Noble Energy Inc.
) share price climbed 40 cents to close at $67.40 on Oct 14, 2013
on the back of the company's announcement of a planned investment
of $10 billion in the next five years in the Niobrara play in the
Denver-Julesburg (DJ) Basin.
The lofty investment is expected to bolster Noble Energy's
production level in the coming years. Noble Energy will allocate
43% of its capital budget in the Niobrara Basin in 2013 and will
exploit the asset to attain its annual production growth target
of 17% through 2017.
Noble Energy's production volume might reach 540,000 barrels of
oil equivalent per day (boe/d) by 2017, more than double the
current production level of 260,000 boe/d, if the company
accomplishes its target.
Roughly $1.7 million is being spent in 2013 for the development
of the Niobrara play. This involves Noble Energy's plan of
finishing 300 wells and ramping up production from 90,000 boe/d
in 2012 to 110,000 boe/d by year-end 2013.
With more wells coming online, production is estimated to
increase by 180,000 boe/d and would allow Noble to achieve its
ambitious production goal. Noble Energy has already witnessed
favorable drilling results in 9,500 horizontal well locations in
the Niobrara play.
The company is enhancing its operational capabilities to pull off
its plan of drilling 500 wells per year by 2017 which would
accelerate production volume by 20% a year. We believe these
investments will fetch lucrative returns for Noble Energy which
in turn will lead to value accretion for the company's
The Colorado mishap might however delay Noble Energy's production
commitments in the short run. Over the long haul, significant oil
discoveries in the company's prime Gulf of Mexico prospect and
encouraging opportunities from the domestic natural gas assets
will act as major catalysts to growth.
Another leading oil and gas operator expected to capitalize on
the reserve-rich DJ Basin is
Anadarko Petroleum Corp.
) with its prospects in the adjacent Wattenberg play.
At the moment, Noble Energy carries a Zacks Rank #3 (Hold).
However, other better-placed exploration and production players
include Zacks Ranked #1 (Strong Buy)
Matador Resources Co.
Stone Energy Corp.
ANADARKO PETROL (APC): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
NOBLE ENERGY (NBL): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
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