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. 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.
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.
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 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.
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.
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.
Stock AnalysisWynn Resorts has experienced a rally recently. Will it remain a good bet?
Stock AnalysisThe bulls won for a bit in early October, but will bears have the last laugh?
Stock AnalysisTwitter is an enigma to many investors, but its story is pretty straightforward.
Investing BasicsInvestors benefit when company research incorporates seasonality trends that predict relative strength and weakness throughout the calendar year.
Chart AdvisorTraders are turning their attention to the charts of commodity stocks to get a better idea of the future trend. We'll take a look at three stocks from different segments of the basic materials ...
Stock AnalysisIf you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
Stock AnalysisHere's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
Stock AnalysisStuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
EconomicsEmerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
Stock AnalysisPepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
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 >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
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 >>
The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>