Independent energy company,
Noble Energy Inc.
) inked a three-year agreement with a subsidiary of Texas-based
drilling contracting company,
Atwood Oceanics Inc.
) for the construction of a new build drillship to enhance its
major deepwater exploration and development activities.
The drillship, Atwood Advantage, has the capability to reach at
greater depths. The first exploration prospect to be drilled is at
the Eastern Mediterranean play. Currently the drillship is under
construction by South Korea-based Daewoo Shipbuilding & Marine
Engineering Corporation, Limited. The product is expected to be
received in the fourth quarter of 2013.
The presence of dual BOP systems, 40,000 feet drill depth
ratings, improved offline capabilities and increased mobility will
certainly boost Noble Energy's worldwide exploration projects. The
implementation of BOP systems would enable the company to save on
its increasing spread costs which will spur margins in the near
The contract signifies Noble Energy's hardened focus on the
growth of its overseas offshore exploration programs. We believe
the company's new strategy of optimizing its global oil and natural
gas assets will generate favorable returns.
Moreover, the steady rise in crude oil and slowly recovering
natural gas prices in the international market will propel the
revenue performance of the company. Also, Noble Energy's series of
non-core asset sale of over $1.1 billion during the second quarter
2012 will stimulate the pace of the company's core deepwater
exploration projects. This will lead to smooth and timely execution
of the programs.
Noble Energy's Galapagos prospect in the Gulf of Mexico has made
tremendous progress with all the three wells producing at levels
higher than originally projected. The company's net production of
13,000 barrels of oil per day and 8 million cubic feet of natural
gas per day outstripped earlier projection by about 30%. However,
unexpected rig accidents in the deepwater operations and unplanned
outages are risks that Noble Energy needs to watch out for.
Noble Energy expects its sales volumes to improve due to higher
contribution from Galapagos, continuation of the drilling programs
in DJ Basin and Marcellus Shale, and increased sales in Israel. For
2012, sales volume is expected to be in the range of 236 thousand
barrels of oil equivalent per day (Mboe/d) to 244 Mboe/d.
Currently, the Zacks Consensus Estimates for the third quarter
and full year 2012 for Texas-based Noble Energy are pegged at $1.05
per share and $4.91 per share, respectively.
One of the company's closest peers,
), recently announced its decision to divest a 20% stake in Kitimat
liquefied natural gas ("LNG") export project for $15 billion.
Noble Energy currently has a Zacks #3 Rank (short-term Hold
rating). The company operates internationally and engages in the
acquisition, exploration, development, production, and marketing of
crude oil, natural gas and natural gas liquids. As of now, the
company has a market capitalization of $16.57 billion.
APACHE CORP (APA): Free Stock Analysis Report
ATWOOD OCEANICS (ATW): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis Report
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