Editor's Note: This article was originally published at 8:30 a.m. on Real Money on Monday, July 14. Sign up for a free trial of Real Money.
This latest possibility for a full-scale invasion of Israel into Gaza makes the Israeli assets in the Mediterranean intensely more important now than they were even yesterday. Given the concurrent upgrade of those Leviathan assets, I cannot see a better reason to continue to hold positions in Noble Energy (NBL).
Political arguments are one thing. I am a fervent and unrepentant supporter of Israel and do not for one single moment question Israeli air strikes or the possible ground invasion that might be needed to protect its citizens from the rocket fire being perpetrated by Hamas. But Israel is hardly surrounded by that kind of support -- not from Europe, and not even here in the U.S.
But energy supplies -- yes, energy supplies -- can go a long way toward equalizing the political opinions of many of the equivocators. The Leviathan find in the Mediterranean Sea, which Noble Energy is developing for Israel with the help of Delek Group, is the key to getting the Europeans, and even other Middle East nations, to better "understand" the security needs of Israel. Argue the merits of the Palestinian question all you like. But, when winter comes, you'll want a good relationship with the guys holding the spigot, and that's a happy new circumstance that will befall the Israelis in the next decade.
Just in this previous week, the recoverable estimates for natural gas in the Leviathan were again upgraded, increasing this time by 16%. It is now estimated that Leviathan contains perhaps as much as 26 trillion cubic feet of natural gas, a huge find that's very easily accessible to Israel itself, but also to Northern African nations and, most assuredly, Europe.