Noble Busy with Upstream Activity

Oil and gas exploration and production company, Noble Energy Inc. ( NBL - Analyst Report ) successfully drilled a 15,989 feet well at the Big Bend exploration prospect in the deepwater Gulf of Mexico. The well, located in 7,200 feet of water on Mississippi Canyon Block 698, encountered roughly 150 feet of net oil pay in two high-quality Miocene reservoirs.

Noble Energy has a 54% working interest in the Big Bend prospect making it a major operator along with other stake owners like W&T Energy VI, LLC – a business wing of W&T Offshore Inc. ( WTI - Snapshot Report ) – with a 20% interest, Red Willow Offshore LLC with 15.4% and Houston Energy Deepwater Ventures V, LLC with 10.6% ownership.

The company also declared drilling results from its offshore Falkland Scotia exploration well. The well drilled to a depth of 18,226 feet accomplished its Cretaceous objective on the 2D seismic scale. Initially the well logging identified 164 feet of low quality reservoir at the targeted drilling section and came across hydrocarbons.

The company has a 35% interest in the 10 million acre Scotia prospect accompanied by Edison International Spa with a 25% interest and Falkland Oil & Gas Ltd. ("FOGL.L") with a 40% stake.

Although the Scotia well did not witness significant reservoir section and experienced hydrocarbons quantity below the targeted level, the company is keen on exploring the viability of this prospect with the acquisition of 3D seismic technology. The technology would help in assessing the possibilities of future exploration activity.

Meanwhile, the Big Bend find following the success at Galapagos will drive future growth opportunities at Noble Energy. With immense reservoir assets and high fluid characteristics, we believe this prospect will augment production leading to upside in the near-term top line.

Noble Energy is firmly focused on the development of its deepwater exploration programs. The company at the end of September 2012 signed a 3-year deal with Atwood Oceanics Inc.’s ( ATW - Snapshot Report ) subsidiary for the construction of a new build drillship to boost its major deepwater exploration and development activities.

Another exploration and production company, Anadarko Petroleum Corporation’s ( APC - Analyst Report ) Golfinho and Atum prospects are expected to propel growth with current reserve expansion. Also, additional recoverable reserves experienced at the Wattenberg play will be a vital element augmenting the company’s top line going forward.

The Zacks Consensus Estimates for Noble Energy for the fourth quarter and full year 2012 currently stand at $1.02 and $4.55 per share, respectively. The company had to shut down several of its deepwater operations in the wake of Hurricane Sandy.

Production could not be restored because of flooding and maintenance outages. In view of this, the company expects sales volume to be on the lower end of the 2012 guidance range of 242-250 thousand barrels of oil equivalent per day (Mboe/d).

Based in Houston, Texas, Noble Energy engages in the acquisition, exploration, development, production, and marketing of crude oil, natural gas, and natural gas liquids in the DJ Basin, Marcellus Shale, deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy retains a short-term Zacks #3 Rank (Hold rating).