Noble Energy, Delek reach partnership deal on Cypriot license

Delek Drilling and Avner agreed a 30% stake in Block 12, across the the Israeli-Cypriot maritime border from Leviathan.

Offshore oil and gas exploration trade magazine "Offshore" reports that Noble Energy Inc. (NYSE: NBL) has reached agreement for a license on its Cypriot concession Block 12 with Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L)/

Block 12 lies just across the border of the Israeli-Cypriot maritime exclusive economic zones from Leviathan. Noble Energy has had the concession to Block 12 since 2008, and under a March 2010 agreement, Avner and Delek Drilling have an option to 30% of the concession.

Under the terms of the exploration license, Delek Drilling and Avner will bear 15% of Noble Energy’s expenditures for Block 12, including exploration and appraisal wells, development or production, and/or other operations, in accordance with the Production Sharing Contract.

The deadline for the Cypriot authorities to approve the transfer of rights to Block 12 has been extended to August 1, 2013. Until then, Avner and Delek Drilling can transfer their rights to a third party acceptable to Noble Energy and subject to approval by the Cypriot authorities.

Noble Energy is due to begin drilling an exploratory well in Block 12 by October 1. Until the Cypriot government approves the transfer of rights in Block 12 to Avner and Delek Drilling, they will have no access to any confidential information about Block 12 activities nor influence on drilling decisions.

Noble Energy has never disclosed estimates about the potential natural gas reserves in Block 12. However, Cypriot Energy Service director Solon Kassinis has said that the potential reserves are 10 trillion cubic feet. Leviathan has an estimated 16 trillion cubic feet. Located in the deepwater Levant Basin, Block 12 and Leviathan share similar geologic structures.

Noble Energy and Delek are partners in Leviathan, as well as in other Israeli offshore licenses, including Yam Tethys, which is in production, Tamar, Dalit, and Noa.

Avner's share price fell 1.6% in morning trading to NIS 1.89, giving a market cap of NIS 6.3 billion, and Delek Drilling's share price fell 2.2% to NIS 10.89, giving a market cap of NIS 5.3 billion.

Published by Globes [online], Israel business news - - on August 25, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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