SOURCE: The Bedford Report

The Bedford Report

March 03, 2011 11:25 ET

Don't Expect Deepwater Permits to Lower Gas Prices

The Bedford Report Provides Analyst Research on Noble Energy & EOG Resources

NEW YORK, NY--(Marketwire - March 3, 2011) - With crude prices continuing their monumental surge, the Obama administration finally approved the first deep-water drilling permit since last spring's devastating Deepwater Horizon oil spill. The US Government has faced intense criticism, as well as legal action, over the slow pace of permitting since the BP accident. The news caused noticeable share price gains for many independent oil producers, as investors are optimistic more deep water permits will be on the way. The Bedford Report examines the outlook for companies in the Independent Oil and Gas Industry and provides research reports on Noble Energy, Inc. (NYSE: NBL) and EOG Resources, Inc. (NYSE: EOG). Access to the full company reports can be found at:

Noble Energy was the recipient of the government's first deepwater drilling permit since last year's spill. The permit is for a well located in 6,500 feet of water about 70 miles southeast of Venice, La. Noble has contracted to use Helix Energy's capping stack to stop the flow of oil in the event of a well control event.

In February, a federal judge gave the US Interior department one month to decide whether to approve five other pending permits to drill in the deep waters of the Gulf of Mexico. Although Interior Secretary Ken Salazar argues that the judge's ruling obstructs on his administrative authority, Salazar says the interior department plans to comply with this order.

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"There are other deepwater permits that are pending and the ones that will go out the door will hopefully be the templates that will allow us to move forward with an additional, significant number of deepwater permits," explains Salazar.

With retail gas prices skyrocketing more than 20 cents a gallon in the last week, the Obama Administration had been under intense pressure to once again approve deepwater drilling in the Gulf. Energy Secretary Steven Chu was quick to dismiss the notion that expanding offshore oil exploration would lower oil prices. Chu explains that it would take five to 10 years to find, drill and bring the oil to the market.

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