GOM Outlook Brighter as Noble Plans 2012 GOM Plans

Noble Energy sees a brighter outlook for the Gulf of Mexico from a year ago, Noble Energy Chairman and CEO Charles D. Davidson said at the Barclays Capital 2011 CEO Energy Conference earlier this week.

While the pace of Gulf of Mexico permitting is slower than that prior to the drilling moratorium following the Macondo oil spill, the pace is more predictable and comfortable as Noble moves forward with its 2012 drilling plans for the Gulf, Davidson said.

The company was the first to receive a deepwater permit after the moratorium's end for its Santiago prospect on Mississippi Canyon Block 519 in 6,500 feet of water; the company announced in May that it had encountered 60 feet of oil pay in a high-quality Miocene reservoir at Santiago. The company is now drilling an updip sidetrack at its Deep Blue discovery in approximately 4,700 feet of water – with drilling results expected in a few weeks -- and will next appraise the Gunflint discovery on Mississippi Canyon Block 948.

Noble had drilled a downdip discovery at Deep Blue, but work was halted due to the moratorium, Davidson said. The company originally encountered 32 feet of net pay in the well; the updip sidetrack is targeting 90 to 200 million BOE gross unrisked, with the chance of success increased from 30 percent to 50 percent. Noble is using Ensco semisubmersible Ensco 8501 for its drilling program in the Gulf.

The company anticipates production from its South Raton discovery to come online late this year and production from its Galapagos project to begin in early 2012, Davidson said. As part of the Galapagos project, Santiago and the Santa Cruz and Isabela discoveries on Mississippi Canyon blocks 563 and 562 will be tied back subsea to the Na Kika production platform. Noble's net production at Galapagos will be over 10,000 b/d of oil.

Noble estimates total gross resources discovered in the Galapagos project, including Santiago, to be 130 million barrels BOE, approximately 75 percent of which is oil, and sees multiple low-risk follow-on opportunities of 65 million BOE gross mean potential. Work is progressing on the topsides and subsea loop system for the project.

Noble's current U.S. Gulf portfolio includes 102 lease blocks covering approximately 400,000 net acres and around 40 prospects and 1.9 billion BOE net of net unrisked resources.

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