   |   | 12,448 |   |
| Total      assets at December 31, 2005 (1)      |   |                | 8,878,033  |   |   |   | 6,577,853 |   |   |   | 877,409        |   |   |   | 146,311 |   |                 |   | 266,312 |   |   |   | 1,010,148 |   |

|  (1) | The      US reporting unit includes goodwill of $760 million at December 31, 2007,      $781 million at December 31, 2006 and $863 million at December      31, 2005. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Note 16—Recently      Issued Pronouncements |
|---------------------------------------------------|

----

Table of Contents

Supplemental Oil and Gas Information(Unaudited)

----

Table of Contents

| Proved      Gas Reserves (Unaudited) |
|--------------------------------------|

|                                                  |  Natural      Gas and Casinghead Gas (MMcf) |
|-------------------------------------------------------|--------------------------------------------------|
|                                                  |                                             | United |   |   | West |   |   |   |   |   |   |   |   | North |   |   | Other |   |   |   |   |
|                                                  |                                             | States |   |   | Africa |   |   | Israel |   |   | Ecuador |   |   | Sea |   |   | Int'l (1) |   |   | Total |   |
| Proved      reserves as of:                           |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2004                                |                                             |   | 519,735 |   |   |   | 917,409 |   |   |   | 417,293 |   |   |   | 119,341 |   |   |   | 11,714 |   |   |   | 1,369 |   |   |   | 1,986,861 |   |
| Revisions      of previous estimates (2)              |                                             |   | 18,644 |   |   |   | 7,732 |   |   |   | 481 |   |   |   | 32,800 |   |   |   | 3,200 |   |   |   | (1,301 | ) |   |   | 61,556 |   |
| Extensions,      discoveries and other additions (3)  |                                             |   | 144,335 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 144,335 |   |
| Purchase      of minerals in place (4)                |                                             |   | 1,083,959 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,083,959 |   |
| Sale      of minerals in place                        |                                             |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Production                                            |                                             |   | (125,543 | ) |   |   | (23,938 | ) |   |   | (24,228 | ) |   |   | (8,321 | ) |   |   | (3,394 | ) |   |   | (68 | ) |   |   | (185,492 | ) |
| December      31, 2005                                |                                             |   | 1,641,130 |   |   |   | 901,203 |   |   |   | 393,546 |   |   |   | 143,820 |   |   |   | 11,520 |   |   |   | - |   |   |   | 3,091,219 |   |
| Revisions      of previous estimates (5)              |                                             |   | (82,371 | ) |   |   | 57,543 |   |   |   | 260 |   |   |   | 32,927 |   |   |   | 10,485 |   |   |   | 278 |   |   |   | 19,122 |   |
| Extensions,      discoveries and other additions (6)  |                                             |   | 314,140 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 314,140 |   |
| Purchase      of minerals in place (7)                |                                             |   | 141,610 |   |   |   | 2,532 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 144,142 |   |
| Sale      of minerals in place (8)                    |                                             |   | (110,486 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (110,486 | ) |
| Production                                            |                                             |   | (164,830 | ) |   |   | (16,579 | ) |   |   | (33,906 | ) |   |   | (8,933 | ) |   |   | (2,967 | ) |   |   | (108 | ) |   |   | (227,323 | ) |
| December      31, 2006                                |                                             |   | 1,739,193 |   |   |   | 944,699 |   |   |   | 359,900 |   |   |   | 167,814 |   |   |   | 19,038 |   |   |   | 170 |   |   |   | 3,230,814 |   |
| Revisions      of previous estimates (9)              |                                             |   | (67,003 | ) |   |   | 44,256 |   |   |   | (52 | ) |   |   | 29,872 |   |   |   | (1,062 | ) |   |   | (170 | ) |   |   | 5,841 |   |
| Extensions,      discoveries and other additions (10) |                                             |   | 315,687 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,086 |   |   |   | - |   |   |   | 318,773 |   |
| Purchase      of minerals in place                    |                                             |   | 2,957 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,957 |   |
| Sale      of minerals in place                        |                                             |   | (1 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1 | ) |
| Production                                            |                                             |   | (150,457 | ) |   |   | (48,349 | ) |   |   | (40,449 | ) |   |   | (9,385 | ) |   |   | (2,276 | ) |   |   | - |   |   |   | (250,916 | ) |
| December      31, 2007                                |                                             |   | 1,840,376 |   |   |   | 940,606 |   |   |   | 319,399 |   |   |   | 188,301 |   |   |   | 18,786 |   |   |   | - |   |   |   | 3,307,468 |   |
|                                                  |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved      developed reserves as of:                 |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2004                                |                                             |   | 430,513 |   |   |   | 447,347 |   |   |   | 360,428 |   |   |   | 119,341 |   |   |   | 11,714 |   |   |   | 1,118 |   |   |   | 1,370,461 |   |
| December      31, 2005                                |                                             |   | 1,278,788 |   |   |   | 431,142 |   |   |   | 336,681 |   |   |   | 143,820 |   |   |   | 11,520 |   |   |   | - |   |   |   | 2,201,951 |   |
| December      31, 2006                                |                                             |   | 1,255,271 |   |   |   | 359,691 |   |   |   | 303,035 |   |   |   | 167,814 |   |   |   | 19,038 |   |   |   | 170 |   |   |   | 2,105,019 |   |
| December      31, 2007                                |                                             |   | 1,259,331 |   |   |   | 830,191 |   |   |   | 262,534 |   |   |   | 188,301 |   |   |   | 15,700 |   |   |   | - |   |   |   | 2,556,057 |   |

|  (1) | Other      International includes Argentina. We have entered into an agreement to      sell our interest in Argentina effective July 1, 2007. We expect the sale,      which is subject to regulatory and partner approvals, to close in      2008. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Increases      for Ecuador are due to better than expected  performance. |
|-----|--------------------------------------------------------------------------|

| (3) | The      increase in US proved reserves includes 57 Bcf in the Wattenberg field and      40 Bcf in the Mid-continent area, primarily due to infill drilling      activities. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Purchase      of minerals in place is the result of the Patina Merger. See Note      3—Acquisitions and Divestitures. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (5) | Increases      for Ecuador and North Sea are due to better than expected      performance. |
|-----|--------------------------------------------------------------------------------------------|

| (6) | The      increase in US proved reserves includes 140 Bcf in the Wattenberg field,      77 Bcf in the Piceance basin and 55 Bcf in the Mid-continent area,      primarily due to infill drillingactivities. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Purchase      of minerals in place includes 128 Bcf acquired in the purchase of U.S.      Exploration. See Note 3—Acquisitions and  Divestitures. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Sale      of minerals in place is primarily due to sale of Gulf of Mexico shelf      properties. See Note 3—Acquisitions and  Divestitures. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | The      negative revisions within the US are primarily due to 103 Bcf of natural      gas being reflected in the proved oil reserve table as NGLs, partially      offset by positive revisions resulting from an increase in commodity      price.  West Africa’s positive revisions are primarily due to      additional production allowances related to LNG sales.  Positive      revisions in Ecuador are related to better than expected well      performance. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10) | The      increase in US proved reserves includes 142 Bcf in the Wattenberg field,      83 Bcf in the Piceance basin and 19 Bcf in the Niobrara trend, primarily      due to infill drilling activities. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Proved      Oil Reserves (Unaudited) |
|--------------------------------------|

