Deutsche Bank Maintains Buy on Noble Energy after Cyprus A-1 Success

Deutsche Bank has published a research report on Noble Energy

after the company announced the success of the Cyprus A-1. In the report, Deutsche Bank writes, "The details of the discovery are in-line with our ~$9/shr pre-drill NAV assigned to the prospect. While additional resource in the Levant Basin is a positive (5 successful discoveries account for 33 Tcf of resource) the discovery broadens the basin (outside of Israeli waters) and provides optionality to project development plans and gas export potential, with important value implications for previously discovered resource. NBL announced the success of its first exploration well targeting natural gas offshore Cyprus. An extension of the successful discoveries made in Israeli waters, the well was drilled to 19k+ ft (vs. 16k+ for initial discovery wells at Tamar and Leviathan respectively) in comparable water depths of 5,500 ft. The well encountered 310 ft of net natural gas pay, and the evaluation led to a narrowing of the gross resource range to 5 to 8 Tcf (P75-P25) vs. a pre-drill estimate of 3 to 9 Tcf, and a Pmean of 7 Tcf." Deutsche Bank maintains its Buy rating and $120 price target on Noble Energy, which is currently trading down $1.23 from yesterday's $95.64 closing price.