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Noble Energy Inc. (NBL - Analyst Report) announced drilling results from its Leviathan #4 appraisal well situated off the coast of Israel. The well placed on the Rachel block is now estimated to yield gross recoverable reserve of 18 trillion cubic feet (Tcf), in a range of 15 Tcf to 21 Tcf. The previous recoverable reserves estimate at Leviathan was17 Tcf.

The Leviathan well, which was drilled to a depth of 16,992 feet, came across 454 net feet of natural gas pay. This is the thickest net pay from all the wells drilled in the Leviathan. Noble Energy is the major operator in the Leviathan play holding a 39.66% stake. Other interest owners include Israel’s Delek Drilling and Avner Oil Exploration with each possessing 22.67% while Ratio Oil Exploration has a 15% stake.

Following the Leviathan #4 operations and on approval from the partner, the company intends to move the Ensco 5006 rig to the Karish prospect in the Alon C block located offshore Israel. Noble Energy is also the key stakeholder in the Karish play with 47.06% interest while Delek Drilling and Avner Oil each have 26.47% stakes.

The Karish play has a pre-drill estimated reserve of 3.0 Tcf, in the range of 2.3 Tcf to 3.6 Tcf. The well is projected to reach total depth by the second quarter of 2013.

Presently, Noble Energy and other Leviathan partners are negotiating with Woodside Petroleum Ltd for a possible partnership. The interested parties are expected to draw a farmout agreement for the expansion of Leviathan resources.

With growing demand for natural gas in Israel, the company is aggressively investing in the Leviathan and is currently negotiating with the Israel government for the approval of another project in the concerned prospect. Noble Energy plans to spend about $400 million in the Eastern Mediterranean operations in 2013.

We believe the company’s reserves-rich portfolio, especially in West Africa and Eastern Mediterranean, will act as a catalyst to growth, going forward. With start-up of production at the Tamar play positioned in offshore Israel, the company expects a ramp-up in sales volume in the upcoming quarters. Noble Energy currently carries a Zacks Rank #3 (Hold).

We presently prefer Zacks Rank #1 (Strong Buy) operators, Range Resources Corporation (RRC - Analyst Report) and Linn Co, LLC (LNCO - Snapshot Report), as well as Zacks Rank #2 (Buy) Hyperdynamics Corporation (HDY).

Based in Houston, TX, Noble Energy is an independent oil and gas company engaged in the acquisition, exploration, development, production, and marketing of crude oil, natural gas, and natural gas liquids mainly in the United States, West Africa, and Eastern Mediterranean.

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