Noble Energy (NBL) recently stated that it expects 18% annual production growth for the next five years, resulting in 2018 production above 600,000 barrels of oil equivalent per day. Noble produced 293,000 BOE per day in the third quarter of this year, so the company expects to more than double its production in just five years. Is it enough to make Noble Energy a good candidate for your portfolio?

Concentrating on the DJ Basin and Marcellus
Noble plans to allocate $4.8 billion to capital spending in 2014, a 26% increase from this year's figure. Almost 70% of this money will go to DJ Basin and Marcellus shale operations. Noble expects 28% production growth in the DJ Basin in 2014, where it holds more than 600,000 net acres.

Noble recently exchanged its DJ Basin acreage with Anadarko Petroleum (APC), which holds 350,000 net acres in the area. Prior to the exchange, the acreage belonging to both Noble and Anadarko was scattered. The exchanged helped both companies get better value out of the existing assets. However, this move did not help Anadarko's shares, which are pressed by the prospect of having to pay up to $14.2 billion in damages related to the spinoff of the titanium dioxide producer Tronox.

Noble will also be active in the Marcellus shale, where it expects a compound annual growth rate of 46% over the next five years and 90% production growth in 2014. The Marcellus shale was a good source of growth for companies like Cabot Oil & Gas (CTRA 1.95%), which is up 55% this year. Cabot, which holds 200,000 net acres in the area, decided to increase its 2014 capital spending program by 25% in comparison with 2013. Cabot expects a 2014 production growth rate in the range of 30%-50%.

Good position to grow further
Noble managed to preserve good growth rates without taking on excessive leverage. The company finished the third quarter with $4.3 billion of debt. With $900 million of cash on hand and a $3.2 billion unused revolver credit, the company is in a good position to fund its growth.

Despite the fact that Noble has grown close to $25 billion in market capitalization, the company continues to show growth possibilities. Besides growth from its U.S. horizontal drilling activity, Noble expects 15% production growth from its Israeli assets, citing a growing domestic gas market in Israel.

Noble stated that it increased the estimate of its offshore Leviathan field in Israel to 1.5 billion barrels. However, it's worth noting that Noble's Israeli partners took a conservative stance and disclosed that the new estimates weren't in accordance with Israeli reporting regulations.

Bottom line
Noble's expectations look great, but will the company deliver actual results? I think so. Noble has had a successful track record of executing against its own strategy. Next year, the growth will be backed up by a strong balance sheet and rising capital expenditures.

Despite the fact that Noble gained 35% this year, the company sells at less than 18 times its future earnings. This is a conservative valuation given Noble's continuing growth. Yes, the company had a failure in Nicaragua this year, where Noble's first well came up dry. However, this is just the first well in the area where Noble has as much as 2 million acres.

All in all, Noble looks like a decent bet going into 2014.