Noble Energy Inc. (NYSE: NBL) will sell a 3% working interest in the Tamar Field offshore Israel to the Harel Group, an insurance provider and pension manager, and the Israel Infrastructure Fund for $369 million, Noble said.

The price suggests the overall value of the asset is $12 billion. Noble plans to whittle down its interest in the project to one-quarter, leaving it with a $3 billion stake in the field.

“This transaction reflects the inherent value of our producing Tamar asset, which reliably fuels more than half of Israel’s electricity generation today,” Gary W. Willingham, Noble’s executive vice president of operations, said in a statement July 5.

“These proceeds further bolster our balance sheet in the near term and will contribute to our upcoming capital investments in Israel, including our initial investment in the Leviathan project,” he added.

As part of the deal, Harel Group and the private-equity infrastructure fund have the option to purchase an additional 1% stake in the Noble-operated field in the Mediterranean Sea.

Under Israel’s Natural Gas Regulatory Framework, which aimed to alleviate antitrust concerns while also providing regulatory stability for oil and gas companies, Noble has agreed to sell 11% of its Tamar Field interests.

The agreement not only cleared Tamar for continued development, but also allowed the Leviathan gas development to proceed. In order to maintain stakes in Leviathan, with gross natural gas resources of about 22 trillion cubic feet of gas, Noble and partner Delek Group were instructed to reduce interests elsewhere.

Noble, which held a 36% stake in Tamar before reaching the agreement, said it plans to sell the remaining 7% to 8% working interest in Tamar over the next 36 months.

When the task is done, Noble will have a 25% working interest in the field that has an estimated 10 Tcf of recoverable natural gas resources. It will maintain operatorship.

Analysts at Simmons & Co. International said news of the agreement was in line with expectations, but called it “positive.”

“It should further strengthen the balance sheet in the near term and help fund NBL’s upcoming Israel investments,” Simmons & Co. said in a note.

To meet rising Israeli natural gas needs, Noble said it plans to drill an additional development well in the Tamar Field, with drilling scheduled to start in the fourth quarter.

“The additional producing well will further enhance redundancy while meeting maximum deliverability for extended peak demand periods,” Noble said in a news release. “There is no material change to the company’s overall 2016 capital program.”

In 2015, Noble said it generated $318 million net, pre-tax, on the sale of 252 MMcf/d of gas from Tamar.

The agreement speaks to the potential of Noble’s other Levant Basin assets awaiting development, according to Willingham. The company’s other discoveries—including the giant Leviathan and the Aphrodite Field offshore Cyprus in the Levant Basin—“share similar reservoir and well deliverability characteristics and are poised to bring needed energy to a region which is fundamentally short natural gas.”

Noble’s Tamar deal is expected to close in third-quarter 2016, subject to customary terms and conditions.

Velda Addison can be reached at vaddison@hartenergy.com.

Offshore