Noble Energy Plans Oil Exploration and Drilling in Nevada
Noble, a U.S. oil exploration and production company, together with other oil and gas firms depend on developed crude reserves to increase output and make cash flow. Since those reserves contain a limited quantity of recoverable gas and oil, firms must always look for riskier prospects in order to grow.
Aside from Noble’s oil investment of 350,000 prospective acres located in Nevada’s far northeastern corner, the company told analysts, through a conference call, that it is thinking of conducting oil drilling activities in the Falkland Islands’ offshore area and that it intends to explore the Mediterranean Sea.
The company does not expect everything to work, said Chuck Davidson, the firm’s chief executive officer. That is oftentimes true with oil exploration. However, with the prospects mentioned, it would only take one successfull well to have a very significant effect on the firm.
On the Nevada acreage of Noble, there are around seven extremely old wells for possible new oil drilling and investment. The firm, which is obtaining seismic data, intends to test the acreage using vertical wells. The results will then determine if the company shifts to horizontal drilling, said exploration head Susan Cunningham to analysts.
Initial production in Nevada is anticipated in 2014. However, the Houston-based oil exploration and production company, projects a 55 percent success rate. Noble said that the acreage may have up to as much as 1.3 billion oil barrels.
Hydrocarbon-bearing rock formations like the Eagle Ford and Bakken shale already have a lot of oil drillers working on extracting them. But in Nevada, there are only a few small operators.
Noble, together with its partners, estimates that their prospects in the Falkland Island’s offshore area have as much as 12 million barrels of reserves. The company will be spending about $180 to $200 million for the project in the coming three years and sees a total daily output of 50,000 barrels by 2020.
In the eastern parts of the Mediterranean, Noble is thinking of conducting oil exploration activities far below its discovery of Leviathan gas. The project’s output isn’t expected until 2018 and the company estimates a 25 percent possibility for success.