Israel's Delek Group Ltd. is close to clinching Chevron Corp.'s oil and gas fields in the British North Sea, which have a price tag of around $2 billion, sources familiar with the matter told Reuters.
UPDATE - Israel's Delek Confirms It Made Offer For Chevron's North Sea Oilfields
Delek, via its North Sea oil and gas operator Ithaca Energy Inc., could reach an agreement within days, two of five sources said.
U.S. oil major Chevron kicked off the sale of its central North Sea oil and gas fields Alba, Alder, Captain, Elgin/Franklin, Erskine and Jade as well as the Britannia platform and its satellites last July, with the help of U.S. investment bank Morgan Stanley.
One of the sources said that Delek would pay between $1.8 and $2 billion for the assets, which exclude Chevron's 19.4% stake in the BP Plc-operated Clair Field.
The Israeli company beat competitors including a consortium formed by Britain's Premier Oil Plc and U.S. private equity fund Apollo Global Management LLC and also British petrochemical maker Ineos Group Holdings Ltd., the sources said. It hired JP Morgan Chase & Co. and BNP Paribas SA as advisors to the acquisition.
The acquisition would mark another step for Delek towards its expected public listing, the sources said. The company earlier this month acquired Shell's 22.45% stake in the Caesar-Tonga Field in the U.S. Gulf of Mexico for $965 million.
RELATED: Shell Divests Gulf Of Mexico Stake To Israel’s Delek Group For Nearly $1 Billion
Chevron and Delek declined to comment.
Ithaca said in an emailed statement "it is continuously looking at opportunities to grow its business but will not comment on any specific situations or market speculation."
The deal would be just the latest of many that have transformed the population of North Sea producers over the past five years.
Under pressure from a fall in oil prices to near 14-year lows of $26 a barrel in 2016, major oil and gas companies have been forced to sell assets to private equity-backed investors and specialized operators.
Funds including Neptune Energy Group Ltd., backed by The Carlyle Group LP and CVC Capital Partners Ltd., and Chrysaor Holdings Ltd., backed by EIG Global Partners LLC, among others, have since raised billions of dollars to snap up what they see as bargains in the sector.
Chevron, which produced 50,000 barrels of liquids and 155 million cubic feet of natural gas per day on average in 2017, is looking to free up cash for longer-term, more high margin businesses in the U.S.
Earlier this month, it made a $33 billion bid in cash and stock to buy Anadarko Petroleum Corp. and bolster its position in shale oil and the LNG market, which was, however, trumped on April 24 by Occidental Petroleum Corp.
Recommended Reading
CNOOC Sets Increased 2024-2026 Production Targets
2024-01-25 - CNOOC Ltd. plans on $17.5B capex in 2024, with 63% of that dedicated to project development.
Range Resources Expecting Production Increase in 4Q Production Results
2024-02-08 - Range Resources reports settlement gains from 2020 North Louisiana asset sale.
After 4Q Struggles, Transocean’s Upcycle Prediction Looks to Pay Off
2024-02-21 - As Transocean executives predicted during third-quarter earnings, the company is in the middle of an upcycle, with day rates and revenues reaching new heights.
Comstock Continues Wildcatting, Drops Two Legacy Haynesville Rigs
2024-02-15 - The operator is dropping two of five rigs in its legacy East Texas and northwestern Louisiana play and continuing two north of Houston.
Trio Petroleum to Restart McCool Ranch Oilfield
2024-01-07 - California’s Trio Petroleum plans to restart oilfield production at McCool Ranch, where six wells that previously reached a production peak of 400 bbl/d.