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Noble Energy eyes South, East Falkland basins

Noble Energy Inc. will take a farmout from Falkland Oil & Gas Ltd. and will invest $180-230 million in the next 3 years in the South and East Falkland basins in the South Atlantic.

FOGL’s license position consists of 10 million acres (see map, OGJ, Dec. 5, 2005, p. 35). Noble Energy said it has identified numerous oil leads on 2D data with an unrisked gross resource potential exceeding 6 billion bbl of oil.

Noble Energy Falklands Ltd. will farm-in to FOGL’s northern area licenses for a 35% interest except for two excluded areas. FOGL will continue as operator of all northern area licenses until early 2013,

when operatorship of the farm-in area will be transferred to Noble.

The excluded areas will be delineated both geographically and stratigraphically and comprise the Loligo complex and the Nimrod-Garrodia complex. Noble will not participate in certain stratigraphic horizons in these excluded areas, and FOGL will retain a 75% interest and operatorship with Edison International SPA holding the remaining 25% interest. However, Noble will remain a participant in the excluded areas regarding other horizons.

Noble will also farm-in to the southern area licenses for a 35% interest, with FOGL continuing as operator until no later than early 2014, when Noble will become operator.

FOGL will propose to the partners that the Scotia prospect in the northern area licenses will be drilled in the fourth quarter of 2012 immediately following the FOGL Loligo well.

Noble’s financial contribution comprises the following elements:

• 60% of the Scotia well costs, including associated costs incurred during 2011.

• A $25 million cash contribution to be paid in January 2013 relating mainly to certain historical costs.

• 60% of the costs of the southern area licenses commitment well.

• 45% of a discretionary exploration well, should Noble elect to participate in the well.

After completing the farmout, the equity split in the northern area licenses will be Noble operator with 35%, FOGL 40%, and Edison 25%. FOGL will operate the retained Loligo complex and the Nimrod-Garrodia complex with 75%, and Edison will have 25%. The equity split in the southern area licenses will be FOGL operator with 52.5%, Noble 35%, and Edison 12.5%.

If suitable encouragement were gained from the 2012 drilling results, FOGL’s forward program is likely to include two 3D seismic surveys to be shot in the northern and southern area licenses starting in early 2013. Further exploratory drilling starting in late 2014 and may include a program of as many as four wells.

Noble Energy said the transaction will increase its worldwide leasehold by more than 70% gross and 40% net.


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