Noble Energy Inc., whose exploration efforts are spread across the globe, last week gave investors a peek at five frontier plays, including a promising unconventional find in an overlooked area of Nevada.

The Houston-based producer hosted a conference call on Thursday to give CEO Chuck Davidson and his management team time to discuss some of the company’s new ventures, including the deep oil potential of the eastern Mediterranean, the Falkland Islands and a promising field in northeastern Nevada.

“Any one” of the new plays offer “material opportunities with running room,” said COO David Stover.

Running room is just what Noble found in Nevada, said Susan Cunningham, who leads the exploration and business innovation unit. The company now has in hand 350,000 gross acres, which hold the potential for 1.3 billion boe of gross resources. The company, which holds all of the working interest in the play, paid only about $200/acre — a steal if the gamble pays off.

“We tend to stay away from ‘hot’ plays because in general it doesn’t match our running room strategy,” Cunningham told investors. That makes the Nevada opportunity perhaps even more attractive: the area is considered the company’s “next growth opportunity in the U.S.”

The development has been in the works since late 2010. “It’s a tight oil play with some scale to it,” Cunningham said. Three “main” areas are leased, with about two-thirds of the leasehold fee-based and the remaining overseen by the Bureau of Land Management. In September the first of three 3-D seismic surveys was launched.

“The success case model is attractive,” said Cunningham. “When we started evaluating it in 2010…we discovered a less documented petroleum system at work.” A “few older wells had been drilled in the ‘younger’ section” of the play, so Noble has undertaken a phased pilot test program to determine its viability.

“This is an area that’s been overlooked and under explored,” she said. “Exploration to date in Nevada has focused primarily on conventional plays…” The area has a “thermal history” that’s “right for oil,” and older wells recovered oil from an “interval of interest where previous activity predicated the unconventional technology revolution.”

However, Noble is clear about the risk, putting only a 55% “geological chance of success” because there are still unknowns about the “reservoir quality, source rock thickness and the extent.”

Why take the risk of just more than a half chance of success? And why Nevada?

“That’s exactly what we asked at the beginning,” said Davidson. “We’ve all had a little bit of experience in Nevada, most of it very disappointing. The focus of our questions was how was this different and why it was overlooked.”

Cunningham noted that “generally, most of the tight oil plays, by far the majority, are in the Paleozoic section in the United States. That’s where most are looking.” Noble dug deeper, she said.

“This was good detective work,” she said of the new play. The company started going through old well data, and “we looked at different areas where there was a high percentage of oil relative to well drilling…We looked at something that looked novel, then our team went out…did all the conventional work, saw some oil, did some field work, drilled a core. It was just good detective work.”

Based on early findings, the geologists have found shale, carbonate and sand, said Cunningham. But what else and how much? “That’s the big unknown. Most of the [previously drilled] wells have been very shallow…We’re going deeper.”

Noble has a solid track record in its exploration efforts, both onshore and offshore. In the last five years the risk resource inventory worldwide has grown by more than 1 billion boe.

In the Nevada play, the depth range is 6,000-12,000 feet, with gross thickness of 1,500-2,000 feet — characteristics similar to the neighboring Uinta Basin, as well as Nevada’s Railroad Valley. The Railroad Valley has drawn a few prospectors, including Cabot Oil & Gas Corp. (see Shale Daily, Dec. 15, 2010).

“Earlier in the year we cut 1,000 feet of core on a portion of the target interval to get an idea of the rock properties,” Cunningham said. The rocks were found to be about 400 feet thick, with “good TOC,” or total organic carbon. “Today we are encourage by the preliminary results, and we’ll have more data in the coming weeks.”

Plans now are to invest $130 million gross to drill eight wells. Noble also wants to finish shooting two 3-D surveys this year and a third one next year. Initial production is slated for late 2014, with peak production now estimated at up to 50,000 b/d.

“The key uncertainty is the variability of the rocks,” said Cunningham.

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