BP and Abu Dhabi National Oil Company bid for Israeli East Mediterranean gas player NewMed Energy
UK major BP and Abu Dhabi National Oil Company have made a joint offer to take control of NewMed Energy, the Israeli natural gas company with LNG export plans and a supplier of pipeline gas to Israel, Egypt and Jordan.
Israel’s NewMed Energy with gas assets and LNG plans says merger prospects with UK firm decreasing
NewMed Energy, a stakeholder in the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, said it was looking more unlikely that it would proceed with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.
The expected completion date of the NewMed merger with London-listed Capricorn was the first quarter of 2023.
However, Capricorn has been caught up in a dispute with a major shareholder and has put back a meeting of all shareholders to approve the deal with NewMed.
Capricorn had previously cancelled its proposed merger with UK rival Tullow Oil in favour of the combination with Israel’s NewMed, which was first announced on September 29, 2022.
There had been plans for a $1.4 billion merger between Tullow and Capricorn, which is based in Edinburgh and was formerly known as Cairn Energy.
Among its assets, NewMed holds the rights to 45 percent of the Leviathan Israeli offshore gas field with the other major shareholder in the field being Chevron Corp.
Cyprus gas field
NewMed also has the Aphrodite gas field in Cyprus's offshore economic zone waters, making it one of the biggest players in the East Mediterranean.
In the latest merger developments, Capricorn released a statement to the London Stock Exchange whereby it had decided to adjourn Capricorn's shareholder meeting called for the purpose of approving the NewMed transaction, to February 22 instead of February 1.
An alternative shareholder meeting was called at the request of one significant Capricorn shareholder, Palliser Capital (UK) Ltd., for the replacement of the serving directors of Capricorn with new directors that were proposed by Palliser and a meeting for this purpose was then scheduled to take place on February 1 instead of a meeting to approve the NewMed deal.
Members of the board of Capricorn, including the Chairman of the board and the Chief Executive, resigned immediately from the board and it was also the intention of two other directors, including the Chief Finance Officer, to resign from the board before the February 1 meeting called at the request of Palliser.
NewMed said that in view of these developments and the resignation of most of the Capricorn board members, the probability for the closing of the UK transaction had “significantly decreased”.
The Israeli company said it was continuing to examine strategic alternatives with the aim of “maximizing value” for its own shareholders.
NewMed is currently in the midst of plans to promote the expansion of the Leviathan gas field offshore Israel and the development of the Aphrodite reservoir alongside the launch of exploration and production of natural gas in other Middle East countries.
The Leviathan gas field in addition to supplying the Israeli domestic market also supplies Egypt and Jordan with gas and has existing plans to possibly supply feed gas for liquefaction at the two Egyptian LNG plants, Idku and Damietta, located east of Alexandria.
European major Total crowns Mozambique LNG funding with substantial gas discovery offshore Egypt
Three European energy majors and prominent LNG market participants, Total, BP and Eni have confirmed a substantial East Mediterranean natural gas discovery in the North El Hammad block located 11 kilometres offshore Egypt.
Total said that along with its partners, BP of the UK and Eni of Italy, the Bashrush well in the North El Hammad licence area encountered 102 metres net gas pay in high quality sandstones of the Abu Madi formation.
“A production test was conducted with flow rates of up to 32 million standard cubic feet of gas per day, limited by testing facilities,” said Total.
“It is estimated that future deliverability per well will be up to 100 MMscf per day, along with up to 800 barrels of condensate per day,” explained the Paris-based company.
“Future plans foresee development through tie-in to nearby existing infrastructures,” stated Total.
Kevin McLachlan, Senior Vice President Exploration at Total, said the discovery was a boost for the company, whose most prominent venture at the moment is the fully funded Mozambique LNG export project in southeast Africa,
“We are very pleased to announce this discovery in Egypt. These results support our strategy to allocate a significant share of our exploration budget to the search of hydrocarbons in the vicinity of existing infrastructures,” added McLachlan.
“These resources have low development costs since they can rapidly be tie-in and put into production,” he stated.
Total holds a working interest of 25 percent in the North El Hammad licence, alongside operator Eni with 37.5 percent and BP with 37.5 percent.
Total confirmed in July 2020 that full project financing was in place for the Mozambique LNG project using Area 1 feed-gas in the Rovuma Basin.
The joint venture companies in Mozambique have signed a $14.9-billion senior debt financing agreement proposed to construct a two-Train liquefaction plant with a total capacity of 13.1 million tonnes per annum.
Total said that the Mozambican venture represented a total post-financial investment decision outlay of $20Bln.
The Area 1 shareholding has Total as operator with a 26.5 percent participating interest alongside ENH with 15 percent.
Japan’s Mitsui & Co. owns 20 percent, India’s ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent.
