Noble Looking To Sell Up To 15% of Leviathan: Report
US independent Noble Energy is seeking to divest of up to 15% in Leviathan gas field offshore Israel, according to Calcalist, an Israeli daily business newspaper.
Noble has a 40% stake in the 620bn m3 gas field. The rest is held by Israeli firms Delek Group (45%) and Ratio (15%). Last week it was reported that Noble was considering selling off 11% in Tamar gas field in which the company has a 36% shareholding. In both cases the backdrop to the selloff is Noble's need for cash. However, there are quite a few differences between the two cases.
Tamar is already a producing gas with a healthy revenue stream and cash flows, due to the lucrative contract between Tamar Partnership and its anchor customer, Israel Electric Corp. (IEC), Israel's biggest electricity producer, and other Israeli customers. Noble is also committed to reducing its stake in Tamar to 25% in six years' time, according to the natural gas regulatory framework.
Leviathan on the other hand is only in its initial development stage and it's unclear when the Final Investment Decision (FID) will be taken. The FID is dependent upon signing long term contracts with anchor customers and arranging financing and guarantees for lenders as well as negotiating bilateral agreements between Israel and the potential export countries. All those are quite complex activities in the present economic climate and the uncertain legal and geopolitical situation characterising the East Med.
Leviathan in its current undeveloped state was estimated to be worth up to $5bn. Last year Noble sold 50% of its stake in Aphrodite offshore Cyprus and all of its holding in Karish and Tanin gas fields offshore Israel, all of them yet to be developed, for about 10% of their valuation just a few months earlier in order to bring much needed cash into its coffers. That may be also the case with Leviathan, whose short and mid-term future is hanging in the balance. According to the reports the sales' proceeds should be funneled Leviathan development.
Ya'acov Zalel