Israel’s Delek Group is reportedly mulling a London-listed spin-out to host its stake in the Noble Energy-operated (NYSE:NBL) Leviathan natural gas field.
Delek would, according to a Reuters report, retain its interests in the producing Tamar and Dalit gas operations via its existing Delek Drilling subsidiary.
READ: Energean kicks off well drilling campaign offshore Israel
The new vehicle would meanwhile own a 45.34% stake in Leviathan – a large pre-production field development off Israel’s Mediterranean coast – as well as a 30% stake in the Aphrodite gas discovery, offshore Cyprus.
Leviathan is host to some 21.4trn cubic feet of gas reserves, making it one of the largest in the world. Development began back in 2017 and first production is slated for later this year. Phase 1 of the Leviathan development is set to cost between US$5.25bn and US$5.75bn.
The Aphrodite discovery is located some 35 kilometres from Leviathan, located in Cypriot waters, and it hosts some 4.5trn cubic feet of gas.
A development plan for a US$2.5bn to US$3.5bn project has previously been submitted to the Cypriot authorities.
The media reports on the possible London float do not mention whether the Delek re-organisation would include North Sea assets previously picked up via the US$1.24bn acquisition of former AIM-quoted Ithaca Energy.
Does Energean’s success bode well for new Israel float?
The envisaged spin-out and London IPO would follow the successful float of Energean Oil & Gas PLC (LON:ENOG), which a year ago, listed alongside a £330mln raise, which valued the company at £695mln. It also owns stakes in Israel gas projects, as well as interests in Greek waters.
The London-listed shares now have a total market capitalization of around £1.25bn as its flagship assets continue to be developed.
Such a performance perhaps suggests an appetite in the City for these kinds of operations and geographies.
Energean previously acquired stakes in the Karish and Tanin fields – hosting around 3trn cubic feet of gas – from Delek, which retains royalties over future production.
Earlier this month, Energean announced it had kicked off development drilling operations in its 2019 Israel well campaign, which will comprise at least four wells, but, could increase to as many as ten. It started off with an initial programme of four wells at the Karish North project.