Noble Energy Sells GOM Deepwater Assets To Fieldwood Energy
Zacks Investment Research | Apr 12, 2018 10:47PM ET
Noble Energy, Inc. (NYSE:NBL) announced that it has completed the sale of deepwater Gulf of Mexico assets to Fieldwood Energy LLC for $710 million. The agreement was signed in February.
For the Gulf of Mexico assets, Fieldwood Energy will pay $480 million in cash and assume liabilities of $230 million. The company will utilize proceeds from this divestment to fund a portion of its $750-million share repurchase program, which in turn will raise shareholders’ value.
Change in Strategy
Noble Energy has been focusing on portfolio transformation to strengthen cash flow and margin. Selling of the Gulf of Mexico is a major step undertaken by the company. Post the divestiture, the company will focus on the development of U.S onshore assets and Eastern Mediterranean.
The company is planning to strengthen & expand its production from Tamar field offshore Israel in Eastern Mediterranean region. Operations in Tamar supported by the Leviathan development is expected to improve margins that will provide a stable and long-term cash flow in the near future. The growing demand of natural gas in Eastern Mediterranean region will be fulfilled by extracting higher gas volumes from existing assets of the Tamar Field and the upcoming Leviathan development.
Other Acquisitions and Divestments
Recently, Cobalt International Energy Company’s several assets located in the Gulf of Mexico were acquired by Total SA (NYSE:TOT) . The deal was valued at about $300 million.
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