Before the push by
Chevron (NYSE: CVX),
Anadarko Petroleum , and other intrepid
explorers into its deeper waters, the Gulf of Mexico was
known in the industry as the Dead Sea. The majors were
packing up and leaving the picked-over basin for more
promising frontier regions overseas.
Despite some fearless deep-shelf drilling by the likes of
McMoRan Exploration (NYSE: MMR), the
shallower waters of the Gulf continue to attract limited
industry interest. That's one reason I've recommended that
Fools
avoid the recent spinoffof
Seahawk Drilling (Nasdaq: HAWK) by
deepwater-focused
Pride International (NYSE: PDE).
As it happens, there's an analogue to our Dead Sea taking
shape over in Europe.
The North Sea is shared by the U.K., Norway, and the
Netherlands. And, as in the Gulf of Mexico in the 1990s,
operators are shedding legacy assets at a pretty brisk pace.
An early wave of selling by the likes of
BHP Billiton ,
Talisman Energy , and
Hess (NYSE: HES) followed a tax hike on the
U.K. side in late 2005. More recently, folks like
Sumitomo and
Eni have been looking to offload
properties.
Well, we can now add one more to the list.
Noble Energy (NYSE: NBL) is putting its
European arm on the auction block. This includes a stake in
four North Sea oilfields. With a focus on exploration in the
deepwater basins of the U.S. and West Africa, not to mention
an exciting play
offshore Israel, the North Sea is decidedly non-core for
Noble. The sale will free up several hundred million dollars'
worth of exploratory dry powder.
Of course, for every seller, there has to be a buyer, so
someone has to see value in this "been there, done that"
basin. I would expect interest to be split among distributors
like
E.ON and smaller independents like
ATP Oil & Gas (Nasdaq: ATPG), which have
a knack for picking up assets that
fall through the cracks.
This article was originally published as
The Oil Industry's Other Dead Seaon
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