Noble Energy has been engaged in crude oil and natural gas exploration, exploitation and development activities throughout the onshore US since 1932 and in the Gulf of Mexico since 1968. The Company’s onshore U.S. portfolio at December 31, 2007 included 1,308,823 gross developed acres and 1,234,858 gross undeveloped acres with an additional interest in 97 offshore blocks in the Gulf of Mexico. Total United States production in 2007 averaged 111,000 barrels of oil equivalent per day.
The Company’s onshore U.S. programs provide steady, predictable growth from a very large inventory of low-risk development projects, combined with several emerging exploration opportunities. The offshore deepwater Gulf of Mexico program is driven by an exploration inventory of higher risk, significant prospect opportunities, focused on medium-term growth for the Company.
Noble Energy’s United States operations are divided into Northern and Southern regions
Northern Region
The Northern region consists of operations in the Rocky Mountain area, which includes the D-J (Wattenberg and Tri-State), Piceance, San Juan, Wind River basins, as well as the Bowdoin and Siberia Ridge fields. Also included in the Northern region are various Mid-continent assets in the Texas Panhandle and parts of Oklahoma and Kansas. The Northern region is highlighted by a very large inventory of low-risk, high-return development projects, as well as significant new emerging resource potential.
Some of the key assets of the Company’s Northern Region are:
Wattenberg Field— The Wattenberg field (approximately 97 percent operated working interest), Noble Energy’s largest domestic asset, continues to grow production and reserves. In 2007, sales from this field averaged approximately 240 million cubic feet equivalent per day.
The Company acquired working interests in the Wattenberg field through the Patina Merger in 2005 and the acquisition of U.S. Exploration in 2006. In addition, the Company has added 7,000 additional acres in early 2008. Located in the D-J basin of north central Colorado, the Wattenberg field provides Noble Energy with a substantial future project inventory, with multiple productive formations. In 2008, plans are to execute 1,250 projects, approximately half represent new drills and the remaining half is refracs, trifracs, and recompletes, with a primary focus on continued enhancements in drilling and completion procedures.
Piceance Basin— The Piceance basin in western Colorado (approximately 96 percent operated working interest) is another rapidly growing area for Noble Energy. During 2007, the Company added 10,500 net acres, increasing its position to nearly 19,000 net acres. Operational plans are to drill over 100 wells during 2008, with an estimated exit rate for production of approximately 60 million cubic feet per day, net. Efficiencies in drilling continue to evolve in the play, and the Company has begun utilizing ‘Fit For Purpose’ rigs in the basin that are capable of drilling up to 18 wells per pad, with simultaneous drilling and completion activities.
Tri-State Trend— The Tri-State trend (approximately 87 percent operated working interest) is located in eastern Colorado and extends into Kansas and Nebraska. It is primarily a shallow Niobrara gas play with low-cost, low-risk,
high-return drilling opportunities. Noble Energy’s current acreage position totals near 600,000 net acres with plan to drill 300 wells in 2008, utilizing 3D seismic to pinpoint the locations.
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Southern Region
Noble Energy’s Southern region includes the deepwater Gulf of Mexico, East Texas, Louisiana, onshore Gulf Coast, and the New Albany Shale in Indiana. The Southern Region is highlighted by several emerging onshore resources plays with a sizeable inventory of significant exploration prospects in the deepwater Gulf of Mexico.
Some of the key assets of the Company’s Southern Region are:
Deepwater Gulf of Mexico— Subsequent to the 2008 Central Gulf of Mexico lease sale, the Company had an interest in 104 awarded and/or pending blocks, primarily focused in the Green Canyon and Mississippi Canyon areas. Production volumes in 2007 averaged just under 25,000 barrels of oil equivalent per day.
During 2007, Noble Energy continued to focus on the growth of its deepwater Gulf of Mexico business highlighted by a successful exploration discovery at Isabela and a successful sidetrack-appraisal well at the 2006 Raton discovery. In addition, the Company also completed successful development projects at its Ticonderoga, Swordfish, and Lost Ark fields, which added some substantial production volumes in the latter part of the year and into 2008.
Operations include an active exploration program in the deepwater Gulf of Mexico, where the Company plans to drill at least 3 exploration prospects in 2008, with long-term plans to drill an average of 2-4 each year. An expanded inventory of prospects and leads in the deepwater Gulf of Mexico, focused on significant Miocene-aged plays, has positioned Noble Energy to continue an active program for many years to come.
East Texas and North Louisiana — Noble Energy’s acreage position in the East Texas/North Louisiana area has recently expanded to nearly 20,000 net acres. In 2008, the Company plans to drill approximately 35 wells primarily focused on the James Lime, Travis Peak, and Cotton Valley horizons, with future potential in the Haynesville play.
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