Another major energy company seeks a direct interest in Israel’s Leviathan gas reservoir. British Petroleum (BP) together with Abu Dhabi National Oil Company (ADNOC) has made an offer to buy half of the NewMed Energy (formerly Delek Drilling) limited partnership (TASE: NWMD) controlled by Yitzhak Tshuva’s Delek Group (TASE: DELEKG). The offer is at a price higher than the peak NewMed Enegy reached on the Tel Aviv Stock Exchange last year. This follows the acquisition of Noble Energy by Chevron in 2020, giving Chevron an almost 40% holding in Leviathan.
NewMed Energy, headed by Yossi Abu, notified the Tel Aviv Stock Exchange that it had received a non-binding indicative offer from BP and ADNOC. The offer is to acquire for cash all 45% of the participation units (equivalent to shares) in the partnership held by the public, and 5% of the participation units held by Delek Group.
If a deal is completed, BP and ADNOC will hold 50% of the partnership through a joint company. The internal division of the holding is not yet known. Delek Group will hold the other 50%.
The offer submitted to investors yesterday morning is NIS 12.05 for each participation unit in NewMed Energy, valuing the partnership at NIS 14.2 billion. This is 65% higher than the closing price of the units on Sunday. The highest price that NewMed participation units have reached is NIS 9.89, in August last year, meaning that the offer is 33% above NewMed Energy’s peak price.
NewMed Energy’s board has appointed an audit committee consisting of three external directors to examine the offer and make a recommendation to the full board. Any deal will require court approval and approval by a general meeting of the free-float participation unit holders.
"The offer is a result of the warm relationship and the bridges we have built in the past few years with the energy companies active in the region, and is an important vote of confidence in the Israeli gas market in general and in NewMed Energy and its assets in particular," Yossi Abu said this morning.
BP said in a statement: "bp and ADNOC intend to form a new joint venture that will be focused on gas development in international areas of mutual interest including the East Mediterranean. This proposed transaction with NewMed Energy would be a significant first step in establishing this dynamic joint venture together with ADNOC.
"When completed, this would strengthen the broader strategic partnership between ADNOC and bp across oil and gas, hydrogen and carbon capture and storage technology and would deepen the partners’ long-standing relationship."
Published by Globes, Israel business news - en.globes.co.il - on March 28, 2023.
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