|                                                 |   | Crude      Oil, Condensate and NGLs (MBbls) |    |
|------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                 |   | United                                      |    |   | West |   |   | North |   |   | Other |   |   |   |   |
|                                                 |   | States                                      |    |   | Africa |   |   | Sea |   |   | Int'l (1) |   |   | Total |   |
| Proved      reserves as of:                          |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2004                               |   |                                        | 55,066  |   |   |   | 108,730 |   |   |   | 9,336 |   |   |   | 20,332 |   |   |   | 193,464 |   |
| Revisions      of previous estimates                 |   |                                        | 4,192   |   |   |   | (120 | ) |   |   | 278 |   |   |   | 168 |   |   |   | 4,518 |   |
| Extensions,      discoveries and other additions (2) |   |                                        | 11,272  |   |   |   | - |   |   |   | 12,955 |   |   |   | - |   |   |   | 24,227 |   |
| Purchase      of minerals in place (3)               |   |                                        | 90,594  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 90,594 |   |
| Sale      of minerals in place                       |   |                                        | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Production      (9)                                  |   |                                        | (9,468  | ) |   |   | (7,675 | ) |   |   | (1,964 | ) |   |   | (2,866 | ) |   |   | (21,973 | ) |
| December      31, 2005                               |   |                                        | 151,656 |   |   |   | 100,935 |   |   |   | 20,605 |   |   |   | 17,634 |   |   |   | 290,830 |   |
| Revisions      of previous estimates                 |   |                                        | (193    | ) |   |   | (1,327 | ) |   |   | (396 | ) |   |   | 124 |   |   |   | (1,792 | ) |
| Extensions,      discoveries and other additions (4) |   |                                        | 23,037  |   |   |   | - |   |   |   | - |   |   |   | 1,794 |   |   |   | 24,831 |   |
| Purchase      of minerals in place (5)               |   |                                        | 19,328  |   |   |   | 138 |   |   |   | - |   |   |   | - |   |   |   | 19,466 |   |
| Sale      of minerals in place (6)                   |   |                                        | (6,971  | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (6,971 | ) |
| Production      (9)                                  |   |                                        | (16,715 | ) |   |   | (9,450 | ) |   |   | (1,357 | ) |   |   | (2,752 | ) |   |   | (30,274 | ) |
| December      31, 2006                               |   |                                        | 170,142 |   |   |   | 90,296 |   |   |   | 18,852 |   |   |   | 16,800 |   |   |   | 296,090 |   |
| Revisions      of previous estimates (7)             |   |                                        | 27,998  |   |   |   | 229 |   |   |   | 776 |   |   |   | (132 | ) |   |   | 28,871 |   |
| Extensions,      discoveries and other additions (8) |   |                                        | 26,634  |   |   |   | - |   |   |   | 10,094 |   |   |   | - |   |   |   | 36,728 |   |
| Purchase      of minerals in place                   |   |                                        | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Sale      of minerals in place                       |   |                                        | (1,903  | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,903 | ) |
| Production      (9)                                  |   |                                        | (15,451 | ) |   |   | (8,305 | ) |   |   | (4,564 | ) |   |   | (2,436 | ) |   |   | (30,756 | ) |
| December      31, 2007                               |   |                                        | 207,420 |   |   |   | 82,220 |   |   |   | 25,158 |   |   |   | 14,232 |   |   |   | 329,030 |   |
|                                                 |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved      developed reserves as of:                |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2004                               |   |                                        | 32,390  |   |   |   | 108,730 |   |   |   | 9,336 |   |   |   | 18,040 |   |   |   | 168,496 |   |
| December      31, 2005                               |   |                                        | 114,223 |   |   |   | 100,935 |   |   |   | 7,650 |   |   |   | 15,623 |   |   |   | 238,431 |   |
| December      31, 2006                               |   |                                        | 114,505 |   |   |   | 90,296 |   |   |   | 18,852 |   |   |   | 15,936 |   |   |   | 239,589 |   |
| December      31, 2007                               |   |                                        | 128,879 |   |   |   | 71,409 |   |   |   | 15,064 |   |   |   | 13,688 |   |   |   | 229,040 |   |

| (1) | Other      International includes China and Argentina. We have entered into an      agreement to sell our interest in Argentina effective July 1, 2007. We      expect the sale, which is subject to regulatory and partner approvals, to      close in 2008. Argentina crude oil reserves totaled 6,759 MBbls at      December 31, 2007. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      increase in total proved reserves includes 6 MMBbl in the US Wattenberg      field, primarily due to infill drilling activities, 3 MMBbl in the      deepwater Gulf of Mexico Lorien field and 13 MMBbl in the North Sea      Dumbarton field. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Purchase      of minerals in place is the result of the Patina Merger. See Note      3—Acquisitions and Divestitures. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (4) | The      increase in US proved reserves includes 14 MMBbl in the Wattenberg field,      primarily due to infill drillingactivities. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Purchase      of minerals in place includes 18 MMBbl acquired in the purchase of U.S.      Exploration. See Note 3—Acquisitions and  Divestitures. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Sale      of minerals in place is primarily due to the sale of Gulf of Mexico shelf      properties. See Note 3—Acquisitions and  Divestitures. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | The      positive revisions within the US are primarily due to 29 MMBls of NGLs,      previously recorded in proved natural gas reserves, being reflected in      proved oil reserves, partially offset by negative revisions within the US      Southern region related to less than expected well      performance. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | The      increase in proved reserves includes 17 MMBbl in the US Wattenberg      field, primarily due to infill drilling activities, 8 MMBbl in the      deepwater Gulf of Mexico and 10 MMBbl in the North Sea Dumbarton field      area. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | West      Africa production includes sales from the Alba field to the Alba LPG plant      of 2,805 MBbls in 2007, 2,931 MBbls in 2006 and 1,183 MBbls in      2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Results      of Operations for Oil and Gas Producing Activities    (Unaudited) |
|--------------------------------------------------------------------------------|

|                                                                                                                         |   | United              |      |   | West   |    |    |   |   |   |    |   |   | North  |   |   | Other     |    |    |   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-----------|--------|--------|---------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|---------|---------|--------|--------|
|                                                                                                                         |   | States              |      |   | Africa |    |    | Israel |   |   | Ecuador |   |   | Sea    |   |   | Int'l (1) |    |    | Total  |   |
|                                                                                                                         |   | (in      thousands) |      |
| Year      Ended December 31, 2007                                                                                            |   |                |      |   |   |    |    |   |   |   |    |   |   |   |   |   |      |    |    |   |   |
| Revenues                                                                                                                     |   | $                   | 1,952,435 |   |   | $       | 405,988 |   |   | $      | 113,001 |   |   | $      | 35,137 |   |      | $       | 363,886 |   |   | $ | 130,789 |   |   | $ | 3,001,236 |   |
| Production costs (2)                                                                                                         |   |                | 317,984   |   |   |    | 39,222  |   |   |   | 7,711   |   |   |   | 3,203  |   |      |    | 37,987  |   |   |   | 44,339 |   |   |   | 450,446 |   |
| Transportation                                                                                                               |   |                | 39,542    |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | 10,523  |   |   |   | 1,634 |   |   |   | 51,699 |   |
| E&P      corporate                                                                                                       |   |                | 31,902    |   |   |    | 3,309   |   |   |   | 1,687   |   |   |   | 3,193  |   |      |    | 3,572   |   |   |   | 2,870 |   |   |   | 46,533 |   |
| Exploration      expense                                                                                                     |   |                | 122,339   |   |   |    | 43,544  |   |   |   | 1,418   |   |   |   | 215    |   |      |    | 16,847  |   |   |   | 2,781 |   |   |   | 187,144 |   |
| DD&A                                                                                                                     |   |                | 589,705   |   |   |    | 24,949  |   |   |   | 17,805  |   |   |   | 10,353 |   |      |    | 79,380  |   |   |   | 20,413 |   |   |   | 742,605 |   |
| Impairment      of operating assets                                                                                          |   |                | 3,661     |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | -       |   |   |   | - |   |   |   | 3,661 |   |
| Accretion      expense                                                                                                       |   |                | 5,969     |   |   |    | 109     |   |   |   | 450     |   |   |   | 167    |   |      |    | 1,346   |   |   |   | 84 |   |   |   | 8,125 |   |
| Income      before income taxes                                                                                              |   |                | 841,333   |   |   |    | 294,855 |   |   |   | 83,930  |   |   |   | 18,006 |   |      |    | 214,231 |   |   |   | 58,668 |   |   |   | 1,511,023 |   |
| Income      tax expense                                                                                                      |   |                | 191,427   |   |   |    | 83,685  |   |   |   | 14,339  |   |   |   | 3,582  |   |      |    | 113,860 |   |   |   | 9,713 |   |   |   | 416,606 |   |
|  Results      of operations from producing activities  (excluding      corporate overhead and interest costs) | $      | 649,906             |      |   | $      | 211,170 |    |   | $      | 69,591 |    |   | $      | 14,424 |   |   | $         | 100,371 |    |   | $      | 48,955 |   |   | $ | 1,094,417 |   |
| Our      share of Alba Plant's results of operations from producing      activities                                     |   | $                   | -         |   |   | $       | 128,051 |   |   | $      | -       |   |   | $      | -      |   |      | $       | -       |   |   | $ | - |   |   | $ | 128,051 |   |
| Year      Ended December 31, 2006                                                                                            |   |                |      |   |   |    |    |   |   |   |    |   |   |   |   |   |      |    |    |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                                                     |   | $                   | 1,936,590 |   |   | $       | 413,682 |   |   | $      | 92,373  |   |   | $      | 33,575 |   |      | $       | 115,232 |   |   | $ | 143,364 |   |   | $ | 2,734,816 |   |
| Production costs (2)                                                                                                         |   |                | 338,655   |   |   |    | 26,556  |   |   |   | 9,066   |   |   |   | 3,021  |   |      |    | 11,655  |   |   |   | 39,596 |   |   |   | 428,549 |   |
| Transportation                                                                                                               |   |                | 20,729    |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | 7,010   |   |   |   | 803 |   |   |   | 28,542 |   |
| E&P      corporate                                                                                                       |   |                | 60,710    |   |   |    | 4,656   |   |   |   | 111     |   |   |   | 3,102  |   |      |    | 3,346   |   |   |   | 2,118 |   |   |   | 74,043 |   |
| Exploration      expense                                                                                                     |   |                | 113,015   |   |   |    | 7,329   |   |   |   | 286     |   |   |   | 228    |   |      |    | 10,499  |   |   |   | 11,311 |   |   |   | 142,668 |   |
| DD&A                                                                                                                     |   |                | 561,948   |   |   |    | 23,402  |   |   |   | 13,911  |   |   |   | 11,611 |   |      |    | 8,045   |   |   |   | 25,685 |   |   |   | 644,602 |   |
| Impairment      of operating assets                                                                                          |   |                | 8,525     |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | -       |   |   |   | - |   |   |   | 8,525 |   |
| Accretion      expense                                                                                                       |   |                | 8,861     |   |   |    | 104     |   |   |   | 452     |   |   |   | 221    |   |      |    | 1,159   |   |   |   | - |   |   |   | 10,797 |   |
| Income      before income taxes                                                                                              |   |                | 824,147   |   |   |    | 351,635 |   |   |   | 68,547  |   |   |   | 15,392 |   |      |    | 73,518  |   |   |   | 63,851 |   |   |   | 1,397,090 |   |
| Income      tax expense                                                                                                      |   |                | 313,011   |   |   |    | 125,493 |   |   |   | 19,810  |   |   |   | 3,848  |   |      |    | 42,111  |   |   |   | 23,368 |   |   |   | 527,641 |   |
| Results      of operations from producting activities (exluding corporate overhead      and interest costs)             |   | $                   | 511,136   |   |   | $       | 226,142 |   |   | $      | 48,737  |   |   | $      | 11,544 |   |      | $       | 31,407  |   |   | $ | 40,483 |   |   | $ | 869,449 |   |
| Our      share of Alba Plant's results of operations from producing      activities                                |   | $                   | -         |   |   | $       | 101,338 |   |   | $      | -       |   |   | $      | -      |   |      | $       | -       |   |   | $ | - |   |   | $ | 101,338 |   |
| Year      Ended December 31, 2005                                                                                            |   |                |      |   |   |    |    |   |   |   |    |   |   |   |   |   |      |    |    |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                                                     |   | $                   | 1,374,374 |   |   | $       | 281,901 |   |   | $      | 65,050  |   |   | $      | 31,868 |   |      | $       | 123,583 |   |   | $ | 121,514 |   |   | $ | 1,998,290 |   |
| Production costs (2)                                                                                                         |   |                | 216,478   |   |   |    | 30,659  |   |   |   | 8,504   |   |   |   | 3,000  |   |      |    | 12,503  |   |   |   | 28,796 |   |   |   | 299,940 |   |
| Transportation                                                                                                               |   |                | 9,350     |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | 6,562   |   |   |   | 852 |   |   |   | 16,764 |   |
| E&P      corporate                                                                                                       |   |                | 34,162    |   |   |    | 435     |   |   |   | 188     |   |   |   | 2,611  |   |      |    | 2,591   |   |   |   | 947 |   |   |   | 40,934 |   |
| Exploration      expense                                                                                                     |   |                | 130,018   |   |   |    | 5,463   |   |   |   | 223     |   |   |   | 341    |   |      |    | 5,985   |   |   |   | 12,680 |   |   |   | 154,710 |   |
| DD&A                                                                                                                     |   |                | 328,645   |   |   |    | 26,978  |   |   |   | 11,120  |   |   |   | 12,246 |   |      |    | 9,866   |   |   |   | 24,237 |   |   |   | 413,092 |   |
| Impairment      of operating assets                                                                                          |   |                | 5,368     |   |   |    | -       |   |   |   | -       |   |   |   | -      |   |      |    | -       |   |   |   | - |   |   |   | 5,368 |   |
| Accretion      expense                                                                                                       |   |                | 9,590     |   |   |    | 51      |   |   |   | 281     |   |   |   | 158    |   |      |    | 1,134   |   |   |   | - |   |   |   | 11,214 |   |
| Income      (loss) before income taxes                                                                                       |   |                | 640,763   |   |   |    | 218,315 |   |   |   | 44,734  |   |   |   | 13,512 |   |      |    | 84,942  |   |   |   | 54,002 |   |   |   | 1,056,268 |   |
| Income      tax expense                                                                                                      |   |                | 140,916   |   |   |    | 76,518  |   |   |   | 7,752   |   |   |   | 3,378  |   |      |    | 36,834  |   |   |   | 21,033 |   |   |   | 286,431 |   |
| Results      of operations from producing results of operations from producing      activities                          |   | $                   | 499,847   |   |   | $       | 141,797 |   |   | $      | 36,982  |   |   | $      | 10,134 |   |      | $       | 48,108  |   |   | $ | 32,969 |   |   | $ | 769,837 |   |
| Our      share of Alba Plant's results of operations from      producing activities                                     |   | $                   | -         |   |   | $       | 33,916  |   |   | $      | -       |   |   | $      | -      |   |      | $       | -       |   |   | $ | - |   |   | $ | 33,916 |   |

