Noble cuts cast doubt on Leviathan development

Leviathan

The Houston-based energy company has slashed its 2016 investment budget.

Leviathan operating partner Noble Energy Inc. (NYSE: NBL) has announced that it is sharply cutting its 2016 development budget due to the steep fall in energy prices. Noble Energy said that it now expects to invest $1.5 billion in capital spending this year, 50% less in 2015.

the Houston-based energy company has also cut its dividend by 44% to $0.10 per share from its previous dividend of $0.18 per share.

Noble Energy CFO Kenneth M. Fisher said, “The decision to adjust the quarterly dividend, along with a substantially reduced and flexible capital program for 2016, is part of a comprehensive effort to spend within cash flow and manage the Company’s balance sheet. We also intend to reduce leverage in this environment.”

Noble Energy made no mention of when it plans to begin developing the Leviathan gas field. Shortly after the Israeli government approved the gas agreement last year, it had said it would develop the reservoir before the end of 2016 but that date would now appear to be unlikely. The decisive factor will be if and when the Leviathan partners can sign contracts to sell some of the fields estimated 22 TCF of gas reserves.

Noble owns39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.

Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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