Noble Buys Into Falklands Agreement

The license areas consist of about 10 million acres south and east of the Falkland Islands. London-based Falkland Oil and Gas Ltd will remain operator of the area until early 2013, when the farm-in areas will be transferred to Noble.

Noble Energy Inc. (NYSE: NBL) plans to buy into a farm in agreement for a 35% interest with Falkland Oil and Gas Ltd. in a deal valued between $180 million and $230 million.

Under the terms of the agreement, the license areas consist of about 10 million acres south and east of the Falkland Islands. London-based Falkland Oil and Gas Ltd will remain operator of the area until early 2013, when the farm-in areas will be transferred to Noble.

Noble will contribute $25 million in cash contribution in January 2013, predominantly relating to certain historical costs. In addition, it will contribute 60% of the Scotia well costs, including associated costs incurred during 201 and 60% of the costs of the Southern Area Licenses commitment well. Noble may also pay for 45% costs of a discretionary exploration well, should it elect to participate in the well.

The areas excluded from the agreement will be delinated geographically and stratigraphically and comprise the Loligo complex and the Nimrod-Garrodia complex.

Noble will not participate in certain stratigraphic horizons in these excluded areas and FOGL will retain a 75% interest and operatorship with Edison International S.p.a ("Edison") holding the remaining 25% interest. However, Noble will remain a participant in the excluded areas regarding other horizons.

Noble will also farm-in to the Southern Area Licenses for a 35% interest, with FOGL continuing as operator of these licences until no later than early 2014, when Noble will become the designated operator.

This farm-out brings in another significant industry partner for FOGL whose interests and expertise complement those of Edison. The farm out substantially improves FOGL's financial position. In the event that the Loligo and Scotia exploration wells are drilled within budget, it is estimated that on completion of the wells, Noble's cash balances will not be less than $200 million which will provide it with significant funds for additional exploration work. Given suitable encouragement from the 2012 drilling results, this is likely to include two 3D seismic surveys to be acquired in the Northern and Southern Area licenses commencing in early 2013.

Further exploratory drilling is then anticipated to commence in late 2014 and may include a programme of up to four exploration wells. Tim Bushell, chief executive of FOGL, says, "We have now brought in two highly respected international exploration and production companies and with this strong partnership in place, we have the financial and technical resources to help realize the potential from our large acreage position in the Falkland Islands."

Charles D. Davidson, Noble Energy's Chairman and chief executive, says: “We believe this region is very consistent with our new ventures exploration strategy of entering regions that provide prospects that are not only material in size, but also where initial success can de-risk subsequent opportunities. In this particular case we have already identified numerous oil leads on 2D data with an unrisked gross resource potential exceeding 6 billion barrels of oil. Once completed, this transaction will increase our worldwide leasehold by over 70 percent gross and 40 percent net."

Houston-based Noble Energy is an independent energy company engaged in worldwide oil and gas exploration and production. It has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa.