Noble 'Excited' Over Falklands Drilling Despite Scotia
Houston-based Noble Energy Inc. has determined that the Scotia exploratory well drilled in 2012 is non-commercial after evaluating 3D seismic data and full integration of well results into its geologic models.
The Scotia well was drilled using 2D seismic interpretation, the company said in an Oct. 1 press statement. The well was drilled by the Leiv Eiriksson (UDW semisub) in the second half of 2012 by then operator Falkland Oil and Gas (FOGL), according to SubseaIQ.
The company will incur an approximately $75 million exploration expense due to the Scotia decision, and has updated its third quarter 2014 exploration expense guidance to between $230 million and $240 million. As a result, Noble expects its third quarter 2014 adjusted effective tax rate to be between 35 percent and 38 percent, with most of the tax provision representing current taxes, the company said.
Despite the Scotia setback, the company is excited about its upcoming exploration program in the Falklands next year. Noble confirmed plans Wednesday to drill the Humpback prospect following an extensive 3D seismic program over parts of Noble’s 10 million acre position.
“The Falklands provides an opportunity to create another core area for Noble Energy through organic exploration success,” said Mike Putnam, Noble’s vice president of exploration, in a statement.
The Humpback prospect, Noble’s initial operated prospect, lies in the Fitzroy sub-basin of the Southern Area license. Humpback is one of multiple stacked fan prospects clustered together in the sub-basin, which have an estimated gross unrisked resource potential of about one billion barrels of oil equivalent.
Drilling is expected to begin in mid-2015, depending on when the rig arrives.
The company also is finalizing prospect locations for a second exploration well, which will be drilled later next year following Humpback’s results.
Noble is operator of its offshore Falkland Island licenses with a 35 percent working interest. In August 2012, Noble farmed-in to FOGL’s Northern Area Licenses for a 35 percent interest except for two excluded areas, which include the Loligo complex and the Nimrod-Garrodia complex. Operatorship of the farm-in area was transferred to Noble in early 2013, according to FOGL’s website.
As part of that agreement, Noble would also farm-in to FOGL’s Southern Area Licenses for a 35 percent interest, and was expected to become the designated operator of the licenses no later than early 2014.
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