Noble Energy Inc.
) announced drilling results from its Paraiso-1 exploration well
in offshore Nicaragua. Situated in the Tyra Bank concession area
in a water depth of 1,220 feet, the well was drilled to a total
depth of 10,415 feet.
The Paraiso-1 well is the first deepwater project carried out
by Noble Energy off the coast of Nicaragua and is considered to
be a new frontier exploration concept in the region. The company
holds a 70% working interest in the prospect while the allocation
of the remaining interest to other parties is subject to
Despite showing hydrocarbon potential and tertiary-age
carbonate reservoirs in the early stage, drilling results at the
Paraiso-1 well were a bit disappointing as the company did not
encounter any hydrocarbon accumulation.
However, Noble Energy is optimistic and noted several positive
observations during drilling. It plans to incorporate the
information collected from the well into their regional geologic
model to examine the possibility of any future prospect from its
over two million offshore acreage position in Nicaragua.
The exploration cost incurred during the drilling activities
will not impose any additional cost burden on Noble Energy since
the company has already included seismic acquisition and
processing, unsuccessful well costs, and other geologic and
geophysical expenditures in its fourth quarter 2013 exploration
Fourth quarter total exploration expense is expected to be in
the range $225 million to $265 million. The fourth quarter
exploration expense guidance indicates that the full year number
would come in on the lower end of the original guidance.
Although Noble Energy suffered a minor setback in the
Nicaragua prospect, we believe its diversified global exploration
portfolio will contribute to a steady revenue stream. The
company's operating assets at the Eastern Mediterranean and West
Africa region will present attractive long-term growth
opportunities in the future.
Currently, Noble Energy carries a Zacks Rank #3 (Hold). Other
oil and gas counterparts looking good include Zacks Ranked #1
Abraxas Petroleum Corp.
Matador Resources Company
Bonanza Creek Energy, Inc.
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NOBLE ENERGY (NBL): Free Stock Analysis
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