The Oil Industry's Other Dead Sea

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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 spinoff of 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.