Noble to farm out part of Leviathan interest

Noble Energy Inc. has signed a nonbinding memorandum of understanding regarding the sale of 9.66% interest in the Leviathan licenses offshore Israel to Woodside Petroleum Ltd.

Leviathan’s current partners—Noble Energy, Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration—are each participating as sellers of 25% interest in the licenses to Woodside.

Noble will continue as upstream operator with 30% working interest. Following completion of the transaction, Woodside will become the operator of any LNG development of the field.

The Leviathan project is on the Rachel and Amit licenses offshore Israel in 5,550 ft of water. It is thought to contain 19 tcf of discovered natural gas resources.

Total compensation to Noble is expected to include $525 million in cash payments, including $390 million payable at this year’s closing of the transaction, plus $502 million in shared future revenues.

Noble started drilling at Leviathan in 2010 (OGJ Online, Oct. 19, 2010), later estimating production of as much as 750 MMcfd for Israel via a northern entry point in 2016 (OGJ Online, Dec. 7, 2012).

Working interests in the Leviathan project after the transaction is complete will be Noble 30%, Woodside 25%, Delek Drilling 16.94%, Avner Oil Exploration 16.94%, and Ratio Oil Exploration 11.12%.

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