Noble Energy is reported to be working with Barclays Plc on the sale of a 7.5 per cent stake in the Tamar natural gas field off the coast of Israel.
The company and its advisers – said to include another unidentified bank – are approaching institutional investors about the potential sell-off.
It is estimated to be worth between $1 billion and $1.1 billion, sources said.
Noble is seeking to convert the stake into a special-purpose company and raise debt totaling about 50 per cent to 60 per cent of its value.
This would be paid to shareholders as a dividend, a source with knowledge of the deal said.
At these levels, the entire Tamar field is being valued as high as $14.7 billion – an increase of 20 per cent from a previous valuation.
Noble sold a 3.5 per cent working interest in Tamar to Harel Insurance Co. Ltd. last year for $431 million. This valued the field at $12.3 billion.
Noble still owns 32.5 per cent of the field, which has supplied the vast majority of Israel’s natural gas since 2013.
Under an agreement with the government, the company must reduce its stake to 25 per cent to promote competition in the industry.
Other major shareholders include billionaire Yitzchak Teshuva’s Delek Group Ltd. which must sell its entire stake – 31.25 percent – as part of the regulatory framework.
The company is considering options including an initial public offering in Europe or the U.S.
Isramco Negev 2 LP holds 28.75 per cent.
Spokesmen for Noble and Barclays declined to comment.