Sundance: Park City Real Estate Hits New Peaks

Inside a Stein Eriksen residence.

While the Sundance Film Festival is poised to turn Park City into a high-powered Hollywood scene for the next two weeks, the tiny town of 7,500 is in the midst of its own real estate boom, one that may have every other U.S. ski resort town beat.

“It’s popping again. Things are better than even at the peak of the market for luxury sales,” says Sotheby’s International Realty agent Paul Benson of the area where Katherine Heigl, Michael Jordan, and former Good Morning America host Charles Gibson own homes. “Not only are we getting buyers from all over the world who are attracted by residences like The Montage and St. Regis, we’re also starting to get year-round buyers. Lots of tech people are moving here for their primary residence. And in the actual town of Sundance where every other home is Hollywood owned, prices are back up to the $5-$10 million region.”

Among the area's high-end listings: John Schnatter’s 6,800-square-foot condo at the St. Regis. Schnatter, a real estate collector and owner of Papa Johns, put his mountain-facing spread on the market for $17.9 million. Michelle Eastman and Brigid Flint of Sotheby's International Realty hold the listing. 

Mitt Romney purchased a slope-side mansion in Deer Valley in late 2013. Listed at $8.9 million, the 9,000-square-foot, super-sized log cabin included six bedrooms and eight bathrooms – a suitable size for the politician and his wife’s 25 grandchildren.

“The Romney sale is indicative of the kind of action we’re seeing again,” says Keller Williams agent Steve Blankenship, who cites the $125-million Park City Film Studios, which broke ground in October of 2013, as another huge future boon to the residential real estate market. “Having sound stages and a film school right here in town could definitely bring in even more movie industry people,” says Blankenship, adding to current homeowners like Paramount CEO Brad Grey and Modern Family producer Steve Levitan. 

PHOTOS: 15 Films That May Spark Frenzy at Sundance

Not that every big-ticket listing is selling overnight. DreamWorks Animation CEO Jeffrey Katzenberg’s pine-and-granite house has been on the market since August 2012 with a $20.5 million price tag that hasn’t been reduced. “This isn’t a mainstream home,” says Benson. “It’s a unique property, but there will be a buyer, somewhere out there in the world, who just has to have it.”

Striking broader appeal, and debuting just in time for the Sundance scene, are the Stein Eriksen Residences, a set of 16 homes that will be priced from $2 - $7 million in Deer Valley. A model home will be open for the film festival. Built near the Stein Eriksen Lodge, which is frequented by Robert Redford and Ryan Reynolds, the homes give the rustic mountain look a contemporary upgrade, with clean lines, huge windows and modern décor.

The Colony at White Pines, however, offers the ultimate in high-end homes. The gated, heavily forested, community boasts some of the highest priced homes in the area, including one owned by Will Smith. “I think of these homes as mini ski-in/ski/out mini ranches,” says Erik Asarian of Keller Williams. “We currently have a home listing there for $24.6 million and overall it’s a hot market. Seven homes sold there in 2013, and we had 16 lot sales in the same year, up from eight lot sales in 2012 and six in 2011. This is the ultimate Industry hideaway. It’s our equivalent of beach front property in Malibu.”

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Gazprom to launch commercial gas production from Kirinskoye field in 2014

The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Alexander Khoroshavin, Governor of the Sakhalin Region.

The meeting noted a significant amount of Gazprom's investments in the Sakhalin Region –the Company's capital investment in the Region exceeded RUB 250 billion over five years (between 2009 and 2013). The funds were mainly allocated to the following strategic projects of Gazprom: the construction of the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS), pre-development of the Kirinskoye gas and condensate field (Sakhalin III) and construction of a gas pipeline from the onshore processing facility of the Kirinskoye field to the Sakhalin main compressor station of the Sakhalin – Khabarovsk – Vladivostok GTS. This year the capital investments will make up RUB 10 billion. The Kirinskoye field pre-development will continue, including the drilling of production wells. In 2014 Gazprom is going to launch commercial gas production from the Kirinskoye field.

