A major obstacle to the development of the Tamar natural gas has been removed. Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd. have signed an interim financing agreement with Barclays Bank plc (LSE: BARC) and HSBC Holdings plc (LSE:HSBA; HKSE: 005; NYSE, Paris: HBC) to develop the gas field. The agreement was signed on Friday in London.
Sources inform ''Globes'' that Delek and Dor Alon Energy obtained a short-term 18-month bridge loan with an option to extend by six months. Delek Group subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) will together receive $380 million, and Dor Alon Energy will receive $50 million. The bridge loan ensures continued development of the Tamar site until approval of the national outline plan and the signing of a sales contract with Israel Electric Corporation (IEC) (TASE: ELEC.B22).
The Tamar partners are now waiting for the third Israeli partner, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), to sign a financing agreement. It is in talks with Deutsche Bank AG ((NYSE: DB; XETRA: DBG).
These terms will enable Delek Group to raise the main financing for the project on the basis of an approved development plan. Gas exploration sources said that the bridge loan was a new financing program because it enables Delek Group to defer the raising of the main financing by 18 months when it will be able to obtain financing under conditions of greater certainty and at lower costs.
Noble Energy Inc. (NYSE NBL) owns 36% of Tamar, Delek subsidiaries Avner and Delek Drilling each own 15.625%, Isramco owns 28.7%, and Dor Alon Energy Exploration Ltd. owns 4%.
Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2010
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