Delek Drilling, Avner Oil Raise $2 Bln For Leviathan Field

Posted by Joseph R. Fonseca
Sunday, May 11, 2014
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Israel's Delek Drilling and Avner Oil have raised $2 billion in an international bond offering to help fund the development of the huge Leviathan natural gas field off the coast of Israel.

An announcement by the firms said demand of $13.5 billion was the largest ever for an Israeli enterprise and it was over-subscribed by 650 percent.

"This shows unprecedented confidence by European, U.S. and Israeli financial markets in the vision of Delek Drilling, Avner and Delek Group," Avner Chairman Gideon Tadmor said.

"The development of the Leviathan reserve will allow the continuation of the Israeli natural gas revolution and regional and international export that will significantly strengthen Israel's geo-political standing," he added.

Avner and Delek Drilling are major shareholders in the group developing Leviathan, which holds an estimated 19 trillion cubic feet of gas and is expected to go online around 2017. Much of the reserves are earmarked for export.

Company executives held a road show to attract investors in the United States, Europe and Israel. Five series of bonds were issued, each with its own fixed interest rate, and with the longest maturing in 2025, the companies' statement said.

Texas-based Noble Energy is the field's operator with a 39.66 percent stake. Avnerand Delek Drilling, subsidiaries of Delek Group, hold a combined 45.34 percent, and Ratio Oil has the remaining 15 percent.

The partners are due to receive another large sum from the sale of a 30 percent stake in the field to Australia's Woodside Petroleum. However the deal, worth up to $2.7 billion deal, has been held up over a tax disagreement between Woodside and Israel. [IDn:nL4N0MO52B]

The partners have signed a 20-year deal with a Palestinian power company to sell $1.2 billion worth of gas, and earlier this month put in a bid to sell gas through a pipeline to Cyprus.

(Writing by Ori Lewis and Ari Rabinovitch)

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