Noble Energy estimates Leviathan double Tamar size

Global oil and gas exploration company Noble Energy (NYSE: NBL) said that initial analysis of 2D and 3D seismic data leads the firm to estimate the gross unrisked resource potential on its Eastern Mediterranean acreage to be in excess of 30 trillion cubic feet. Noble made the claim in a notice ahead of its analysts meeting today in Houston.

Noble Energy also said that the Leviathan prospect is its "next planned exploration target in the region, to spud in the fourth quarter 2010." Noble said that Leviathan, offshore Israel in the Rachel and Amit licenses, has gross unrisked mean resources of 16 trillion cubic feet (tcf) of natural gas and a geologic chance of success of 50%.

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Leviathan refers to five "Ratio-Yam" licenses - Amit, Rachel, David, Hannah, and Eran - with a total area of 3,320 square kilometers, about 130 kilometers off the coast of Israel.

Noble owns a 39.66% stake in the licenses, Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67%, and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.

Noble also published its progress on the Tamar project, saying that it has raised the estimate of the size of the project. Gross recoverable resources at Tamar have been increased by 33% to 8.4 Tcf of gross natural gas as a result of updated reservoir studies. The project remains on schedule for sanction in 2010 and first production in 2012.

In total, Noble Energy's discoveries represent approximately 35 years of Israel's natural gas needs at projected 2012 demand rates. The capital investment for Tamar is estimated at $2.8 billion gross. Deutsche Bank analyst Richard Gussow said that since the Tamar project is expected to supply Israel with its natural gas needs for the next 3 decades, a discovery at Leviathan, should there be one, would be earmarked for export. Export the gas would likely be through LNG (liquefied natural gas), which Gussow calls a long-term process that would take at least 6 years and would require heavy capital expenditure.

Gussow noted, "Delek has spoken of Asia as a target market due to the current high prices there, and we believe that the Atlantic market would also be targeted due to Europe's desire to reduce reliance on Russian gas."

Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2010