| (1) | Other      International includes China, Argentina and  Suriname. |
|-----|-------------------------------------------------------------------|

| (2) | Production      costs consist of oil and gas operations expense, production and ad valorem      taxes, plus general and administrative expense supporting oil and gas      operations. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                       |   | United              |      |   | West   |   |    |   |   |   |    |   |   | North  |   |   | Other     |   |    |   |   |
|------------------------------------------------------------|--------|---------------------|-----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|---------|--------|--------|
|                                                       |   | States              |      |   | Africa |   |    | Israel |   |   | Ecuador |   |   | Sea    |   |   | Int'l (2) |   |    | Total  |   |
|                                                       |   | (in      thousands) |      |
| Year      Ended December 31, 2007                          |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |
| Property      acquisition costs                            |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |
| Proved                                                     |   | $                   | 11,239    |   |   | $      | -       |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 11,239 |   |
| Unproved                                                   |   |                | 144,422   |   |   |   | -       |   |   |   | -       |   |   |   | -      |   |      |   | -       |   |   |   | 900 |   |   |   | 145,322 |   |
| Total      acquisition costs                               |   |                | 155,661   |   |   |   | -       |   |   |   | -       |   |   |   | -      |   |      |   | -       |   |   |   | 900 |   |   |   | 156,561 |   |
| Exploration      costs                                     |   |                | 184,412   |   |   |   | 179,043 |   |   |   | 2,515   |   |   |   | 215    |   |      |   | 51,564  |   |   |   | 2,770 |   |   |   | 420,519 |   |
| Development costs (4) (5)      (6)                         |   |                | 1,081,221 |   |   |   | 15,185  |   |   |   | 24,523  |   |   |   | 29     |   |      |   | 46,926  |   |   |   | 22,966 |   |   |   | 1,190,850 |   |
| Total      consolidated operations                         |   | $                   | 1,421,294 |   |   | $      | 194,228 |   |   | $      | 27,038  |   |   | $      | 244    |   |      | $      | 98,490  |   |   | $ | 26,636 |   |   | $ | 1,767,930 |   |
| Our      share of Alba Plant's development costs           |   | $                   | -         |   |   | $      | 516     |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 516 |   |
| Year      Ended December 31, 2006                          |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |   |   |   |   |   |   |   |
| Property      acquisition costs                            |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |   |   |   |   |   |   |   |
| Proved (3)                                                 |   | $                   | 514,294   |   |   | $      | 7,971   |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 522,265 |   |
| Unproved (3)                                               |   |                | 157,141   |   |   |   | 25,500  |   |   |   | 1,000   |   |   |   | -      |   |      |   | 831     |   |   |   | - |   |   |   | 184,472 |   |
| Total      acquisition costs                               |   |                | 671,435   |   |   |   | 33,471  |   |   |   | 1,000   |   |   |   | -      |   |      |   | 831     |   |   |   | - |   |   |   | 706,737 |   |
| Exploration      costs                                     |   |                | 204,787   |   |   |   | 13,076  |   |   |   | 286     |   |   |   | 228    |   |      |   | 18,185  |   |   |   | 11,311 |   |   |   | 247,873 |   |
| Development costs (4)      (5)                             |   |                | 784,877   |   |   |   | 6,933   |   |   |   | 13,869  |   |   |   | 48     |   |      |   | 231,484 |   |   |   | 21,649 |   |   |   | 1,058,860 |   |
| Total      consolidated operations                         |   | $                   | 1,661,099 |   |   | $      | 53,480  |   |   | $      | 15,155  |   |   | $      | 276    |   |      | $      | 250,500 |   |   | $ | 32,960 |   |   | $ | 2,013,470 |   |
| Our      share of Alba Plant's development costs      |   | $                   | -         |   |   | $      | 580     |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 580 |   |
| Year      Ended December 31, 2005                          |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |   |   |   |   |   |   |   |
| Property      acquisition costs                            |   |                |      |   |   |   |    |   |   |   |    |   |   |   |   |   |      |   |    |   |   |   |   |   |   |   |   |   |
| Proved (3)                                                 |   | $                   | 2,642,572 |   |   | $      | -       |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 2,642,572 |   |
| Unproved (3)                                               |   |                | 1,084,545 |   |   |   | -       |   |   |   | -       |   |   |   | -      |   |      |   | 140     |   |   |   | 250 |   |   |   | 1,084,935 |   |
| Total      acquisition costs                               |   |                | 3,727,117 |   |   |   | -       |   |   |   | -       |   |   |   | -      |   |      |   | 140     |   |   |   | 250 |   |   |   | 3,727,507 |   |
| Exploration      costs                                     |   |                | 164,820   |   |   |   | 18,126  |   |   |   | 223     |   |   |   | 341    |   |      |   | 6,308   |   |   |   | 12,680 |   |   |   | 202,498 |   |
| Development costs (4) (5)      (6)                         |   |                | 657,858   |   |   |   | 2,738   |   |   |   | 5,928   |   |   |   | (1,660 | )      |      |   | 19,729  |   |   |   | 13,858 |   |   |   | 698,451 |   |
| Total      consolidated operations                         |   | $                   | 4,549,795 |   |   | $      | 20,864  |   |   | $      | 6,151   |   |   | $      | (1,319 | )      |      | $      | 26,177  |   |   | $ | 26,788 |   |   | $ | 4,628,456 |   |
| Our      share of Alba Plant's development      costs |   | $                   | -         |   |   | $      | 27,639  |   |   | $      | -       |   |   | $      | -      |   |      | $      | -       |   |   | $ | - |   |   | $ | 27,639 |   |