Alexey Miller and Alexander Khoroshavin addressed the issues of gas supply to the Sakhalin Region. Between 2008 and 2013 the Company channeled over RUB 3 billion for these purposes. In particular, a General Scheme for Gas Supply to and Gasification of the Region was elaborated, three inter-settlement gas pipelines were built connecting the Dalneye gas distribution station (GDS) and the Yuzhno-Sakhalinsk CHPP-1, the Dalneye GDS and the Novo-Alexandrovsk settlement as well as the Novo-Alexandrovsk gas distribution point (GDP), the Klyuchi population center and the Sanatornoye population center. The Region's Government, in its turn, fulfilled its obligations to prepare the consumers for gas supplies. As a result, the gasification level of the Sakhalin Region (taking into consideration the consumers, who received thermal energy from gas-powered TPPs) increased by 24.5 per cent to 33.6 per cent.

In 2014 the Company will carry on the construction of the gas branch and the Nogliki GDS, as well as the inter-settlement gas pipelines connecting the Nogliki GDS with the Nogliki GDP and the Nogliki GDS with the Nysh settlement.

The meeting addressed the plans to create an NGV fuel market in the Sakhalin Region. It was noted that in 2014 Gazprom would build a CNG filling station in Yuzhno-Sakhalinsk, the first one in the region.

The parties touched upon the issues related to Gazprom's participation in social projects in the region. It was highlighted that the Company was running the Gazprom for Children project in the Sakhalin Region. Besides, in April 2013 Yuzhno-Sakhalinsk saw the inauguration of an ice palace constructed with Gazprom's assistance.

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Mexico hydrocarbon undersecretary vows careful energy regulation, contract transparency

Mexico’s government realizes it’s crucial to establish competitive contract terms and effective, transparent regulations to attract international investors as Mexico implements its pending energy reforms, panelists told a Houston gathering on Feb. 7.

Lourdes Melgar, the new undersecretary of hydrocarbons for the Mexican Ministry of Energy, spoke to a seminar hosted by the University of Texas at Austin and the Atlantic Council in Houston on the day after she was named to her current post. Previously, she was undersecretary of electricity.

On Dec. 21, 2013, Mexico’s sweeping energy reform became law, representing a major overhaul of Mexico’s oil, gas, and electric industries.

Secondary legislation will stipulate contract logistics and tax reforms as Mexico ends the state-owned monopolies of oil company Petroleos Mexicanos (Pemex) and electric company Comision Federal de Electricidad (CFE). Secondary legislation is being drafted and discussed now.

Reforms pending

Having worked on the Mexican government’s energy reform team, Melgar noted that energy reform has been discussed for years in her country. She has held various positions in Mexico’s Foreign Service, including design work on international oil market strategy.

“It’s important to Mexico’s people to make sure we have financial transparency in every contract and bidding round,” Melgar said. Secondary legislation will outline the basics for the types of oil and gas exploration and production contracts, which will be flexible, she said.

Companies outside Pemex are to be allowed to participate in exploration and production activities, breaking the decades-old Pemex monopoly. The reforms also will allow direct private investment in Mexico’s midstream and downstream.

Melgar said Mexico expects to keep service contracts and to add profit-sharing contracts, production-sharing contracts, licenses, as well as enable a combination of various types of contracts. She told OGJ that it’s too early to know any contract specifics, and that contracts will vary widely.

“All hydrocarbons in the subsoil belong to Mexico,” Melgar said, confirming that energy reforms will enable companies outside Pemex to report oil and gas reserves on their accounting statements. “We want secondary laws that support the model the government has developed.”

Deadlines established

Mexico’s Congress has a deadline to approve these secondary laws by the end of April, she said, and the schedule calls for oil and gas bidding rounds to start around June 2015. Contract terms will be drafted carefully “to really attract the type of companies that we need,” in Mexico, she said.

