HOUSTON, March 14, 2012 /PRNewswire/ -- Noble Energy, Inc. (NYSE: NBL) announced today that it and its partners in the Tamar field have signed a gas sales agreement to sell natural gas from the Tamar field, offshore Israel, to Israel Electric Corporation Limited (IEC). Under the 15-year agreement, IEC is expected to purchase approximately 2.7 trillion cubic feet (Tcf) of natural gas as fuel to provide electricity to the state of Israel and retains, under certain conditions, an option to expand the agreement quantity to approximately 3.5 Tcf.
Although actual revenue will be dependent upon purchased quantities and prices at the time of sale, the estimated total revenue for the 15-year period is $18 billion in the event IEC does not exercise its option and $23 billion if the option is exercised. The gas price formula includes a base price and is indexed mainly to the US Consumer Price Index. The agreement is subject to final government approval, which is expected.
"We look forward to the start-up of gas deliveries from the Tamar field to meet the needs of the state of Israel," said Charles D. Davidson, Noble Energy's Chairman and CEO. "This clean burning fuel will reduce emissions and lower the cost of power generation. Tamar is on schedule to begin commissioning late this year with initial gas deliveries expected in April 2013."
As a result of this and previously announced agreements, the Tamar partners have sales agreements for natural gas quantities in the range of 3.9 to 4.7 Tcf with six different customers, resulting in estimated total revenues between $27 billion and $32 billion over a 15 to 17 year period.
Noble Energy operates Tamar with a 36 percent working interest. Other owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent, and Dor Gas Exploration with the remaining four percent.
Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.
This news release contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Words such as "anticipates," "believes," "expects," "intends," "will," "should," "may," and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Energy's current views about future events. They include planned development activities, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, the negotiation and execution of definitive agreements, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy's business that are discussed in its most recent annual report on Form 10-K and in other reports on file with the Securities and Exchange Commission. These reports are also available from Noble Energy's offices or website, http://www.nobleenergyinc.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.