Sale values Tamar at $10.7 billion
Noble Energy announced the sale of part of its interest in the Tamar field yesterday. It is the company’s second Tamar divestment. Tamar is located in the Mediterranean Sea, east of the Leviathan field, offshore Israel.
Noble will sell a 7.5% interest in the field to Tamar Petroleum (ticker: TMRP) for $560 million in cash and 38.5 million shares of TMRP. Based on Tamar Petroleum’s closing price yesterday, the overall transaction has a value of $800 million. Noble expects to divest these shares over the next few years, and use the proceeds to support Leviathan development.
This is the second sell-down of Noble’s Tamar interest, as the company also divested 3% of the field to the Harel Group in July 2016. That sale provided Noble with $369 million in cash.
$10.7 billion value indicated for Tamar
These sales show the valuation of Tamar dropped over the past two years, as the most recent sale values the field at $10.7 billion, compared to $12.3 billion in mid-2016. However, this could also simply mean Noble got a good deal in 2016, as at the time UBS valued the field at $10.1 billion.
These divestments have been mandated by Israel’s Natural Gas Regulatory Framework, which required Noble to sell 11% of its interest in Tamar. Post-sale, Noble will hold a 25% working interest in the field and will remain the operator.
Sale will fund 53% of Leviathan development
Tamar was the first major offshore gas field discovered in Israel, and is currently producing about 1 Bcf/d gross. Discovered in 2009, Tamar currently supplies around half of all Israeli gas demand singlehandedly. The field is not the only offshore gas field in the area, though, and subsequent drilling revealed the Leviathan field in 2011, the Tanin field in 2012, the Karish field in 2013 and the Daniel field in 2016.

Leviathan expected to add 3.3 Tcf net to Noble’s proved reserves; first gas sales expected late 2019
Noble is currently developing the Leviathan field, which will involve drilling four wells, each of which will be capable of flowing more than 300 MMcf/d. Noble expects that this production rate can be sustained for an extended period, with a 25-year lifetime expected for each well. This development is expected to significantly grow Noble’s proved reserves by adding 3.3 Tcf net.
This first phase of development is expected to cost $3.75 billion, of which Noble will contribute $1.5 billion. This sale, then, will be enough to fund about 53% of Noble’s Leviathan obligations.
David L. Stover, Noble Energy’s Chairman, President and CEO, commented, “This transaction supports our commitment to sell down our Tamar interest in accordance with the government of Israel’s Natural Gas Regulatory Framework.
“It highlights the strong value of our world-class Levant Basin assets, while providing additional upside exposure from our equity interest in Tamar Petroleum. These assets are some of the world’s most attractive energy investment opportunities, with margins competitive to the best U.S. onshore oil plays and a stable, long-term cash flow profile. Our team is doing an excellent job operating Tamar reliably at capacity while developing Leviathan which is on track to deliver first gas sales by the end of 2019.”