Unexpected technical problems have emerged in the Block 12 concession in
Cypriot waters, admits
Noble
Energy Inc.
Chairman and CEO Charles Davidson. However, Davidson claims that these problems
will not affect drilling chances for success.
In the Noble Energy third quarter 2011 earnings conference call,
Davidson said that in addition to drillings that have already been announced,
"Noble Energy plans to embark on at least two more exploratory drillings
in
Israel
."
Block 12, which is
located 33 km north of the Leviathan discovery, is the largest gas installation
in Noble Energy's licensed area that has not yet been drilled. According to
estimates, Block 12 holds about 10 trillion cubic feet of gas, slightly more
than the Tamar discovery and smaller than the Leviathan discovery.
Yitzhak Tshuva'sDelek Group Ltd.
unitsDelek Drilling LP and
Avner Oil and Gas LP, have an option to acquire 30% of Block 12, conditional
upon receiving Cypriot government approval.
Noble Energy's
exploratory drilling in Block 12 began in late September, and achieved media
attention following the Turkish government's threats to attack the drill site. "Globes"
reported last week that pockets of water are hampering drilling by the Homer
Ferrington rig in Block 12, and that these pockets of water will probably delay
completion of the drilling by a month - from November to December. Similar
problems occurred at the Leviathan 2 well.
In the conference call,
Davidson was asked, "Is the media report that Noble Energy has run into
problems accurate?"
"We are
experiencing a highly stressful situation which has forced us to increase the
weight of the mud and to move up the casing date," said Davidson. "This
difficulty made it imperative to make small alterations, but no real
changes." Davidson refrained from saying which difficulties will cause a
delay in completion, but at another point in the conversation he said drilling
will be finished by the end of the year.
Davidson spoke in detail
about the possibility of exporting gas from
Israel
.
"We assume that all of the gas extracted from Tamar will serve the Israeli
domestic market, as well as a portion of the gas from Leviathan. The remainder
will be exported. A committee, headed by Shaul Tsemach, has been appointed to
examine the export issue, and we are providing the committee with information. Domestic
consumption is a very good thing. We have discovered a very large amount of gas
in the area and therefore it is extremely important to make a decision as soon
as possible."
Noble Energy's net
profit rose to $441 million for the third quarter of 2011, from $232 million in
the corresponding quarter of 2010. Revenue rose 39% to $924 million.
Noble Energy also
reported that sales of natural gas in
Israel
,
from Yam Tethys, which it owns with Delek, has reached a peak having risen 28%.
Noble Energy owns 40% of the Leviathan license, 36% of the Tamar license and
36% of the Dalit license, which are located in Israeli economic waters.