It’s not what you think. Although Israel is mentioned often in the main stream press, rarely is the news related to a burgeoning offshore industry – much less in the growing deepwater subsalt sector. Noble Energy has had more than a decade of experiencing operating in the Mediterranean Sea, offshore Israel. The company holds a 47% working interest in the Mari-D, one of its key international assets. Mari-B was the first offshore natural gas production facility. In 2007, gross field deliverability was 600 MMcf/d from six wells.
As early as 2004, the company began selling gas to the Israeli Electric Corp. and has steadily increased as Israel's natural gas infrastructure continues developed. In addition to producing gas for onshore use in Israel, the company has continued its exploration efforts as well. As of December 2007, Noble Energy held 123,552 gross developed acres and 1.18 million gross undeveloped acres.
The company has discovered more natural gas at the Tamar prospect in the Matan license. The Tamar #1 well lies in 5,500 ft of water. It was drilled to a total depth of 16,076 ft to test a subsalt, lower-Miocene structure in the Levantine Basin. Formation logs identified approximately 460 ft of net pay in three high-quality reservoirs. The company reported the reservoirs encountered were greater than anticipated at the well. This was Noble’s first offshore well in Israel in five years. And, according to CEO Charles D. Davidson, is one of the largest discoveries in the company’s history. Early indications for the well show an estimate of more than 3 Tcf of natural gas.
The Tamar well will undergo further testing after it is completed and Noble Energy and its partners may drill up to two additional wells in the basin. Noble operates the well with a 36% working interest. Its partners include Isramco Negev 2 (28.75%), Delek Drilling (15.625%), Avner Oil Exploration (15.625%), and Dor Gas Exploration (4%).
Consultants Friedman, Billings, Ramsey & Co., Inc. (FBR) estimates the net value of the discovery at approximately US $750 million. This find is also right on the hills of Noble’s Gunflint discovery in, which is also a subsalt prospect in the U.S. Gulf of Mexico (GoM) announced in mid-October 2008. Commenting on the subsalt potential for today’s oil and gas market, FBR said the Israeli success bodes well for the E&P investment thesis of ongoing and underappreciated international exploration. “Armed with new 3-D technology and better analytical tools, there is an international exploration renaissance taking place areas like Brazil, Israel, Ghana, Equatorial Guinea, Sierra Leon, and so on.”
According to FBR, companies with material exposure to deepwater sub-salt exploration potential are typical favorites for investors in the energy industry. While prices continue to fluctuate, it’s a good sign that many operators are moving forward into deeper water searching for unconventional resources.
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