NEW YORK (The Deal) -- Australia's Woodside Petroleum said Friday it agreed to buy a 25% stake in the Leviathan field off Israel's coast in a deal that could be worth $2.55 billion, depending on the achievement of certain milestones.
The deal secures Woodside a share of Leviathan's estimated 18.9 trillion cubic feet of natural gas and 34.1 million barrels of condensate and installs Woodside as the operator of LNG development at the field, while Noble will remain the upstream operator.
Under the terms, Perth-based Woodside will pay $850 million upon deal completion and a further $350 million if a decision is made to develop the LNG project or on achievement of export project milestones.It will also pay 5.75% of the value of gas exports after the first 2 trillion cubic feet of gas has shipped, up to a cap of $1.3 billion; a 2.5% royalty on production from a deep-water prospect that is yet to be developed; and a one-time $50 million if reserves remain above 20 trillion cubic feet after production of an initial 4 trillion cubic feet. Houston-based Noble said its share would amount to $1.03 billion, including a $390 million payment on deal completion, a further $135 million of cash payments and $502 million in shared future revenue. "Woodside brings extensive global expertise in LNG operations and marketing to the partnership," Noble chairman and CEO Charles Davidson said in a statement. Noble will own 30% of the project once the sale is completed. Woodside will become the No. 2 stakeholder, leaving Delek and Avner with 16.94% each and Ratio with 11.12%. The deal is expected to complete by March 27. Woodside has a market capitalization of A$30.96 billion ($27.71 billion). Its shares closed Friday in Australia at A$37.58, marginally lower than their Thursday close.