Noble Energy declared a discovery at the Santiago exploration prospect in the deepwater Gulf of Mexico. The well, located in 6,500 feet of water on Mississippi Canyon Block 519, was drilled to a total depth of approximately 18,920 feet. Open-hole logging identified approximately 60 feet of oil pay in a high-quality Miocene reservoir. Noble Energy is the operator at Santiago with a 23.25 percent working interest.

Santiago is the third discovery in the Company's Galapagos project, in addition to the prior successes at Santa Cruz and Isabela. Total gross resources discovered in the larger Galapagos project, including the Santiago well, are estimated by Noble Energy to be 130 million barrels of oil equivalent. Approximately 75 percent of the discovered resources are oil.

Charles D. Davidson, Noble Energy's Chairman and CEO, said, "The discovery at Santiago is a great way to resume our drilling program in the deepwater Gulf of Mexico. The well results were very consistent with our pre-drill expectations, and our teams did an outstanding job in the midst of a changing operating environment. We expect all three wells at Galapagos to be online in early 2012, and we are increasing the project's total net production impact to Noble Energy to over ten thousand barrels of oil per day. This major project will deliver significant near-term production and cash flow for our business."

In late February 2011, the Company received the industry's first drilling permit after the deepwater Gulf of Mexico moratorium for the Santiago prospect, where drilling was suspended in June 2010. Drilling operations resumed in early April 2011 following multiple reviews of operating and response plans, as well as third-party certifications of well designs and equipment.

Utilizing the Ensco 8501 drilling rig, the Company will immediately proceed with completion operations at Santiago. Those operations are expected to last approximately two months, after which the Company is planning to return to drilling the Deep Blue prospect (Green Canyon 723). Following Deep Blue, the Company is planning to spud an appraisal well at the Gunflint discovery (Mississippi Canyon 948).

Other interest owners in the Santiago discovery are Houston Energy, L.P. with 10 percent, Red Willow Offshore, LLC with 20.25 percent, and BP Exploration & Production Inc., a wholly-owned subsidiary of BP America Inc. with the remaining 46.5 percent.

Tags: Noble Energy