There's a new black gold rush and it's occurring underneath more than 1,000 feet of water several hundred miles off of the Gulf Coast. Oil and energy companies are setting up shop in the deepwater to drill for untapped oil. One of these companies is Houston-based Noble Energy Inc.
An IndustryWeek IW 50 Best Manufacturer for 2006, Noble Energy has three wells in the Gulf of Mexico. The latest of its three projects in the Lorien oil field located in 2,177 feet of water has reached its production target of 19,000 barrels of oil per day and 25 million cubic feet of natural gas, the company said in May. Noble Energy is the operator of Lorien with a 60% working interest in the field.
Lorien is the company's third major deepwater project to start production since October of 2005, following the startup of the Swordfish reservoir and Ticonderoga, said David Stover, Noble Energy's senior vice president, in a May statement. "The impact on our production and cash flow from the three developments is significant," he said.
At A Glance
Noble Energy Inc.
Primary Industry: Petroleum and Coal Products
Number of employees: 700
2005 In Review
Revenue: $2.1 billion
Profit Margin: 30.81%
Sales Turnover: .24
Inventory Turnover: 17.19
Revenue Growth: 63.48%
Return On Assets: 18.75%
Return On Equity: 44.23%
The company is now netting more than 24,000 barrels of oil per day and 40 million cubic feet of natural gas from the three fields.
Production from the wells contributed to a record first-quarter profit of $226.1 million in 2006, up 106% from the year-earlier period.
"Our deepwater Gulf of Mexico program is proving to be a substantial contributor with Swordfish, Lorien and Ticonderoga adding new production this year," said company President and CEO Charles Davidson in a May 2 statement.
Davidson added that the company's recent Redrock and Raton deepwater Gulf of Mexico discoveries offer significant production potential. In June, the company found 90 feet of hydrocarbon "pay" -- the existence of mineral deposits in quantities desired for commercial production-in the Raton field. The Raton well is located in approximately 3,400 feet of water and was drilled to a total depth of 20,106 feet.
In April, Noble Energy discovered "high-quality" pay in Redrock. The Redrock well was drilled 23,365 feet deep in 3,379 feet of water. Redrock also operates several onshore oil fields throughout the United States.
In February, the company expanded its operations at the Wattenberg field in Colorado when it acquired Billings, Mont.-based United States Exploration Inc. for $412 million. The acquisition significantly expands the company's operations at Wattenberg, adding 65,000 acres to the 218,000 acres the company owned prior to the purchase. The company estimates potential resources to be 465 billion cubic feet equivalent. Production is expected to grow at Wattenberg from approximately 20 million cubic feet per day to 70 million cubic feet per day by the end of 2007.
The company also has several international operations, including in Equatorial Guinea, the North Sea, Israel, Argentina and China. International operating income grew 84% to $96.4 million in the first quarter.
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