Offshore Gas Field is a ‘Monster’
March 9, 2010 by admin
Noble Energy chairman and CEO Charles Davidson expressed optimism that there will be more gas fields discovered at a press conference in Tel Aviv today.
He said, “We conducted a 3D seismic survey, which will provide very sophisticated information enabling us to know whether there are more reservoirs. We believe that there are other reserves adjacent to the Tamar and Dalit reservoirs. We’re now analyzing the results of the seismic survey. I hope that we’ll continue to find natural gas in this country. I’m optimistic about more reservoirs, whether at Leviathan or elsewhere.”
Davidson added, “Israel was the land of milk and honey in Biblical times, but in the modern era, its milk and honey and natural gas. In Israel’s deep waters, in virgin territory, a monster natural gas discovery has been made.”
Noble Energy Inc. (NYSE: NBL) is a partner in the Tamar and Dalit offshore gas fields, together with Delek Group Ltd. (TASE: DLEKG) subsidiaries Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd. It is also a partner with Delek Group in the Yam Tethys partnership, which owns a natural gas field offshore from Ashkelon, and in the Leviathan prospect, west of Tamar, with Delek Group Ratio Oil Exploration (1992) LP (TASE:RATI.L).
Noble Energy convened the press conference at the Tel Aviv Hilton not only to wax poetic about biblical Israel, but to outline its program to develop its natural gas reserves in Israel. Investors are eager for any scrap of information about the Leviathan lease, where 3D seismic survey is underway, whose results are due later this month. If gas is found, the prospect’s partners will begin drilling toward the end of the year, at an estimated cost of $100 million.
Davidson said, “The company expects to drill into another large structure during the second half of the year, and to drill in the two discoveries already made during 2011.”
The statement reiterates what Noble Energy said in the conference call following the publication of its financial report for 2009 last month, without explicitly mentioning “Leviathan”. “As for Tamar, the immediate challenge is to reach an agreement with the government on how to bring the gas to shore, since seafront real estate in Israel is very expensive. One possibility is to build a new terminal, another is to use Yam Tethys’ existing infrastructure,” Davidson said.
Davidson promised that the company would meet its timetable for the Tamar well. The well’s partners are due to publish their development plan for the reservoir in the second half of the year. The plan will reportedly cost more than $2.6 billion, with gas production beginning in early 2012.
“We’ve been here for over ten years already,” said Davidson. “Noble Energy won’t be here for years, but for decades. I can’t imagine a better place to be than here.”
Noble Energy will invest $140 million in gas exploration in Israel in 2010, almost 10% of its budget.
Shares of Israeli gas and oil exploration partnerships on the Tel Aviv Stock Exchange (TASE) have skyrocketed by hundreds and even thousands of percent in the past year, as investors seek the next Isramco. Davidson, however, sends a clear message to investors: Be careful. “Oil and gas exploration shares were hyped last year, and I urge caution,” he said. “There is no sure thing in the energy industry, and in the end, only a few companies will succeed. There’s an upside potential in the shares of Noble Energy. I’m a long-distance runner, and I don’t comment about the market’s response over the next week or two. We’re managing projects that will last us decades. In this business, you don’t plan for days, but for the long haul.”
Published by Globes [online], Israel business news – www.globes-online.com