Noble to sell Gulf of Mexico shelf assets

May 19, 2006
Noble Energy Inc., Houston, has agreed to sell essentially all of its Gulf of Mexico shelf assets to Coldren Resources LP for $625 million.

By OGJ editors
HOUSTON, May 19 -- Noble Energy Inc., Houston, has agreed to sell essentially all of its Gulf of Mexico shelf assets to Coldren Resources LP for $625 million.

Coldren Resources is a subsidiary of Coldren Oil & Gas Co. LP, New Orleans, formed last August by the private equity firm First Reserve Corp. "to pursue low-risk, drill-to-earn opportunities on the Gulf of Mexico shelf."

Noble Energy will retain its interest in the Main Pass area, where facilities damaged by hurricanes in 2004 and 2005 are under repair. The company plans to continue exploration and production in the deepwater gulf and onshore Gulf Coast areas.

Net production to Noble Energy from the assets being sold totals 5,000 b/d of oil and 90 MMcfd of natural gas. On Mar. 1, Noble Energy's proved reserves for those assets totaled 7 million bbl of oil and 120 bcf of gas.

The sale is expected to close by June 30 with an effective date of Mar. 1.

After-tax cash proceeds should be $525 million. The company expects a pretax gain of $270 million from the sale, which officials said would be more than offset by the noncash items included a pretax charge of $390 million related to cash flow hedges, and a net tax benefit of $5 million.

In other action, Noble Energy's directors authorized the purchase of $500 million of the company's common stock.