Noble Energy (NYSE:NBL) reported continued success on its exploration and development program in the Eastern Mediterranean during 2011. The company also remained a leader in the development of the Niobrara formation, an emerging onshore play in the United States. (To know more about oil and gas, read Oil And Gas Industry Primer.)
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Eastern Mediterranean
Noble Energy has approximately 3 million gross acres to explore in the Eastern Mediterranean and has reported a number of successes since entering this area. The company is producing from the Mari B discovery and expects production to begin from the Noa prospect in the second half of 2012.

Noble Energy also made a significant discovery at the Tamar prospect and estimates that this area has gross resources of 8.4 Tcf of natural gas.

Noble Energy's most recent success in the Eastern Mediterranean was offshore Israel at the Leviathan prospect. The company reported that the Leviathan #3 well found approximately 300 feet of net natural gas pay in multiple intervals. Noble Energy also said that the reservoir and thickness of the pay was better than expected and raised the gross mean resource estimate to 17 Tcf, with a range from 14 to 20 Tcf.

Noble Energy is trying to extend the success it has achieved in the Eastern Mediterranean into nearby areas. The company is currently drilling the Cyprus A-1 well located on Block 12 offshore Cyprus. (Find out how to invest and protect your investments in this slippery sector. For more, see What Determines Oil Prices?)

Five-Year Growth Plan
Noble Energy plans to leverage the company's properties in the Eastern Mediterranean and other areas of its portfolio to grow production at a 17% compound annual growth rate over the next five years. If successful, the company's production will reach 490,000 barrels of oil equivalent (BOE) per day by the end of 2016.

Noble Energy estimates that proved reserves will grow at the higher annual rate of 20%, and reach 2.7 billion BOE by 2015.

The development of the Niobrara is a key part of the company's five-year growth plan and Noble Energy maintained its status in 2011 as a leader in this play. Noble Energy drilled approximately 85 wells into the Niobrara in 2011, and has more than 840,000 net acres under lease in the Denver-Julesburg basin. Noble Energy estimates that net production from the Niobrara will increase from the current level of 14,000 BOE per day to 70,000 BOE per day by 2016.

Marcellus Shale
Noble Energy entered into an agreement with CONSOL Energy (NYSE:CNX) to jointly develop 628,000 net acres in the Marcellus Shale in Pennsylvania and West Virginia. The company paid approximately $1 billion for a 50% interest in the undeveloped acreage and agreed to pay a $2.1 billion drilling carry to CONSOL Energy over the next eight years.

Other operators in the Marcellus Shale include Range Resources (NYSE:RRC), which recently achieved production of 400 million cubic feet of natural gas equivalents per day from this play.

Many other exploration and production companies have used joint ventures to share the cost and risk of development in the Marcellus Shale. Magnum Hunter Resources (NYSE:MHR) and Stone Corporation (NYSE:SGY) signed an agreement to jointly develop leasehold in West Virginia.

The Bottom Line
Noble Energy's risky exploration of the Eastern Mediterranean area has paid off and the company is now harvesting the results of that decision. The company plans to leverage this area and other oil and gas properties to grow production and proved reserves at a double digit rate. (For additional reading, check out A Guide To Investing In Oil Markets.)

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.