| (1) | Costs      incurred include capitalized and expenseditems. |
|-----|------------------------------------------------------------|

| (2) | Other      International includes China, Argentina and  Suriname. |
|-----|-------------------------------------------------------------------|

| (3) | Includes      amounts allocated from the U.S. Exploration acquisition (2006) and the      Patina Merger (2005). See Note 3—Acquisitions and      Divestitures. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | US      development costs include increases in asset retirement obligations of      $24 million in 2007, $4 million in 2006 and $39 million in      2005. US asset retirement costs of $33 million in 2006 and      $66 million in 2005 were incurred as a result of hurricane damage and      are excluded from the costs incurred schedule above as we expected to      recover the costs from insurance proceeds. See Note 4—Effect of Gulf Coast      Hurricanes. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Worldwide      development costs include amounts spent to develop proved undeveloped      reserves of $1.0 billion in 2007, $768 million in 2006 and      $471 million in 2005. Worldwide development costs also include      $191 million spent on a floating production, storage and offloading      vessel in the North Sea Dumbarton field in2006. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | North Sea development costs      include increases in asset retirement obligations of $4 million in 2007      and $5 million in 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Capitalized      Costs Relating to Oil and Gas Producing Activities    (Unaudited) |
|------------------------------------------------------------------------------------|

|                                               |   | December      31,   |       |
|----------------------------------------------------|--------|---------------------|------------|
|                                               |   | 2007                |       |   | 2006 |   |
|                                               |   | (in      thousands) |       |
| Unproved      oil and gas properties (1)           |   | $                   | 1,164,707  |   |   | $ | 1,053,254 |   |
| Proved      oil and gas properties      (2)        |   |                | 8,903,163  |   |   |   | 7,671,806 |   |
| Total      oil and gas properties                  |   |                | 10,067,870 |   |   |   | 8,725,060 |   |
|                                               |   |                |       |   |   |   |   |   |
| Accumulated      DD&A                          |   |                | (2,280,789 | ) |   |   | (1,707,895 | ) |
| Net      capitalized costs                         |   | $                   | 7,787,081  |   |   | $ | 7,017,165 |   |
| Our      share of Alba Plant net capitalized costs |   | $                   | 117,212    |   |   | $ | 124,454 |   |

|  (1) | Unproved      oil and gas properties includes $628 million and $823 million at December      31, 2007 and 2006, respectively, remaining from the allocation of costs to      unproved properties acquired in the Patina Merger and the acquisition of      U.S. Exploration. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Proved      oil and gas properties include asset retirement costs of $91 million      and $49 million at December 31, 2007 and 2006,      respectively. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                                    |   | United             |   |   | West   |   |   |   |   |   |    |   |   | North  |   |   | Other     |   |   |   |   |
|-------------------------------------------------------------------------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                                                                    |   | States             |   |   | Africa |   |   | Israel |   |   | Ecuador |   |   | Sea    |   |   | Int'l (1) |   |   | Total  |   |
|                                                                    |   | (in      millions) |   |
| December      31, 2007                                                  |   |               |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |
| Future cash      inflows(2)                                             |   | $                  | 30,733 |   |   | $      | 6,935  |   |   | $      | 858     |   |   | $      | 704    |   |      | $      | 2,492  |   |   | $ | 879 |   |   | $ | 42,601 |   |
| Future production      costs(3)                                         |   |               | 5,936  |   |   |   | 1,112  |   |   |   | 180     |   |   |   | 174    |   |      |   | 516    |   |   |   | 335 |   |   |   | 8,253 |   |
| Future      development costs                                           |   |               | 3,136  |   |   |   | 202    |   |   |   | 88      |   |   |   | 12     |   |      |   | 200    |   |   |   | 15 |   |   |   | 3,653 |   |
| Future      income tax expense                                          |   |               | 6,622  |   |   |   | 1,348  |   |   |   | 146     |   |   |   | 115    |   |      |   | 881    |   |   |   | 125 |   |   |   | 9,237 |   |
| Future      net cash flows                                              |   |               | 15,039 |   |   |   | 4,273  |   |   |   | 444     |   |   |   | 403    |   |      |   | 895    |   |   |   | 404 |   |   |   | 21,458 |   |
| 10%      annual discount for estimated timing of      cash flows   |   |               | 7,398  |   |   |   | 1,705  |   |   |   | 163     |   |   |   | 227    |   |      |   | 221    |   |   |   | 93 |   |   |   | 9,807 |   |
| Standardized      measure of discounted future net cash      flows |   | $                  | 7,641  |   |   | $      | 2,568  |   |   | $      | 281     |   |   | $      | 176    |   |      | $      | 674    |   |   | $ | 311 |   |   | $ | 11,651 |   |
| December      31, 2006                                                  |   |               |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Future cash      inflows(2)                                             |   | $                  | 18,948 |   |   | $      | 4,904  |   |   | $      | 972     |   |   | $      | 629    |   |      | $      | 1,225  |   |   | $ | 808 |   |   | $ | 27,486 |   |
| Future production      costs(3)                                         |   |               | 4,551  |   |   |   | 738    |   |   |   | 146     |   |   |   | 162    |   |      |   | 327    |   |   |   | 187 |   |   |   | 6,111 |   |
| Future      development costs                                           |   |               | 2,846  |   |   |   | 80     |   |   |   | 90      |   |   |   | 12     |   |      |   | 35     |   |   |   | 28 |   |   |   | 3,091 |   |
| Future      income tax expense                                          |   |               | 3,422  |   |   |   | 1,348  |   |   |   | 187     |   |   |   | 130    |   |      |   | 435    |   |   |   | 177 |   |   |   | 5,699 |   |
| Future      net cash flows                                              |   |               | 8,129  |   |   |   | 2,738  |   |   |   | 549     |   |   |   | 325    |   |      |   | 428    |   |   |   | 416 |   |   |   | 12,585 |   |
| 10%      annual discount for estimated timing of cash      flows   |   |               | 3,966  |   |   |   | 1,132  |   |   |   | 215     |   |   |   | 170    |   |      |   | 95     |   |   |   | 120 |   |   |   | 5,698 |   |
| Standardized      measure of discounted future net cash      flows |   | $                  | 4,163  |   |   | $      | 1,606  |   |   | $      | 334     |   |   | $      | 155    |   |      | $      | 333    |   |   | $ | 296 |   |   | $ | 6,887 |   |
| December      31, 2005                                                  |   |               |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Future cash      inflows(2)                                             |   | $                  | 22,931 |   |   | $      | 5,436  |   |   | $      | 1,031   |   |   | $      | 539    |   |      | $      | 1,267  |   |   | $ | 868 |   |   | $ | 32,072 |   |
| Future production      costs(3)                                         |   |               | 5,099  |   |   |   | 556    |   |   |   | 154     |   |   |   | 47     |   |      |   | 352    |   |   |   | 290 |   |   |   | 6,498 |   |
| Future      development costs                                           |   |               | 1,887  |   |   |   | 92     |   |   |   | 88      |   |   |   | 12     |   |      |   | 184    |   |   |   | 37 |   |   |   | 2,300 |   |
| Future      income tax expense                                          |   |               | 4,645  |   |   |   | 1,589  |   |   |   | 182     |   |   |   | 142    |   |      |   | 381    |   |   |   | 159 |   |   |   | 7,098 |   |
| Future      net cash flows                                              |   |               | 11,300 |   |   |   | 3,199  |   |   |   | 607     |   |   |   | 338    |   |      |   | 350    |   |   |   | 382 |   |   |   | 16,176 |   |
| 10%      annual discount for estimated timing of cash      flows   |   |               | 5,201  |   |   |   | 1,554  |   |   |   | 236     |   |   |   | 162    |   |      |   | 138    |   |   |   | 114 |   |   |   | 7,405 |   |
| Standardized      measure of discounted future net cash flows      |   | $                  | 6,099  |   |   | $      | 1,645  |   |   | $      | 371     |   |   | $      | 176    |   |      | $      | 212    |   |   | $ | 268 |   |   | $ | 8,771 |   |

