Noble Energy Inc. on Tuesday reported an oil discovery at a deepwater well in the Gulf of Mexico that was the first such drilling project to receive a permit after the government lifted a post-BP spill drilling moratorium.
The company said it found oil deposits 60 feet thick when it drilled to a depth of about 18,920 feet, from a well located in 6,500 feet of water, about 70 miles southeast of Venice, La.
Chairman and CEO Charles Davidson said results at Noble's Santiago well "were very consistent with our pre-drill expectations."
The project was the first to receive a deepwater drilling permit in the Gulf of Mexico after the Deepwater Horizon oil rig exploded on April 20, 2010.
Houston-based Noble had begun drilling the Santiago well four days before the explosion, which resulted in the worst offshore oil spill in U.S. history and raised questions about the safety of deepwater drilling. The Santiago well was put on hold after the government temporarily halted exploration in waters deeper than 500 feet.
The moratorium was lifted in October. On Feb. 28, the government announced the Santiago well was the first to receive a post-moratorium permit. Regulators came under pressure from the oil industry and some lawmakers to get drilling projects started again in the Gulf while ensuring that new safeguards were in place.
Noble operates Santiago well, and has a 23.25 percent ownership stake. The biggest stake, at 46.5 percent, is owned by a unit of BP, the company at the center of the Deepwater Horizon disaster. Other interests are held by Red Willow Offshore LLC (20.25 percent), and Houston Energy LP (10 percent).
Santiago is the third oil discovery in Noble's Galapagos project in the Gulf of Mexico, including prior successes at Santa Cruz and Isabela. Noble expects all three wells will be online early next year. The company estimates the three discoveries contain 130 million barrels of oil.
Noble now estimates the Galapagos project will increase its net oil production by more than 10,000 barrels per day, and deliver "significant near-production and cash flow for our business," Davidson said.