articles | 04 June 2015

Cyprus welcomes Delek’s $155m gas bid

The Cyprus government has welcomed Delek’s recent announcement to the Tel Aviv Stock Exchange that it had begun preliminary negotiations with Noble Energy for the acquisition of 19.9% of Noble’s share in Block 12 offshore Cyprus.

“This effort affects us positively, because all efforts to raise finances, especially at a time when we see reduced international prices for fuel, all the efforts made to raise finances are for the benefit of the Republic,” said Energy Minister George Lakkotrypis.

The Aphrodite field in Block 12 contains an estimated 4.54 trillion cubic feet of gas. The gas was discovered in late 2011 but has not yet been exploited.

Noble owns 70% of Block 12, Delek Drilling Limited Partnership owns 15%, while Avner Oil Exploration, part of the Delek Group, also owns 15%.

The move would put Delek and Noble almost on an equal footing, with Noble owning 51.1% and the Delek Group owning 49.9%. The initial amount being discussed for the acquisition is said to be $155 million.

In its announcement Delek said it was important to note that the negotiation was in its initial stages, not binding or exclusive, and there was no certainty that the above mentioned negotiations will mature into any binding agreement between the parties. Nor was there any timetable for the negotiations.

The transaction would be subject to various approvals, including the approval of the Noble, the Republic of Cyprus among others.

Lakkotrypis noted that Noble had “been in the process of finding a strategic investor to allocate a percentage of what it holds in Block 12 for several months”.

Delek the only buyer?

Lakkotrypis added that the move was common practice for companies looking toraise funds for the development of deposits. Hinting that there might be another buyer on the horizon, he said “in this particular case we know of several cases where Noble is in consultation with different companies to allocate a percentage of its share currently held in Block 12.”

Source: InCyprus

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