| (1) | Other      International includes China and Argentina. We have entered into an      agreement to sell our interest in Argentina effective July 1, 2007. We      expect the sale, which is subject to regulatory and partner approvals, to      close in 2008. Argentina’s standardized measure of discounted future net      cash flows totaled $66 million at December 31,  2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      standardized measure of discounted future net cash flows for 2007, 2006      and 2005 does not include cash flows relating to anticipated future      methanol or power sales. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Production      costs include oil and gas operations expense, production and ad valorem      taxes, transportation costs and general and administrative expense      supporting oil and gasoperations. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                   |   | United |   |   | West   |   |   |   |   |   |    |   |   | North  |   |   | Other     |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                                   |   | States |   |   | Africa |   |   | Israel |   |   | Ecuador |   |   | Sea    |   |   | Int'l (1) |   |   | Total  |   |
| December      31, 2007                 |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |
| Average      crude oil price per Bbl   |   | $      | 88.00  |   |   | $      | 81.26  |   |   | $      | -       |   |   | $      | -      |   |      | $      | 93.79  |   |   | $ | 61.72 |   |   | $ | 85.62 |   |
| Average      natural gas price per Mcf |   |   | 6.78   |   |   |   | 0.27   |   |   |   | 2.69    |   |   |   | 3.74   |   |      |   | 7.07   |   |   |   | - |   |   |   | 4.36 |   |
| December      31, 2006                 |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Average      crude oil price per Bbl   |   | $      | 57.02  |   |   | $      | 51.49  |   |   | $      | -       |   |   | $      | -      |   |      | $      | 57.81  |   |   | $ | 48.04 |   |   | $ | 54.87 |   |
| Average      natural gas price per Mcf |   |   | 5.32   |   |   |   | 0.27   |   |   |   | 2.70    |   |   |   | 3.75   |   |      |   | 7.11   |   |   |   | 0.85 |   |   |   | 3.48 |   |
| December      31, 2005                 |   |   |   |   |   |   |   |   |   |   |    |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Average      crude oil price per Bbl   |   | $      | 58.20  |   |   | $      | 51.62  |   |   | $      | -       |   |   | $      | -      |   |      | $      | 58.47  |   |   | $ | 49.23 |   |   | $ | 55.39 |   |
| Average      natural gas price per Mcf |   |   | 8.59   |   |   |   | 0.25   |   |   |   | 2.62    |   |   |   | 3.75   |   |      |   | 5.39   |   |   |   | - |   |   |   | 5.16 |   |

| (1) | Other      International includes China andArgentina. |
|-----|-------------------------------------------------------|

|                       |   | Year      Ended December 31, |   |
|----------------------------|--------|------------------------------|--------|
|                       |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                       |   | (in      thousands)          |   |
| Imbalance      receivables |   | $                            | 12,640 |   |   | $ | 18,389 |   |   | $ | 18,100 |   |
| Imbalance      liabilities |   |                         | 10,288 |   |   |   | 16,750 |   |   |   | 34,600 |   |

----

Table of Contents

| Sources      of Changes in Discounted Future Net Cash Flows  (Unaudited) |
|--------------------------------------------------------------------------|

|                                                                                                 |   | Year      Ended December 31, |   |
|------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                 |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
|                                                                                                 |   |  (in      millions)     |   |
| Standardized      measure of discounted future net cash flows at      the beginning of the year |   | $                            | 6,887  |   |   | $ | 8,771 |   |   | $ | 3,342 |   |
| Changes      in standardized measure of dicounted future net cashflows:                              |   |                         |   |   |   |   |   |   |   |   |   |   |
| Sales      of oil and gas produced, net of production costs                                          |   |                         | (2,427 | ) |   |   | (2,177 | ) |   |   | (1,563 | ) |
| Net      changes in prices and production costs                                                      |   |                         | 5,266  |   |   |   | (2,788 | ) |   |   | 2,160 |   |
| Extensions,      discoveries and improved recovery, less related costs                               |   |                         | 1,635  |   |   |   | 769 |   |   |   | 1,173 |   |
| Changes      in estimated future development costs                                                   |   |                         | (775   | ) |   |   | (558 | ) |   |   | (912 | ) |
| Development      costs incurred during the period                                                    |   |                         | 1,189  |   |   |   | 1,076 |   |   |   | 751 |   |
| Revisions      of previous quantity estimates                                                        |   |                         | 1,276  |   |   |   | (92 | ) |   |   | 273 |   |
| Purchases      of minerals in place                                                                  |   |                         | 6      |   |   |   | 573 |   |   |   | 4,720 |   |
| Sales      of minerals in place                                                                      |   |                         | (95    | ) |   |   | (579 | ) |   |   | - |   |
| Accretion      of discount                                                                           |   |                         | 1,006  |   |   |   | 1,274 |   |   |   | 519 |   |
| Net      change in income taxes                                                                      |   |                         | (1,900 | ) |   |   | 777 |   |   |   | (2,099 | ) |
| Change      in timing of estimated future production and other                                       |   |                         | (417   | ) |   |   | (159 | ) |   |   | 407 |   |
| Aggregate      change in standardized measure of discounted future net cash      flows          |   |                         | 4,764  |   |   |   | (1,884 | ) |   |   | 5,429 |   |
| Standardized      measure of discounted future net cash flows at the end of the      year       |   | $                            | 11,651 |   |   | $ | 6,887 |   |   | $ | 8,771 |   |

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Table of Contents

Supplemental Quarterly Financial Information(Unaudited)

|                     |   | Quarter      Ended                           |    |   |          |   |
|--------------------------|--------|----------------------------------------------|---------|--------|---------------|--------|
|                     |   | March      31,                               |    |   | June      30, |   |   | September      30, |   |   | December      31, |   |   | Total |   |
|                     |   | (in      thousands except per share amounts) |    |   |          |   |
| 2007      (1)            |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |
| Revenues                 |   | $                                            | 742,545 |   |          | $      | 794,213 |   |   | $ | 813,811 |   |   | $ | 921,461 |   |   | $ | 3,272,030 |   |
| Income      before taxes |   |                                         | 303,852 |   |          |   | 293,101 |   |   |   | 343,277 |   |   |   | 427,337 |   |   |   | 1,367,567 |   |
| Net      income          |   |                                         | 211,812 |   |          |   | 209,105 |   |   |   | 222,675 |   |   |   | 300,278 |   |   |   | 943,870 |   |
|                     |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      per share: |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    |   |                                         | 1.24    |   |          |   | 1.22 |   |   |   | 1.30 |   |   |   | 1.75 |   |   |   | 5.52 |   |
| Diluted                  |   |                                         | 1.22    |   |          |   | 1.21 |   |   |   | 1.28 |   |   |   | 1.73 |   |   |   | 5.45 |   |
| 2006      (2)            |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                 |   | $                                            | 711,997 |   |          | $      | 772,580 |   |   | $ | 741,319 |   |   | $ | 714,186 |   |   | $ | 2,940,082 |   |
| Income      before taxes |   |                                         | 349,353 |   |          |   | (44,865 | ) |   |   | 544,966 |   |   |   | 246,763 |   |   |   | 1,096,217 |   |
| Net      income          |   |                                         | 226,087 |   |          |   | (30,705 | ) |   |   | 318,064 |   |   |   | 164,982 |   |   |   | 678,428 |   |
|                     |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      per share: |   |                                         |    |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    |   |                                         | 1.28    |   |          |   | (0.17 | ) |   |   | 1.80 |   |   |   | 0.95 |   |   |   | 3.86 |   |
| Diluted                  |   |                                         | 1.26    |   |          |   | (0.17 | ) |   |   | 1.75 |   |   |   | 0.94 |   |   |   | 3.79 |   |

| (1) | First      quarter 2007 includes a loss on involuntary conversion of $13 million and      second quarter 2007 includes a loss on involuntary conversion of $38      million. See Note 3—Effect of Gulf Coast  Hurricanes. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | First      quarter 2006 includes a mark-to-market gain of $39 million due to a      loss of cash flow hedge accounting treatment for certain derivative      instruments, and a loss of $25 million related to amounts previously      recorded in AOCL due to a delay in the timing of production. Second      quarter 2006 includes a loss of $399 million related to amounts      previously recorded in AOCL due to the sale of Gulf of Mexico shelf      properties. Third quarter 2006 includes a gain of $204 million from      the sale of Gulf of Mexico shelf properties. Fourth quarter 2006 includes      an additional gain of $7 million from the sale of Gulf of Mexico      Shelf properties. See Note 3—Acquisitions and Divestitures and Note      12—Derivative Instruments and Hedging  Activities. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item      9. | Changes in and Disagreements with      Accountants on Accounting and Financial  Disclosure. |
|--------------|---------------------------------------------------------------------------------------------|

| Item      9A. | Controls and  Procedures. |
|---------------|---------------------------|

| Evaluation      of Disclosure Controls andProcedures |
|------------------------------------------------------|