Another speaker on the Feb. 7 Houston panel said Mexico could become a major oil supplier by 2022 if implementation of its energy reforms prove successful.

David Goldwyn, president of Goldwyn Global Strategies LLC and a former US State Department coordinator for international energy affairs, called Mexico’s energy reform “good timing for the rest of the world.”

Long-term opportunities for outside oil and gas companies in Mexico will involve the development of deepwater and unconventional gas plays, he said. For the near term, enhanced oil recovery technology and seismic analysis will be needed, he added.

Peter Schechter, Atlantic Council director of the Adrienne Latin American Center, said Latin America abounds with energy news although he noted, “No energy story in Latin America is more important than the Mexico story.”

US lawmakers in Washington, DC, closely are watching Mexico’s unfolding energy reform, he noted.

“Mexico is going to strengthen a North American energy market,” which means less reliance on Middle Eastern crude oil supplies, Schechter said. He noted that security concerns remain for outside investors.

Melgar acknowledged the security concerns, saying that her government is working to resolve these issues and also working to reassure potential international investors. “Security is an issue in some specific parts of the country,” she said.

"We expect these reforms to result in an increase of 1% to GDP by 2018,” Melgar told reporters in a news conference after the panel discussion. She said she was reluctant to discuss specific amounts yet, adding that Mexico’s economy is not equivalent to the US economy, making comparisons difficult.

Melgar said renewable energy will also be a priority for Mexico in the future.

Mexico seeks to reduce carbon emissions by 20% by 2020 and by 30% by 2050. Mexico also set a goal to reduce its reliance on fossil fuels to 65% by 2024, down from about 85% currently. Melgar noted that Mexico last year established a regime for trading carbon credits.

Separately from the panel discussion, Fitch Ratings issued a statement calling Mexico's energy reform “a long-term positive” for Mexico and Pemex credit quality.

“Fitch does not expect Pemex’s ratings to change due to the energy reform, but the company will benefit from the ability to find partners to share exploration risks and budgetary independence,” said Lucas Aristizabal of Fitch.

Contact Paula Dittrick at paulad@ogjonline.com.

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Residential Real Estate Firm Douglas Elliman Expands to Los Angeles

9440 Santa Monica Blvd., Beverly Hills

The Los Angeles real estate boom is attracting not only global buyers but real estate brokerages eager to get in on the market as well. Douglas Elliman Real Estate has announced its entrance into the Southern California market with plans to open offices in Beverly Hills by mid-March of this year.

The company is the largest residential brokerage firm in New York, with offices throughout New York City, Long Island, the Hamptons and South Florida. In total, more than 4,000 real estate agents work for the firm.

Elliman will launch its L.A. operations from 2,500-square-foot offices at 9440 Santa Monica Blvd. in Beverly Hills. Plans also include the rollout of additional Westside offices by the end of 2014.

STORY: Real Housewife Marisa Zanuck Opens Beverly Hills Real Estate Firm 

Real estate agents Tom Dunlap, who worked most recently as manager and executive vice president of John Aaroe Group, and Cory Weiss, who worked as a partner and director of Partner’s Trust, will head the office.  

“This company knows their clients and knows what type of agents they want and aren’t rushing this,” said Weiss, who is known for selling some of L.A.’s most architecturally significant homes, including landmark properties designed by John Lautner, Rudolph Schindler, Ray Kappe and Paul Williams.

And even though the offices have yet to open, the company already is trading in top-tier homes. "We have a major sale already under contract and an upcoming listing of one of L.A.’s most iconic architecturally significant houses," Weiss said.

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FormCap acquiring Cowley County prospect in Kansas

FormCap Corp. (OTCQB: FRMC) is making payments to Keta Oil & Gas and Kerr Energy toward the purchase of oil and gas exploration and development leases in Cowley County, Kansas. Formcap will pay Kerr and Keta $200 per acre for up to 2,400 acres of leases, at a cost not to exceed $480,000 (the purchase price) unless agreed otherwise by the company.

