Noble Energy Jumps On 1.5 Billion Barrel Estimate At Leviathan Field

Michael Teague  |

Shares for Noble Energy (NBL) , the $23.4 billion dollar independent oil and gas company, jumped 2.5 percent during trading on Thursday to $65.47, on news that the recently discovered Leviathan gas field off of the coast of Israel could contain as much as 1.5 billion barrels of oil.

Noble has already had a very good year. With Thursday’s jump, the company has seen shares up 26 percent in 2013, and 52 percent over the past 12 months, making it one of the top performing independent oil and gas stocks of the last year. In terms of its concerns in the Middle East, the company has a 36 percent stake in the Tamar gas field off the Israeli coast, which just started pumping to the mainland in early April.

While the Tamar gas field is estimated to be sitting on some 10 trillion cubic feet of natural gas, the Leviathan field was previously estimated to sit on 16 trillion cubic feet of natural gas, as well as 600 million barrels of oil. Thursday’s news revises that estimate to more than double the original amount for oil, and ups the forecast for natural gas to some 19 trillion cubic feet.

This is good news for Noble Energy, who holds a nearly 40 percent stake in the Leviathan field, with the rest under the control of local oil firms Delek Drilling, Avner Oil, and Ratio Oil Exploration. Furthermore, the Leviathan and Tamar fields are only two of the larger discoveries of oil and natural gas deposits off the coast of the Eastern Mediterranean country. Over the past 15 years, technological improvements have led to a number of substantial discoveries of offshore energy reserves. Indeed, the oil and gas at Leviathan is being drilled at a depth of 4 miles under the seabed.

Furthermore, oil exploration companies both foreign and domestic are seeking new discoveries in the area. But what has already been found in terms of the Leviathan field alone could easily meet the country’s domestic energy needs for years into the future, with plenty left over for export to countries such as Turkey, Cyprus, and Jordan. Until the Tamar field went online a few months ago, Israel was importing the vast majority of its oil at an annual cost of about $10 billion dollars.

The Leviathan field is about twice the size of the Tamar field, and Noble expects to have a well drilling there by the end of the current year. Even before the unrest in the region over the last three or so years, energy independence has been considered a key security priority by the country's political establishment, and especially its military. Many prominent former military and intelligence officials currently serve in some capacity in Israel's oil companies, including the former head of the army itself Gabi Ashkenazi, who is now board chairman at Shemen Oil and Gas Resources Ltd., and Meir Dagan, the former head of the Mossad, is the chairman of the exploration company Gulliver Energy Ltd.

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