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| David Stover, CEO & COO Noble Energy Inc. |
Nov 23, 2015, 2:18pm CST
by Suzanne Edwards Reporter, Houston Business Journal
Houston's Noble Energy Inc. (NYSE: NBL) advanced its march toward developing and expanding massive gas fields off the coast of Israel, known as Leviathan and Tamar, despite having faced regulatory pushback from Israel's antitrust regulators.
The independent oil and gas exploration and production company on Nov. 23 announced the sale of its 47 percent stake in the Alon A and Alon C licenses for offshore Israel, which include the Tanin and Karish fields.
David Stover is the president, CEO and COO of Houston-based Noble Energy Inc. (NYSE: NBL), which has reached a new benchmark in its quest to develop a massive gas field off the coast of Israel.
Selling the Tanin and Karish fields was one of the requirements stipulated in the framework agreement that Israeli officials approved in September, which, once honored in full, will pave the way for Noble's development and operation of the Leviathan project.
"The sale of these assets is an important step in realizing the government of Israel’s goal to bring in a new operator to develop these natural gas fields, which will compete for sales with Tamar and Leviathan," Noble Energy said in comments emailed to the Houston Business Journal. "Tamar and Leviathan are, and will remain, operated by Noble Energy."
Noble came close to selling its stakes in Leviathan before canceling the nearly $1 billion sale to Australia's Woodside Petroleum Ltd. (ASX: WPL) in May.
Noble sold its stakes in the Alon A and Alon C licenses to Israel-based Delek Group Ltd. for a deal valued at $73 million. That's slightly less than the $78 million the company had reportedly invested in Tanin and Karish as of Sept. 30, according to its third-quarter earnings report. The deal also accomplishes transferring the responsibility of selling the Tanin and Karish fields squarely to Delek Group, which the company sees as expediting the process of meeting the framework agreement requirements, said Noble.
Tanin and Karish must be sold to a third party as per the framework agreement. The still-remaining elements of the agreement include Noble downsizing its stake in the Tamar gas field to 25 percent. As of February, the company stake in Tamar was 36 percent.
More imminent is Noble's meeting the requirement that it consult with Israel's Knesset Economic Committee, which the company said in its emailed comments would be completed in the coming weeks.
Once Leviathan comes online, the framework agreement also stipulates that the prices at which Noble sells the gas it yields must be capped for domestic customers, the Times of Israel reported.
"With a framework in place, Noble Energy can move forward with reconvening project and execution teams, completing negotiation of gas sales contracts to regional customers that have been waiting for clarity on Noble Energy’s ability to deliver natural gas in a timely manner, and securing the external financing necessary to enable a final investment decision," Noble said in its emailed comments. "With the framework in place now, Noble Energy anticipates making (final investment decisions) by the end of 2016."
"It will take approximately three and one-half to four years from FID for construction and field development before first production commences from Leviathan," Noble went on to say.
The announcement of the sale was accompanied by the announcement of Noble inking a farm-out agreement with BG International Ltd., a subsidiary of London-based BG Group PLC. Under the terms of the farm-out agreement, BG will acquire a 35 percent stake in the Block 12, which includes the Aphrodite natural gas discovery, off the coast of Cyprus for a total cash consideration of $165 million. Noble Energy will continue to operate Block 12 with a 35 percent stake, according to a statement the company released announcing the agreement.
Suzanne Edwards covers energy for the Houston Business Journal. Follow her on Twitter for more.
Source: http://www.bizjournals.com/houston/blog/drilling-down/2015/11/noble-energy-deal-moves-company-closer-to-israel.html