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Table of Contents

| Management’s      Annual Report on Internal Control over Financial  Reporting |
|-------------------------------------------------------------------------------------|

| Changes      in Internal Control over FinancialReporting |
|----------------------------------------------------------|

| Item      9B. | OtherInformation. |
|---------------|-------------------|

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Table of Contents

PART III

| Item      10. | Directors, Executive Officers and Corporate      Governance. |
|---------------|--------------------------------------------------------------|

| Item      11. | Executive  Compensation. |
|---------------|--------------------------|

| Item      12. | Security Ownership of Certain Beneficial Owners      and Management and Related Stockholder  Matters. |
|---------------|-------------------------------------------------------------------------------------------------------|

| Item      13. | Certain Relationships and Related Transactions,      and Director Independence. |
|---------------|---------------------------------------------------------------------------------|

| Item      14. | Principal Accounting Fees and      Services. |
|---------------|----------------------------------------------|

PART IV

| Item      15. | Exhibits, Financial Statements      Schedules. |
|---------------|------------------------------------------------|

|   | (3) | Exhibits:      The exhibits required to be filed by this Item 15 are set forth in      the Index to Exhibits accompanying thisreport. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                              | NOBLE      ENERGY, INC.                             |
|-----------------------------------|-----------------------------------------------------|
|                              | (Registrant)                                        |
|                              |                                                |
| Date:      February 27, 2008 | By:      /s/ Charles D. Davidson                    |
|                              | Charles      D. Davidson,                           |
|                              | Chairman      of the Board, President,              |
|                              | Chief      Executive Officer and Director           |
|                              |                                                |
| Date:      February 27, 2008 | By:      /s/ Chris Tong                             |
|                              | Chris      Tong,                                    |
|                              | Senior      Vice President, Chief Financial Officer |
|                              |                                                |
| Date:      February 27, 2008 | By:      /s/ Frederick B. Bruning                   |
|                              | Frederick      B. Bruning,                          |
|                              | Vice      President, Chief Accounting Officer       |

| Signature                     |   |                                          |   | Capacity      in which signed |   |   |   | Date |   |   |
|-------------------------------|--------|-----------------------------------------------|--------|-------------------------------|--------|--------|--------|------|--------|--------|
|                          |   |                                          |   |                          |
| /s/      Charles D. Davidson  |   | Chairman      of the Board, President,        |   | February 27,      2008   |
| Charles      D. Davidson      |   | Chief      Executive Officer and Director     |   |                          |
|                          |   | (Principal      Executive Officer)            |   |                          |
|                          |   |                                          |   |                          |
| /s/      Chris Tong           |   | Senior      Vice President,                   |   | February 27,      2008   |
| Chris      Tong               |   | Chief      Financial Officer                  |   |                          |
|                          |   | (Principal      Financial Officer)            |   |                          |
|                          |   |                                          |   |                          |
| /s/      Frederick B. Bruning |   | Vice      President, Chief Accounting Officer |   | February 27,      2008   |
| Frederick      B. Bruning     |   | (Principal      Accounting Officer)           |   |                          |
|                          |   |                                          |   |                          |
| /s/      Jeffrey L. Berenson  |   | Director                                      |   | February 27,      2008   |
| Jeffrey      L. Berenson      |   |                                          |   |                          |
|                          |   |                                          |   |                          |
| /s/      Michael A. Cawley    |   | Director                                      |   | February 27,      2008   |
| Michael      A. Cawley        |   |                                          |   |                          |
|                          |   |                                          |   |                          |
| /s/      Edward F. Cox        |   | Director                                      |   | February 27,      2008   |
| Edward      F. Cox            |   |                                          |   |                          |
|                          |   |                                          |   |                          |
| /s/      Thomas J. Edelman    |   | Director                                      |   | February 27,      2008   |
| Thomas      J. Edelman        |   |                                          |   |                          |

|                          |   |           |   |                        |
|-------------------------------|--------|----------------|--------|-----------------------------|
| /s/      Kirby L. Hedrick     |   |  Director |   | February 27,      2008 |
| Kirby      L. Hedrick         |   |           |   |                        |
|                          |   |           |   |                        |
| /s/      Scott D. Urban       |   |  Director |   | February 27,      2008 |
| Scott      D. Urban           |   |           |   |                        |
|                          |   |           |   |                        |
| /s/      William T. Van Kleef |   |  Director |   | February 27,      2008 |
| William      T. Van Kleef     |   |           |   |                        |

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| ExhibitNumber |   |    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        Exhibit ** |
|---------------|--------|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|
| 3.1           |   | — |   | Certificate      of Incorporation, as amended, of the Registrant as currently in effect      (filed as Exhibit 3.2 to the Registrant’s Annual Report on      Form 10-K for the year ended December 31, 1987 and      incorporated herein by reference).                                                                                                                                                                                     |
| 3.2           |   | — |   | Composite      copy of Bylaws of the Registrant as currently in effect (filed as      Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (Date      of Event: January 29, 2002) dated February 8, 2002 and      incorporated herein by reference).                                                                                                                                                                        |
| 4.1           |   | — |   | Certificate      of Designations of Series A Junior Participating Preferred Stock of      the Registrant dated August 27, 1997 (filed as Exhibit A of      Exhibit 4.1 to the Registrant’s Registration Statement on      Form 8-A filed on August 28, 1997 and incorporated herein      by reference).                                                                                                                 |
| 4.2           |   | — |   | Certificate      of Designations of Series B Mandatorily Convertible Preferred Stock      of the Registrant dated November 9, 1999 (filed as      Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K for      the year ended December 31, 1999 and incorporated herein by      reference).                                                                                                                           |
| 4.3           |   | — |   | Indenture      dated as of October 14, 1993 between the Registrant and U.S.      Trust Company of Texas, N.A., as Trustee, relating to the Registrant’s 7      1/4% Notes Due 2023, including form of the Registrant’s 7 1/4% Notes Due      2023 (filed as Exhibit 4.1 to the Registrant’s Quarterly Report on      Form 10-Q for the quarter ended September 30, 1993 and      incorporated herein by reference).   |
| 4.4           |   | — |   | Indenture      relating to Senior Debt Securities dated as of April 1, 1997      between the Registrant and U.S. Trust Company of Texas, N.A., as Trustee      (filed as Exhibit 4.1 to the Registrant’s Quarterly Report on      Form 10-Q for the quarter ended March 31, 1997 and      incorporated herein by reference).                                                                                                      |
| 4.5           |   | — |   | First      Indenture Supplement relating to $250 million of the Registrant’s 8%      Senior Notes Due 2027 dated as of April 1, 1997 between the      Registrant and U.S. Trust Company of Texas, N.A., as Trustee (filed as      Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q      for the quarter ended March 31, 1997 and incorporated herein by      reference).                                  |
| 4.6           |   | — |   | Second      Indenture Supplement, between the Company and U.S. Trust Company of Texas,      N.A. as trustee, relating to $100 million of the Registrant’s 7 1/4%      Senior Debentures Due 2097 dated as of August 1, 1997 (filed as      Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q      for the quarter ended June 30, 1997 and incorporated herein by      reference).                          |
| 4.7           |   | — |   | Third      Indenture Supplement relating to $200 million of the Registrant’s      5.25% Notes due 2014 dated April 19, 2004 between the Company      and the Bank of New York Trust Company, N.A., as successor trustee to U.S.      Trust Company of Texas, N.A. (filed as Exhibit 4.1 to the Company’s      Registration Statement on Form S-4 (Registration No. 333-116092)      and incorporated herein by reference).  |
| 10.1      *   |   | — |   | Restoration      of Retirement Income Plan for Certain Participants in the Noble      Energy, Inc. Retirement Plan dated September 21, 1994,      effective as of May 19, 1994 (filed as Exhibit 10.5 to the      Registrant’s Annual Report on Form 10-K for the year ended      December 31, 1994 and incorporated herein by      reference).                                                                    |
| 10.2      *   |   | — |   | Amendment      No. 1 to the Restoration of Retirement Income Plan for Certain      Participants in the Noble Affiliates Retirement Plan executed      March 26, 2002 (filed as Exhibit 10.2 to the Registrant’s      Annual Report on Form 10-K for the year ended      December 31, 2002 and incorporated herein by      reference).                                                                                        |
| 10.3      *   |   | — |   | Noble      Energy, Inc. Restoration Trust effective August 1, 2002      (filed as Exhibit 10.3 to the Registrant’s Annual Report on      Form 10-K for the year ended December 31, 2002 and      incorporated herein by reference).                                                                                                                                                                                          |
| 10.4      *   |   | — |   | Noble      Energy, Inc. Deferred Compensation Plan (formerly known as the Noble      Affiliates Thrift Restoration Plan dated May 9, 1994) as      restated effective August 1, 2001 (filed as Exhibit 10.4 to      the Registrant’s Annual Report on Form 10-K for the year ended      December 31, 2002 and incorporated herein by      reference).                                                              |
| 10.5      *   |   | — |   | Noble      Energy, Inc. 1992 Stock Option and Restricted Stock Plan, as amended,      dated April 25, 2005, and approved by the stockholders of the Company      on April 29, 2003 (filed as Exhibit 10.2 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended      March 31, 2005 and incorporated herein by      reference).                                                                  |
| 10.6      *   |   | — |   | Form of      Nonqualified Stock Option Agreement under the Noble Energy, Inc. 1992      Stock Option and Restricted Stock Plan (filed as Exhibit 10.1 to the      Registrant’s Current Report on Form 8-K (Date of Event:      February 1, 2005) filed February 7, 2005 and      incorporated herein by reference).                                                                                                     |
| 10.7      *   |   | — |   | Form of      Restricted Stock Agreement under the Noble Energy, Inc. 1992 Stock      Option and Restricted Stock Plan (filed as Exhibit 10.2 to the      Registrant’s Current Report on Form 8-K (Date of Event:      February 1, 2005) filed February 7, 2005 and      incorporated herein by reference).                                                                                                              |
| 10.8      *   |   | — |   | 1988      Nonqualified Stock Option Plan for Non-Employee Directors of the      Registrant, as amended and restated, effective as of      April 27, 2004 (filed as Exhibit 10.2 to the Registrant’s      Quarterly Report on Form 10-Q for the quarter ended      June 30, 2004 and incorporated herein byreference).                                                                                                             |
| 10.9      *   |   | — |   | Noble      Energy, Inc. Non-Employee Director Fee Deferral Plan dated      April 25, 2002 and effective as of April 23, 2002      (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on      Form 10-Q for the quarter ended March 31, 2002 and      incorporated herein by reference).                                                                                                                   |
| 10.10*        |   | — |   | Form of      Indemnity Agreement entered into between the Registrant and each of the      Registrant’s directors and bylaw officers (filed as Exhibit 10.18 to      the Registrant’s Annual Report of Form 10-K for the year ended      December 31, 1995 and incorporated herein by      reference).                                                                                                                            |
| 10.11         |   | — |   | Guaranty      of the Registrant dated October 28, 1982, guaranteeing certain      obligations of Samedan (filed as Exhibit 10.12 to the Registrant’s      Annual Report on Form 10-K for the year ended      December 31, 1993 and incorporated herein by      reference).                                                                                                                                                        |
| 10.12         |   | — |   | Stock      Purchase Agreement dated as of July 1, 1996, between Samedan Oil      Corporation and Enterprise Diversified Holdings Incorporated (filed as      Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (Date      of Event: July 31, 1996) dated August 13, 1996 and      incorporated herein byreference).                                                                                                 |

