Woodside Picks Up Stake in Leviathan Gas Field

Woodside has reached an agreement to acquire at 30% stake in the Leviathan gas field off the shore of Israel. The transaction will involve an upfront payment of $696 million. The field is estimated to contain about 17 trillion cubic feet of recoverable natural gas.

The deal will allow Woodside to participate in further exploration opportunities in the Leviathan licences. The Australian firm will be the operator of any LNG development of the field. The Leviathan Joint Venture participants are Noble Energy Mediterranean Ltd., Delek Drilling LP, Avner Oil Exploration LP and Ratio Oil Exploration.

Apart from the initial payment of $696 million, Woodside has offered the a payment of $200 million once laws permitting LNG export from Israel are in force, a payment of $350 million on a final investment decision in relation to an LNG development, potential annual LNG revenue sharing payments equal to 11.5% of Woodside’s incremental revenue above an agreed escalating price threshold, over the life of the project (capped at $1 billion) and expenditure up to US$50 million in relation to costs associated with the drilling of a deep oil exploration well targeted for late 2013.

“Acquiring an interest in these permits is an exciting opportunity to grow our portfolio in the emerging Eastern Mediterranean basin and we look forward to finalising the agreement,” Woodside CEO Peter Coleman said.