Formcap is evaluating a specific block of 875 acres (from the 2,400 acre total) of prospective oil leases to acquire from Kerr and Keta. The company will own 100% of the leases (80% net revenue to FormCap; 20% freehold royalty), and will be operator. FormCap will also have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest, the terms of which are set forth in the agreement.

Per the agreement, FormCap is required to drill one well in each of the first two years of the lease term to maintain its interest in the leases, and will have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr.

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Oil and gas: CLS Offshore opens new office in Hull

Business is already brisk at the new Hull base for energy sector services company CLS Offshore, which was officially opened by city councillor Martin Mancey today.

Guests at the official unveiling and open day at the Marfleet Environmental Industries Park, were told that since CLS moved in on January 2nd there had been several serious enquiries from major existing and potential clients.

"We've had many messages of welcome along with potential business opportunities, which could be worth around £20m over the next five years," said Scott McMillan, managing director of CLS Offshore.

"The next stage is that from July we hope to progress plans for a fabrication workshop on an adjacent site, which will mirror our head office facility in Great Yarmouth, and employ up to 75 onshore and offshore personnel, mainly recruited locally. We're happy to be in Hull, delighted by what is has to offer and excited by the prospects ahead."

The company is keen to work with local educational facilities regarding future prospects for students and has already been in discussion with the University of Hull and HETA (Humberside Engineering Training Association) on working together.

Cllr Mancey, cabinet portfolio holder for Hull City Council, said: "The decision by CLS to come to the area represents a significant investment locally and clearly demonstrates the potential of the area to secure new highly skilled employment opportunities.

"As such I would like to officially welcome CLS to the city and wish them every success in the future."

Hull East MP Karl Turner MP said he was delighted to hear that CLS had extended its successful operation in Great Yarmouth to Hull.

“It has a solid track record in the energy sector and this move will strengthen the region's energy credentials. This is exactly the type of company we need to attract to Hull, a developing company with confidence. This extension will help to stimulate the local economy and create jobs.”

More than 90 business, education and political guests visited the new premises during the open day and reception which was highlighted by councillor Mancey unveiling a commemorative plaque.

CLS staff were on hand to meet visitors and discuss the wide and varied services of CLS within the oil, gas, marine and renewable energy sectors.

Steady expansion has been the CLS brief over the last two years; seven new employees have started since the beginning of 2014, boosting the company workforce to more than 160.

It is currently recruiting experienced offshore personnel from riggers through to technicians and an onshore team ranging from pipefitters to welders.

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BNSF approves $5 B capital commitment program

BNSF Railway Co. (BNSF) has approved a new single-year record capital commitment plan of $5 billion for 2014, a $1 billion increase over its 2013 capital spend.

The largest component of the capital plan is spending $2.3 billion on BNSF’s core network and related assets. BNSF also plans to spend $1.6 billion on locomotive, freight car, and other equipment acquisitions. In addition, the program includes about $200 million for continued installation of positive train control (PTC) and $900 million for terminal, line, and intermodal expansion and efficiency projects.

BNSF handled more than 50% of the volume increases for the rail industry in 2013. The growth was led by an 8% increase in domestic intermodal units, an 11% increase in industrial product volumes led by crude-by-rail traffic, a 3% increase in coal volumes, and a fourth-quarter surge in agricultural products. This growth is on top of a 2012 BNSF total volume base of more than 9.6 million units. Much of the capacity expansion in the 2014 capital plan is for infrastructure investment on BNSF’s Northern Corridor to put the company in position to meet all customer service expectations, including Amtrak.

