Noble Energy announced that it has signed a definitive agreement to divest a 3% working interest in the Tamar field, offshore Israel, to the Harel Group, a leading insurance provider and pension manager in Israel, in partnership with Israel Infrastructure Fund (IIF), Israel’s largest infrastructure private equity fund. The transaction value of $369 million is based on 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.
“This transaction reflects the inherent value of our producing Tamar asset, which reliably fuels more than half of Israel’s electricity generation today,” Gary W. Willingham, Executive Vice President of Operations of Noble Energy, said. “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. 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 Noble Energy’s overall 2016 capital program.
Prior to the announced working interest sale, Noble Energy operated the Tamar field with a 36% working interest. Noble Energy 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% to 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 trillion cu ft (Tcf). The Tamar field sold 252 million cu ft per day, 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.