* Targets areas of Nevada where little drilling seen so far
* Acreage to be tested with vertical wells
* Noble has 350,000 Nevada acres
By Anna Driver
Oct 11 Noble Energy said on Thursday it plans to
explore for crude oil in areas of Nevada that have seen little
drilling, as the U.S. exploration and production company starts
to assess its longer-term prospects.
Noble and other oil and gas companies rely on developed
reserves to grow output and generate cash flow. Because those
reserves hold a finite amount of recoverable oil and gas,
companies must always scout out riskier prospects for future
In addition to the 350,000 prospective acres Noble has
acquired in the far northeastern corner of Nevada, Noble told
analysts on a conference call it plans to drill in waters off
the Falkland Islands and it will explore for "deep oil" in the
"We do not expect all of them to work," Chuck Davidson,
Noble's chief executive officer, said. "That is always true with
exploration, but with the prospects that we have highlighted
today, it would just take one to be successful to have a very
meaningful impact on our company."
On Noble's acreage in Nevada there are about seven very old
wells drilled. The company, which is in the process of acquiring
seismic data, plans to first test the acreage using vertical
wells. Depending on those results, Noble may switch to
horizontal drilling, Susan Cunningham, head of exploration, told
First production in Nevada is expected in 2014, but the
company has assigned the project a 55 percent chance of
succeeding. The acreage may hold up to 1.3 billion barrels oil
equivalent, Noble said.
Oil-bearing rock formations in places like the Bakken and
Eagle Ford shale are already crowded with drillers, but there
are only a handful of small operators in Nevada.
Noble and its partners estimate their prospects off the
Falkland Islands may hold up to 12 billion barrels oil
equivalent. The Houston company will spend an estimated $180
million to $230 million over three years on the project and sees
production of 50,000 barrels per day by 2020.
In the eastern Mediterranean, Noble plans to explore for oil
located far beneath its Leviathan gas discovery. Production from
the project is not expected until 2018 and it has a 25 percent
chance of success, Noble estimates.
Shares of Noble fell 9 cents to $94.02 in midday New York
Stock Exchange trading. Since the start of the year, shares are
down 0.4 percent, similar to a 0.2 percent decline in the SIG
index of oil and gas companies.