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Noble Selling Non-Core Assets


Noble is cleaning out the closet, so to speak.  The company is divesting non-core assets and applying more focus to concentrate on its core properties.  An announcement today marked the third property divestiture this quarter, and completes the first phase of the onshore non-core divestment plan, according to Noble Energy’s President and COO, David Stover.  “The next phase of our non-core divestment program, continuing into 2013, involves small asset packages in the Mid-continent, Gulf Coast, San Juan, and Ark-La-Tex areas and our remaining assets in the North Sea.”  However, this latest onshore divestiture went to an affiliate of Citation Oil & Gas Corporation.  The $140 million deal includes about 14,000 net acres and 250 producing wells in Kansas.  The transaction has an effective date of April 1, 2012 and is expected to close sometime in September this year.  As of the effective date, net production was around 1,000 boed, with net proved reserves being about 7 million boe.  Nearly all production is crude oil.

Unfortunately, the announcement does not specify which wells, the producing reservoirs, or the locations of their leases.  So, with a quick search in Drilling Info, I decided to dig a little deeper and take a look at the inventory Noble has in Kansas and the targeted formations of their producing wells.

Looking at Noble’s inventory of wells in Kansas…..roughly 750 had last reported production values within the past year and a half.  Therefore, selling 250 wells is only about a third of Noble’s wells in Kansas.  I should also mention that all wells shown are vertical.  Primary producing reservoirs include the Arbuckle Group, Council Grove Group, Mississippian System, and the Niobrara.  Most of these formations are carbonate reservoirs with some sub-member shales serving as source rocks.  It’s too speculative to say how Citation will develop these properties.  However, this deal will give the company more exposure to the Mississippi Lime that is emerging to be an economical play being explored with unconventional drilling methods, with excellent results.   It could be interesting to keep an eye on Citations’ Kansas permitting over the next few months and see if they plan to drill horizontals to develop the Mississppian System.

Last month, Noble sold about 900 producing wells on approximately 84,000 net acres in the Texas Panhandle and western Oklahoma.  The $617 million transaction went to a wholly owned subsidiary of Unit Corporation with nearly 60 MMcfed and net proved reserves of 250 Bcfe.

Also in July, Noble agreed to sell certain oil and natural gas properties to in the Permian Basin to Sheridan Holding Company II, LLC for $320 million.  The transaction included 250 producing wells on 11,000 net acres with production averaging just over 1,500 boed, and 90% crude oil and NGLs.

Noble’s primary onshore core areas are in the DJ Basin and the Marcellus and with these non-core divestitures it will give Noble over a billion dollars.  This is only onshore deals to boot.   You can check out more on Noble Energy by visiting either the Niobrara or Marcellus Operators Folder in Drillinginfo’s DNA section.

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