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| ExhibitNumber |   |    |   |  Exhibit **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------------|--------|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13         |   | — |   | Noble      Preferred Stock Remarketing and Registration Rights Agreement dated as of      November 10, 1999 by and among the Registrant, Noble Share      Trust, The Chase Manhattan Bank, and Donaldson, Lufkin & Jenrette      Securities Corporation (filed as Exhibit 10.15 to the Registrant’s      Annual Report on Form 10-K for the year ended      December 31, 1999 and incorporated herein by      reference).                                                                                                                                                                                                                                 |
| 10.14*        |   | — |   | Letter      agreement dated February 1, 2002 between the Registrant and      Charles D. Davidson, terminating Mr. Davidson’s employment agreement      and entering into the attached Change of Control Agreement (filed as      Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for      the year ended December 31, 2001 and incorporated herein by      reference).                                                                                                                                                                                                                                                                     |
| 10.15*        |   | — |   | Form of      Change of Control Agreement entered into between the Registrant and each      of the Registrant’s officers, with schedule setting forth differences in      Change of Control Agreements (filed as Exhibit 10.1 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended      September 30, 2004 and incorporated herein by      reference).                                                                                                                                                                                                                                                                                     |
| 10.16         |   | — |   | 364-day      Credit Agreement dated as of November 27, 2002 among the      Registrant, as borrower, JPMorgan Chase Bank, as the administrative agent      for the lenders, Wachovia Bank, National Association, as the syndication      agent for the lenders, Societe Generale, Citibank, N.A., Deutsche Bank Ag      New York Branch, and The Royal Bank of Scotland PLC, as co-documentation      agents, and certain commercial lending institutions, as lenders, (filed as      Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K for      the year ended December 31, 2002 and incorporated herein by      reference).                            |
| 10.17         |   | — |   | 364-day      Credit Agreement dated as of October 30, 2003 among the      Registrant, as borrower, JPMorgan Chase Bank, as the administrative agent      for the lenders, Wachovia Bank, National Association, as the syndication      agent for the lenders, Societe Generale, Deutsche Bank Ag New York Branch,      and The Royal Bank of Scotland PLC, as co-documentation agents, and      certain commercial lending institutions, as lenders (filed as      Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for      the year ended December 31, 2003 and incorporated herein by      reference).                                                   |
| 10.18         |   | — |   | Term      Loan Agreement dated as of January 30, 2004 among Noble Energy      Mediterranean Ltd., as borrower, Sumitomo Mitsui Banking Corporation, as      initial lender and agent for the lenders, and certain commercial lending      institutions, as lenders (filed as Exhibit 99.1 to the Registrant’s      Current Report on Form 8-K (Date of Event:      January 30, 2004) filed May 10, 2004 and incorporated      herein by reference).                                                                                                                                                                                                      |
| 10.19         |   | — |   | Guaranty      of the Company dated January 30, 2004 guaranteeing obligations      of Noble Energy Mediterranean, Ltd. under the Term Loan Agreement dated      January 30, 2004 (filed as Exhibit 99.2 to the Registrant’s      Current Report on Form 8-K (Date of Event:      January 30, 2004) filed May 10, 2004 and incorporated      herein by reference).                                                                                                                                                                                                                                                                               |
| 10.20         |   | — |   | Term      Loan Agreement dated as of February 2, 2004 among Noble Energy      Mediterranean Ltd., as borrower, Bank One, NA, as agent for the lenders,      and certain commercial lending institutions, as lenders (filed as      Exhibit 99.3 to the Registrant’s Current Report on Form 8-K      (Date of Event: January 30, 2004) filed May 10, 2004      and incorporated herein by reference).                                                                                                                                                                                                                                                     |
| 10.21         |   | — |   | Guaranty      of the Company dated February 2, 2004 guaranteeing obligations      of Noble Energy Mediterranean, Ltd. under the Term Loan Agreement dated      February 2, 2004 (filed as Exhibit 99.4 to the Registrant’s      Current Report on Form 8-K (Date of Event:      January 30, 2004) filed May 10, 2004 and incorporated      herein by reference).                                                                                                                                                                                                                                                                               |
| 10.22         |   | — |   | Term      Loan Agreement dated as of February 4, 2004 among Noble Energy      Mediterranean Ltd., as borrower, The Royal Bank of Scotland Finance      (Ireland), as agent for the lenders and as the initial lender (filed as      Exhibit 99.5 to the Registrant’s Current Report on Form 8-K      (Date of Event: January 30, 2004) filed May 10, 2004      and incorporated herein by reference).                                                                                                                                                                                                                                                    |
| 10.23         |   | — |   | Guaranty      of the Company dated February 4, 2004 guaranteeing obligations      of Noble Energy Mediterranean, Ltd. under the Term Loan Agreement dated      February 4, 2004 (filed as Exhibit 99.6 to the Registrant’s      Current Report on Form 8-K (Date of Event:      January 30, 2004) filed May 10, 2004 and incorporated      herein by reference).                                                                                                                                                                                                                                                                               |
| 10.24*        |   | — |   | Noble      Energy, Inc. 2004 Long-Term Incentive Plan effective as of      January 1, 2004 (filed as Exhibit 10.1 to the Registrant’s      Quarterly Report on Form 10-Q for the quarter ended      June 30, 2004 and incorporated herein byreference).                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.25*        |   | — |   | Form of      Performance Units Agreement under the Noble Energy, Inc. 2004      Long-Term Incentive Program (filed as Exhibit 10.3 to the      Registrant’s Current Report on Form 8-K (Date of Event:      February 1, 2005) filed February 7, 2005 and      incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                         |
| 10.26         |   | — |   | Purchase      and Sale Agreement, dated February 7, 2006, among Noble Energy      Production, Inc., U.S. Exploration Holdings, LLC, U.S. Exploration      Holdings, Inc. and United States Exploration, Inc., filed      herewith (filed as Exhibit 10.28 to the Registrant’s Annual Report on      Form 10-K for the year ended December 31, 2005 and      incorporated herein by reference).                                                                                                                                                                                                                                                           |
| 10.27         |   | — |   | $2.1 billion      Five-Year Credit Agreement, dated December 9, 2005, among Noble      Energy, Inc., JPMorgan Chase Bank, N.A., as administrative agent,      Wachovia Bank, National Association and The Royal Bank of Scotland PLC, as      co-syndication agents, Deutsche Bank Securities Inc. and Citibank, N.A.,      as co-documentation agents, and certain other commercial lending      institutions named therein (filed as Exhibit 10.1 to the Registrant’s      Current Report on Form 8-K (Date of Event: December 9, 2005),      filed December 14, 2005 and incorporated herein by      reference).                                           |
| 10.28         |   | — |   | $2.1 billion      Five-Year Credit Agreement, dated November 30, 2006, among Noble      Energy, Inc., JPMorgan Chase Bank, N.A., as administrative agent,      Wachovia Bank, National Association and The Royal Bank of Scotland PLC, as      co-syndication agents, Deutsche Bank Securities Inc., Citibank, N.A. and      The Bank of Tokyo-Mitsubishi UFJ, Ltd., as co-documentation agents, and      certain other commercial lending institutions named therein (filed as      Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      (Date of Event: November 30, 2006), filed December 6, 2006 and      incorporated herein by reference).  |
| 10.29*        |   | — |   | Noble      Energy, Inc. 2005 Non-Employee Director Fee Deferral Plan, dated      December 5, 2005 and effective as of January 1, 2005 (filed as      Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      (Date of Event: December 5, 2005), filed December 8, 2005 and      incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                   |
| 10.30*        |   | — |   | Amendment      No. 1 to the Noble Energy, Inc. Non-Employee Director Fee      Deferral Plan, dated December 5, 2005 and effective as of      January 1, 2005 (filed as Exhibit 10.2 to the Registrant’s      Current Report on Form 8-K (Date of Event: December 5, 2005),      filed December 8, 2005 and incorporated herein by      reference).                                                                                                                                                                                                                                                                                                       |

