Israeli Tamar Raises Cash for Offshore

Tamar Petroleum completed March 8 the institutional stage of the issue of Bond B, which will be used to finance the acquisition of 7.5% of the Tamar reservoir from US producer and the field operator Noble Energy.

Noble Energy will be left with 25%, while Tamar Petroleum's share will grow to 16.75%. Tamar sold NIS 1.9bn ($560mn) worth of Bond B, with the interest rate set at 6.1% – much higher than in previous bond issues – and are expected to be trading by the middle of the month. When news of the planned sale circulated last December, analysts said it might prove tricky unless the terms were made attractive.

As part of the $800mn transaction Noble Energy was allocated of 38.5mn shares of Tamar Petroleum, which is 43.5% of the company's shares after the issue. However Noble Energy will not have influence on Tamar Petroleum's direction: it will not be entitled to nominate directors to the company and has forfeited its voting rights. In the first period following the transaction completion, Noble will not be allowed to sell its shares. However in two years' time it will be allowed to sell all of them.

Tamar Petroleum, which began trading on the stock exchange in Israel in July last year, is an independent oil and gas company without a controlling interest, which began its acquisition of 9.25% of the Tamar reservoir with Delek Drilling's share. The chairman of Tamar Drilling is Yossi Abu, who is also the CEO of Delek Drilling.