Noble In Talks to Offload 7.5% of Tamar Field

Noble Energy is in talks with Tamar Petroleum to sell 7.5% of the shares in the Tamar gas field, offshore Israel, Tamar Petroleum said in a filing to the Tel Aviv Stock Exchange (TASE).

Tamar Petroleum is a special purpose venture created by Delek Group, in order to offload its shares in Tamar project. In its first transaction, Tamar Petroleum bought 9.25% of Tamar project from Delek Drilling. The SPV raised about $600mn in bonds and $200mn through IPO. But lack in demand during the initial public offering, particularly from foreign investors, obliged Delek Group to remain 40% owner of the Tamar Petroleum. Delek Drilling CEO Yossi Abu remains Tamar Petroleum's chairman.

If the transaction goes through it will be financed by a mix of selling bonds to Israeli institutional investors and issue of new Tamar petroleum shares to Noble Energy.

The rationale for the deal, said one source, is to increase Tamar Petroleum's share in Tamar project in order the company's value and share trade volume will increase and the shares will join TASE indices. Since its IPO last July, Tamar Petroleum shares have lost about 10% of their value.

In various filings and analysts conferences, Noble Energy said during 2017 that it is going to reduce its holding in Tamar to 25%. However so far no foreign investor was found willing to buy those shares, and Noble Energy is now trying to come back to the Israeli financial market through Tamar Petroleum. In 2016 Noble sold 3.5% of Tamar Project to Everest, controlled by one of Israel's biggest institutional investors Harel Insurance Group, for $431mn. Noble said that its proceeds  from the sale would finance its investment in the Leviathan development.

Analysts in Tel Aviv estimated that raising the money in bonds this time will not be as easy as it was in the past.