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Table of Contents

| ExhibitNumber |   |    |                                                                                                                                                                                                                                                                       |  Exhibit **                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------------|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  10.31*  |   | — |                                                                                                                                                                                                                                                                       |  Consulting      Agreement, dated May 9, 2005 but commencing May 16, 2005, by and      between Noble Energy, Inc. and Thomas J. Edelman (filed as      Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      (Date of Event: May 16, 2005), filed May 20, 2005 and      incorporated herein by reference).                                                                                                  |
| 10.32*        |   | — |                                                                                                                                                                                                                                                                       | 2005      Stock Plan for Non-Employee Directors of Noble Energy, Inc. (filed as      Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      (Date of Event: April 26, 2005) filed April 29, 2005 and      incorporated herein by reference).                                                                                                                                                                                |
| 10.33*        |   | — |                                                                                                                                                                                                                                                                       | Form of      Stock Option Agreement under the Noble Energy, Inc. 2005 Non-Employee      Director Stock Plan (filed as Exhibit 10.1 to the Registrant’s      Quarterly Report on Form 10-Q for the quarter ended June 30,      2005 and incorporated herein by reference).                                                                                                                                                             |
| 10.34*        |   | — |                                                                                                                                                                                                                                                                       | Form of      Restricted Stock Agreement under the Noble Energy, Inc. 2005      Non-Employee Director Stock Plan (filed as Exhibit 10.2 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended      June 30, 2005 and incorporated herein by reference).                                                                                                                                                         |
| 10.35*        |   | — |                                                                                                                                                                                                                                                                       | Form of      Restricted Stock Agreement under the Noble Energy, Inc. 1992 Stock      Option and Restricted Stock Plan entered into by certain executive      officers and key employees of the Company on May 16, 2005 and      August 1, 2005, respectively (filed as Exhibit 10.4 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended      June 30, 2005 and incorporated herein by reference).  |
| 10.36         |   | — |                                                                                                                                                                                                                                                                       | Purchase      and Sale Agreement dated May 15, 2006 by and between the Company and      Coldren Resources LP (filed as Exhibit 10.1 to the Registrant’s      Quarterly Report on Form 10-Q for the quarter ended June 30,      2006 and incorporated herein by reference).                                                                                                                                                                 |
| 10.37*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. Change of Control Severance Plan for Executives (filed      as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K      (Date of Event: October 24, 2006) filed October 30, 2006 and      incorporated herein by reference).                                                                                                                                                                          |
| 10.38*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc.  1992 Stock Option and Restricted Stock Plan (as      amended through April 24, 2007), (filed as exhibit 10.1 to Registrant’s      Current Report on Form 8-K (Date of Event: April 24, 2007) filed April 30,      2007 and incorporated herein by reference).                                                                                                                                                               |
| 10.39*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. 2005 Non-Employee Director Fee Deferral Plan (as amended      effective January 1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                                |
| 10.40*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. Change of Control Severance Plan for Executives (as      amended effective January 1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                             |
| 10.41*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. Change of Control Agreement (as amended effective      January 1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                                                 |
| 10.42*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. 2004 Long-Term Incentive Plan (as amended effective      January 1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                                               |
| 10.43*        |   | — |                                                                                                                                                                                                                                                                       | Amendment      to the 2006 Performance Units Agreement (as amended effective January      1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                                              |
| 10.44*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. 2005 Deferred Compensation Plan (as amended effective      January 1, 2008) filed herewith.                                                                                                                                                                                                                                                                                                                                             |
| 10.45*        |   | — |                                                                                                                                                                                                                                                                       | Noble      Energy, Inc. Retirement Restoration Plan (as amended effective      December 1, 2007) filed herewith.                                                                                                                                                                                                                                                                                                                                                |
| 21            |   | — |                                                                                                                                                                                                                                                                       | Subsidiaries,      filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 23.1          |   | — |                                                                                                                                                                                                                                                                       | Consent      of Independent Registered Public Accounting Firm—KPMG LLP, filed      herewith.                                                                                                                                                                                                                                                                                                                                                                   |
| 23.2          |   | — |                                                                                                                                                                                                                                                                       | Consent      of Independent Registered Public Accounting Firm—PricewaterhouseCoopers      LLP, filed herewith.                                                                                                                                                                                                                                                                                                                                                 |
| 23.3          |   | — |                                                                                                                                                                                                                                                                       | Consent      of Independent Registered Public Accounting Firm—UHY LLP, filed      herewith.                                                                                                                                                                                                                                                                                                                                                                    |
| 23.4          |   | — |                                                                                                                                                                                                                                                                       | Consent      of Netherland, Sewell & Associates, Inc., filed      herewith.                                                                                                                                                                                                                                                                                                                                                                            |
| 31.1          |   | — |                                                                                                                                                                                                                                                                       | Certification      of the Company’s Chief Executive Officer Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).                                                                                                                                                                                                                                                                                                 |
| 31.2          |   | — |                                                                                                                                                                                                                                                                       | Certification      of the Company’s Chief Financial Officer Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).                                                                                                                                                                                                                                                                                                 |
| 32.1          |   | — |                                                                                                                                                                                                                                                                       | Certification      of the Company’s Chief Executive Officer Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).                                                                                                                                                                                                                                                                                                 |
| 32.2          |   | — |                                                                                                                                                                                                                                                                       | Certification      of the Company’s Chief Financial Officer Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).                                                                                                                                                                                                                                                                                                 |
| 99.1          |   | — |                                                                                                                                                                                                                                                                       | Report      of Independent Public Accounting Firm—PricewaterhouseCoopers LLP, filed      herewith.                                                                                                                                                                                                                                                                                                                                                             |
| 99.2          |   | — |                                                                                                                                                                                                                                                                       | Report      of Independent Public Accounting Firm—UHY LLP, filedherewith.                                                                                                                                                                                                                                                                                                                                                                                      |
| 99.3          |   | — |                                                                                                                                                                                                                                                                       | Report      of Netherland, Sewell & Associates, Inc, filed      herewith.                                                                                                                                                                                                                                                                                                                                                                                   |
|          |   | *       | Management      contract or compensatory plan or arrangement required to be filed as an      exhibit hereto.                                                                                                                                                          |
|          |   | **      | Copies      of exhibits will be furnished upon prepayment of 25 cents per page.      Requests should be addressed to the Senior Vice President and Chief      Financial Officer, Noble Energy, Inc., 100 Glenborough Drive,      Suite 100, Houston, Texas77067. |

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Table of Contents

| Bbl(s)  | Barrel(s)                                  |
|---------|--------------------------------------------|
| MBbls   | Thousand      barrels                      |
| MMBbls  | Million      barrels                       |
| Bpd     | Barrels      per day                       |
| Bopd    | Barrels      oil per day                   |
| Boe     | Barrels      oil equivalent                |
| MBoe    | Thousand      barrels oil equivalent       |
| MMBoe   | Million      barrels oil equivalent        |
| Boepd   | Barrels      oil equivalent per day        |
| Kgal    | Thousand      gallons                      |
| KW      | Kilowatt                                   |
| KWh     | Kilowatt      hours                        |
| MW      | Megawatt                                   |
| Mcf     | Thousand      cubic feet                   |
| MMcf    | Million      cubic feet                    |
| Bcf     | Billion      cubic feet                    |
| Tcf     | Trillion      cubic feet                   |
| Mcfpd   | Thousand      cubic feet per day           |
| MMcfpd  | Million      cubic feet per day            |
| Mcfe    | Thousand      cubic feet equivalent        |
| MMcfe   | Million      cubic feet equivalent         |
| Bcfe    | Billion      cubic feet equivalent         |
| BTU     | British      thermal unit                  |
| MMBtu   | Million      British thermal units         |
| MMBtupd | Million      British thermal units per day |
| Btupcf  | British      thermal unit per cubic foot   |
| MT      | Metric      tons                           |
| MTpd    | Metric      tons per day                   |
| LNG     | Liquefied      natural gas                 |
| LPG     | Liquefied      petroleum gas               |
| NGL     | Natural      gas liquid                    |

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