Noble Energy Inc.’s (NBL) strategy to expand its operation in the resource rich Gulf of Mexico (GoM) has started to yield results. The company announced encouraging final well results at the Katmai exploration well and the Dantzler appraisal well in the deepwater GoM.
Noble Energy has plans to spend $1.5 billion in its global deepwater operations in 2014, out of which a portion is earmarked for strengthening its GoM footprint. The company is pursuing an active exploration program in the region with the development of the Big Bend, Gunflint and Dantzler projects.
At Katmai, in the Green Canyon zone, a total of 154 net feet of crude oil pay was discovered in multiple reservoirs, including 117 net feet in Middle Miocene and 37 net feet in Lower Miocene reservoirs. The well was drilled to a total depth of 27,900 feet in 2,100 feet of water.
At the Dantzler-2 appraisal well, located in Mississippi Canyon 782, Noble Energy discovered 122 net feet of crude oil pay in two high-quality Miocene reservoirs. The well was drilled to a total depth of 18,210 feet in 6,600 feet of water.
The new finding in a way justifies the company’s capital investment decision and enhances its fossil fuel reserve. The reserve at Katmai is now expected in the range of 40–100 million barrels of oil equivalent (boe), including 40–60 million boe discovered from this initial well. Gross resources at Dantzler have increased to 65–100 million boe from 55–95 million boe.
At the beginning of the year the company was expecting a natural decline in production from its existing GoM assets due to maturation of assets. Undoubtedly, the new finding will help Noble Energy to boost its production from the region going forward. Noble Energy is the operator of Katmai and Dantzler, having a working interest of 50% and 45% respectively.
In Jun 2014, Noble Energy acquired 50% of BP Plc.’s (BP) interest in 17 deepwater exploration leases in the GoM. In addition, the company acquired an exploration license in offshore Gabon (read: Noble Energy Gets Exploration License in Offshore Gabon).
Noble Energy currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Cheniere Energy, Inc. (LNG) and Sanchez Energy Corporation (SN), both sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment