Noble Energy Inc. said the development of its Leviathan project off the coast of Israel has been pushed back about a year following an “incredibly lengthy” national process to set natural gas export policy.
The Israeli High Court last month rejected appeals by environmental groups and Parliament members to overturn a government decision to allow offshore gas exports.
The delay associated with the legal challenge “did push back Leviathan about a year,” Chief Executive Officer Charles Davidson said today during a presentation at a Bank of America Corp. conference. “You can’t change the calendar.”
Noble, based in Houston, is developing gas off the coast of Israel for use there as well as for exports. Noble said last year that Leviathan might deliver gas for Israel’s domestic market in 2016, with exports possible in 2018. Davidson didn’t provide a specific timeline during today’s webcast of his remarks.
In May, Noble estimated the Levant Basin’s discovered gross resource was about 38 trillion cubic feet of gas, including Leviathan. The company isn’t ready to drill development wells yet for Leviathan, Davidson said today. The company also has sought to explore for possible oil resources in the area.
“I’m happier having a delay now to have much more legal certainty around the exports than to rush ahead and end up having problems down the road,” Rob Cordray, an analyst with Guggenheim Securities LLC in Dallas, said in a phone interview today. He has a buy rating on Noble shares and doesn’t own any.
Davidson said a liquefied natural gas, or LNG, project is still expected to be part of the development, though possibly with fewer production trains. It may be a floating LNG project or involve LNG in Cyprus, he said.
Noble’s partners in Leviathan include Delek Drilling-LP, Avner Oil Exploration LLP and Ratio Oil Exploration 1992 LP. Noble didn’t immediately respond to a phone message and e-mail message asking to discuss the timing of plans in Israel.
Noble rose 1.6 percent to $73.98 at the close in New York.