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Sometimes when I look back in time to 2003 it doesn't seem like all that long ago. Today however I was looking back at some comments that were made by then Chairman of the Federal Reserve Alan Greenspan:

"Today's tight natural gas markets have been a long time in coming, and distant futures prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon"

It is very hard to imagine that it was only 9 years ago that when it came to natural gas our leaders' primary concern was that we were about to run out of it.

Now in the United States we have an abundance of natural gas, so much so that many of our leaders believe that the country can free itself from foreign oil dependence by transitioning to the cleaner fuel.

Abundance is now the state of the natural gas market in North America, but because natural gas is difficult to transport, this abundance (and depressed price) is a regional phenomenon. The rest of the world have not had an Unconventional Revolution like we have in North America and are still paying natural gas prices that are multiples of the North American prices.

Because of the state of the natural gas market in North America I think investors have not given enough credit to Noble Energy (NYSE:NBL) which made a spectacular discovery of natural gas offshore Israel in 2010.

The field that Noble discovered natural gas in is called Leviathan, and Noble discovered a lot of natural gas. Leviathan has an estimated 17 trillion cubic feet of natural gas, of which Noble owns 40%.

Leviathan is so large that it will impact the entire country of Israel, making the country a net exporter of natural gas. Unlike the shale gas being produced in North America which is currently landlocked because of the lack of LNG export terminals, gas from Leviathan is very close to the natural-gas-hungry European market where many countries have been relying on gas from Russia.

The Leviathan discovery has some other companies pretty excited as they own interests in nearby blocks. And unlike Noble companies like IPC Oil and Gas Holdings do not have multi-billion dollar market capitalizations and a large discovery could make for a step change in valuation for shareholders.

But the drilling for Noble on Leviathan is not done. There could be more to the story. Leviathan could also hold significant oil reserves.

Noble's Senior Vice President recently made comments about a well that had to be suspended because of high pressure and mechanical limits of the well-bore design:

"Although the well did not reach the planned objective, we are encouraged by the possibility of an active thermogenic petroleum system at greater depths within this basin. We will integrate the data from the Leviathan deep well into our model to update our analysis and design a drilling plan specifically to test the deep oil concept. Part of the plan will be to secure a rig with the capabilities necessary to reach the target objective.Based on the information received to date, we continue to believe there is potential for significant oil resources in this prospect and the basin."

It is hard to imagine that discovery of 17 trillion cubic feet of natural gas could get better, but if significant oil reserves are also discovered that is exactly what is going to happen.

The next license offshore Israel to be tested is "Myra" which according to partial owner of the lease IPC Oil and Gas Holdings could hold up to 12 trillion cubic feet of natural gas. Myra will test both a natural gas and oil structure.

Source: Noble's Massive Discovery Offshore Israel May Get Significantly Better