Noble Plans Sale of 10% Stake in Leviathan

Proceeds would help Texas company raise badly needed cash to develop giant gas field.

Israeli gas platforms controlled by U.S.-Israeli energy group Noble and Delek. June 25, 2015
Israeli gas platforms controlled by U.S.-Israeli energy group Noble and Delek 15 miles west of Ashdod in the Mediterranean Sea. June 25, 2015. Reuters

After selling stakes in the Tamar gas field as well as its holding in the tiny Tanin and Karish fields for a combined $438 million over the past year, Texas-based Nobel Energy is now gearing up to sell part of its stake in the giant Leviathan reserve.

In a presentation to investors over the weekend, the company said it was looking to sell a 10% stake in Leviathan, whose 622 billion cubic meters of estimated reserves make it by far Israel’s biggest field. Nobel now holds a 39.7% stake, making it the second-largest partner after Israel’s Avner and Delek Drilling, both units of Delek Group, which each have 22.7%. Ratio Oil holds the remaining 15%.

Under the gas framework agreement, Nobel is under no obligation to reduce its Leviathan stake, but the firm needs to raise cash is now free to do so.

Analysts value Leviathan at $5.5 billion to $6 billion; developing the field will cost about $5 billion to bring into production. Thus, Nobel, which lost $144 million in the third quarter and $315 million in the second amid depressed global energy prices, could raise $600 million or more selling the stake.

Nobel said it also plans to sell another 7.5% of Tamar, following the sale of 3% of the field to the Harel group and the Israel Infrastructure Fund last July for $369 million with an option for them to buy another 1%. Noble now controls 36% of the field but must reduce its stake to 25% under the framework terms by 2022.