Noble Energy (NYSE:NBL) has a history of successful oil and gas exploration in the Eastern Mediterranean area, with several high-profile discoveries reported in offshore Israel. While most of the resources discovered in this area have been natural gas, the company is currently targeting a prospective oil zone in this area.

Discount Brokers Comparison: Your one-stop shop for finding the perfect broker for your investments.

Eastern Mediterranean Success
Noble Energy has reported six consecutive discoveries of natural gas resources in various fields in offshore Israel and Cyprus. These discoveries hold an estimated 35 Tcf of gross resources, or 12 Tcf net to Noble Energy.

The Tamar discovery was made in early 2009 and holds gross resources between 4.1 and 4.9 Tcf. The project is operated and 36% owned by Noble Energy and is currently under development, with first sales expected in 2012.

Another major find for Noble Energy was reported in late 2010 at the Leviathan prospect. The company holds a 40% ownership at this field and estimates that Leviathan has 17 Tcf of gross resources.

Noble Energy plans to drill further wells at Leviathan to delineate the extent of the natural gas resources here. The company is looking to start up production in 2016, with an estimated production range from 300 million to 500 million cubic feet of natural gas per day.

SEE: Oil And Gas Industry Primer

Deeper Oil Zone
Noble Energy will also drill an exploration well in late 2013 at Leviathan to test a deeper oil zone at the field. The well is targeting a Mesozoic oil zone at depths of more than 21,350 feet and the company estimates that this prospect has gross mean unrisked resource potential of 1.35 billion BOE. This exploration well carries high risk for Noble Energy, with only a 25% chance of geological success.

Noble Energy has leased the Atwood Advantage, a newly constructed ultra deepwater drill ship, to conduct this exploratory well at Leviathan. The drill ship is being built by Atwood Oceanics (NYSE:ATW) and is capable of drilling in water depths up to 12,000 feet.

If the Leviathan deep oil exploration well is successful, Noble Energy expects to develop the field with a floating production, storage and offloading (FPSO) unit, with first production in 2018. The company estimates a net production rate of 50,000 barrels of oil per day and full cycle finding and development costs of $11 per BOE.

SEE: A Guide To Investing In Oil Markets

Other Operators
Other exploration and production companies active in the Eastern Mediterranean include Apache Corporation (NYSE:APA), which has extensive operations in Egypt. The company reported average production of 158,752 BOE per day from its Egyptian operations in the second quarter of 2012.

Strong Interest
The industry has shown an interest in exploration in the Eastern Mediterranean, with Marathon Oil (NYSE:MRO), Eni (NYSE:E) and more than a dozen other oil and gas companies making bids for exploration rights in offshore Cyprus. The government of Cyprus expects to narrow down the list of bidders and begin negotiations shortly.

The Bottom Line
Noble Energy has a backlog of large discoveries of natural gas in the Eastern Mediterranean to develop over the next decade and is now seeking to repeat this success with a deep oil zone at the Leviathan prospect. The company's strong track record of exploration discoveries should give investors confidence that the company will succeed with oil as well.



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

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  6. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  7. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  9. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
  10. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  5. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  6. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!