Noble Energy entered into a US$369 million definitive agreement with the Harel Group and Israel Infrastructure Fund (IIF) to offload 3% working interest in the Tamar field, offshore Israel.
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Image of the Tamar platform, from Delek Group. |
Harel, a leading insurance provider and pension manager in Israel, in partnership with Israel Infrastructure Fund (IIF), Israel's largest infrastructure private equity fund, have an option to buy an additional 1%.
The transaction value of $369 million is based upon a gross pre-tax Tamar valuation of approximately $12 billion and is subject to purchase price adjustments between 1 January 2016 and the closing date.
Closing for the transaction is anticipated in Q3 2016, subject to customary terms and conditions, with after-tax proceeds received expected to be approximately $275 million. Under terms of the agreement, Harel and IIF have the option to elect, before closing, to purchase an additional 1% working interest from Noble Energy at the same valuation.
Prior to the announced working interest sale, Noble Energy operated the Tamar field with a 36% working interest. The company is carrying out an 11% sell-down of its interest in the Tamar field in accordance with Israel's approved Natural Gas Regulatory Framework. Noble Energy anticipates the sale of the remaining 7-8% working interest over the next 36 months. Following completion of this sell-down process, Noble Energy will retain a 25% working interest and operatorship in the Tamar field, which has recoverable gross mean natural gas resources of 10 Tcf.
"This transaction reflects the inherent value of our producing Tamar asset, which reliably fuels more than half of Israel's electricity generation today. It also highlights the potential of our other undeveloped Levant Basin discoveries, which share similar reservoir and well deliverability characteristics and are poised to bring needed energy to a region which is fundamentally short natural gas,” Gary W. Willingham, Noble executive vice president of operations said. “We are excited about partnering with Harel and IIF, which bring additional leading Israeli investors into the project. These proceeds further bolster our balance sheet in the near-term and will contribute to our upcoming capital investments in Israel, including our initial investment in the Leviathan project."
Noble Energy and partners are planning to drill and complete an additional development well at the Tamar field in response to the continued increasing demand and outlook for natural gas usage within Israel, as Israel displaces coal for clean-burning natural gas. Drilling is anticipated to commence in Q4 2016. The additional producing well will further enhance redundancy while meeting maximum deliverability for extended peak demand periods. There is no material change to the company's overall 2016 capital program.
The Tamar field sold 252 MMcf/d, net, of natural gas and generated net pre-tax income of $318 million for Noble Energy in 2015.
Noble Energy also operates the Leviathan field, offshore Israel, with a 39.66% working interest and the Aphrodite field, offshore Cyprus, with a 35% working interest.
The Leviathan field has an estimated 22 Tcf of recoverable gross natural gas resources, while Aphrodite holds an estimated 4 Tcf of recoverable gross natural gas resources.
Last month, Noble and its Leviathan partners received approval to move forward with the development of Leviathan, in addition to inking a US$2.5 billion deal to supply up to 473 Bcf from the highly anticipated project.
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