Noble Energy Announces Significant Discovery at Leviathan Offshore Israel

CNNMoney.com December 29, 2010
Noble Energy, Inc. (NYSE: NBL) announced today a significant natural gas discovery at the Leviathan exploration prospect offshore Israel. Drilled in the Rachel license, the well encountered a minimum of 220 feet (67 meters) of net natural gas pay in several subsalt Miocene intervals. [See photo below -- D.R.] Apparent reservoir quality is very good, and the intervals discovered are geologically similar to those intersected at Tamar.

Leviathan-1, located in approximately 5,400 feet (1,645 meters) of water, is about 80 miles (130 kilometers) offshore of Haifa and 29 miles (47 kilometers) southwest of the Tamar discovery. The results from the well confirm the pre-drill estimated resource range, with a gross mean for Leviathan of 16 trillion cubic feet (450 billion cubic meters). The Leviathan field is estimated to cover approximately 125 square miles (325 square kilometers) and, as a result of its size, will require two or more appraisal wells to further define total gas resources.

Charles D. Davidson, Noble Energy's Chairman and CEO, said, "Leviathan is the latest major discovery for Noble Energy and is easily the largest exploration discovery in our history. In the past two years, we and our partners have made three significant natural gas discoveries in the Levantine basin. ..."

David L. Stover, the Company's President and COO, added, "Our exploration program continues to deliver outstanding results. This discovery has the potential to position Israel as a natural gas exporting nation. For nearly a year now, we have had a team evaluating market possibilities, which includes various pipeline and LNG options. It's our belief that the natural gas resources at Leviathan are sufficient to support one or more of the options being studied. We are excited to be leading the exploration and development in this new basin and look forward to determining the best development option."

Drilling at Leviathan-1 will continue to a planned total depth of 23,600 feet (7,200 meters) to evaluate two additional intervals. Current well depth is 16,960 feet (5,170 meters). Results from the deeper tests, which have a low chance of success, are expected over the next couple of months. The Company's second contracted rig will arrive in the Eastern Mediterranean in early 2011 to spud a Leviathan appraisal well located 8 miles (13 kilometers) northeast of the discovery well.

Noble Energy operates Leviathan, offshore Israel, with a 39.66 percent working interest. Other interest owners are Delek Drilling and Avner Oil Exploration with 22.67 percent each and Ratio Oil Exploration with the remaining 15 percent. The Company also operates Tamar in the Matan license and Dalit in the Michal licenses with 36 percent working interests.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.

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(16 trillion cubic feet [tcf] = c. 453 billion cubic meters [bcm]. Leviathan is almost double the size of the Tamar field off Israel's Mediterranean coast discovered in 2009 by Noble and its partners. Tamar is estimated to hold 8.4 tcf of natural gas. See also map below. Israel's proved gas reserves are estimated to be 7 tcf, up some 6 tcf from the previous year, due to the discovery of Tamar field in the Levant basin in the eastern Mediterranean, according to the latest Oil & Gas Journal's annual survey of proved reserves---Dec. 6, 2010. Houston-based Noble Energy ranks 74th among the world's top 100 oil companies, according to the latest PIW rankings.--See here. While Israel celebrates its anticipated emergence as a fuel-producing nation, record offshore gas discoveries are creating an unwanted side effect for the export-reliant country. Bank of Israel Governor Stanley Fischer is among the leaders and economists expressing concern that the finds may lead to a stronger currency, making the country�s goods more expensive abroad---please see "Israel Risks `Dutch Disease' as Gas Finds Help Strengthen Shekel," Bloomberg, Nov 2, 2010. -- D.R.)
                                                     
                                     Map: Israel's Gas Bonanza

Source: Noble via The Wall Street Journal (WSJ), December 30, 2010 ("Big Gas Find Sparks a Frenzy in Israel," by Charles Levinson and Guy Chazan) 

       Leviathan Rig (Transocean's Semi-Sub Sedco Express)

Source: Albatross via Ynet, December 29, 2010 ("Leviathan Gas Well Estimated at $45B," by Tani Goldstein, here.)