Delek Group increases stake in Noble Energy

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Aug. 9 -- Israel's Delek Group will pay a second $140 million for an additional 1% stake in Noble Energy Inc., bringing its total share in the Houston-based firm to 4%.

The decision by Delek's directors follows a similar purchase last month of 1% of Noble, also at $140 million. Last August, the energy and infrastructure group announced plans to spend $218 million for its initial 2% of Noble Energy, at the time one of its main partners in drilling for natural gas off Israel.

Delek said it planned to purchase the shares in Noble incrementally and according to the market climate. Delek said it would finance the purchases via a 3-year loan of $120 million from Citigroup Inc.

Analyst IHS Global Insight said the decision by Delek to invest more in Noble Energy reflects “the success of the two companies' partnership and signals confidence in their future together as plans begin to take shape for a ramp-up in Israel's domestic gas production.”

Delek and Noble Energy are part of the Yam Tethys consortium, which has discovered natural gas in commercial quantities off Israel. The partners in Yam Tethys are Noble Energy (47%), Delek Drilling (25.5%), Avner (23%), and Delek Group Ltd. (4.44%).

Earlier reports said Noble Energy, spurred by a recent US Geological Survey report concerning oil and natural gas reserves off Israel, contracted the Pride North America semisubmersible rig from Pride International Inc. for one firm well and seven optional wells from March-April 2011 (OGJ Online, Aug. 4, 2010).

In March, the Yam Tethys consortium increased by 7.5% the estimated volume of gas at the Mary B drilling site to 1.9 billion cu m. The upward revision was based on a report by Netherland, Sewell & Associates Inc., an engineering consulting firm that provides estimates of oil and gas reservoirs.

In July 2009, Israel’s state-owned Israel Electric Corp said its directors approved a plan to buy 5 bcm of natural gas from the Yam Thetis consortium for $1 billion over the next 5 years.

Contact Eric Watkins at hippalus@yahoo.com

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