BNSF’s expansion and efficiency projects will be primarily focused on line capacity improvements to accommodate growth in agricultural products, intermodal, automotive, and industrial products volumes related to crude oil production, and other terminal improvements to enhance productivity and velocity. More than $900 million of the capital plan is for expansion and maintenance in the Northern Corridor.

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The Academy Sells Hollywood City Block to Kilroy Realty Corporation

In an off-market transaction, Kilroy Realty Corporation has purchased a four-acre Hollywood parcel from the Academy of Motion Picture Arts and Sciences for $48 million.  Located immediately north of the Academy’s Pickford Center for Motion Picture Study, the full city-block site was originally intended to house the future Academy Museum of Motion Pictures when it was acquired by AMPAS in 2005 for $50 million.

STORY: Bloomberg Philanthropies Commits $53 Million to Save the Oceans

However, in October 2011, the Academy and the Los Angeles Country Museum of Art announced a partnership through which the movie museum would be housed in the Wilshire May Co. building on the LACMA campus.

With the purchase now complete, Kilroy Realty Corporation has announced plans to seek approval and entitlements to develop a creative media mixed-use campus on the site. Plans include more than 450,000 square feet of office space, apartments and retail space with Shimoda Design Group spearheading the design.

STORY: Academy Selling Hollywood Property Once Intended for Museum 

The deal marks another major Hollywood project for Kilroy Realty Corporation, and another move towards the area's ongoing revitalization, which has faced recent setbacks with a newly released California Geological Survey that could indefinitely stall mega projects, such as the Millennium Hollywood towers.

But all of Kilroy Realty's large-scale developments -- including the Columbia Square project as well as the renovation of Sunset Media Center, a 22-story, 322,000-square-foot office complex on Sunset Boulevard just east of Vine -- are far from the earthquake fault lines, says KRC's executive vice president David Simon. "We’re not near any of the study zones. We’re in the area where development can and will happen," he says.

"The Academy site will be different from Columbia Square," says Simon, referencing the 675,000 square-foot mixed use campus located on the former site of CBS Los Angeles' television and radio operation, which began construction last year. "This is going to be more about housing smaller production and post-production companies, whereas Columbia will be more focused on larger headquarter users, entertainment and media technology companies. The Academy site will have very stylish rental units, but at a more accessible price point."

Simon added that KRC will continue AMPAS' "Oscars Outdoors" open-air summer movie screening series until construction begins: "We're currently talking to the Academy about a multitude of ideas to continue the summer film shows, and beyond."

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Baytex acquires Aurora Oil & Gas for $2.4 billion

Baytex Energy Corp. said it will acquire Australia-based Aurora Oil & Gas for $2.4 billion, which is the largest acquisition ever for the Canadian natural gas development and exploration company. Baytex will also take on Aurora Oil & Gas' debt of about $672 million. In the agreement with Aurora Oil & Gas, Baytex will be able to operate in Sugarkane field in south Texas, which is at the core of the Eagle Ford shale, Reuters reported.

"Baytex will acquire premier acreage in the core of the Eagle Ford, one of the leading shale oil plays in the U.S.," James Bowzer, president and chief executive officer of Baytex said in a statement.

Aurora's Sugarkane field includes 22,200 acres and 166.6 million barrels of reserves. U.S. oil production is expected to ultimately grow to a 25-year high with the help of major shale regions like the Eagle Ford, according to Reuters.

"This is a highly accretive transaction on a per share basis to reserves, production, and funds from operations,"Bower said. "The Eagle Ford play provides not only exposure to light oil, but also to Gulf Coast crude oil markets with established transportation systems."

More information on the Eagle Ford shale can be found on PennEnergy's research area.

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L.A.'s Creative Office Hotspots for 2014

Three commercial real estate experts share with The Hollywood Reporter about how they would cast their votes for Los Angeles' next wave of entertainment office deals:

George Garfield, President, West Region, Transwestern:

Perhaps the hottest entertainment real estate story of 2013 came from L.A.'s nontraditional entertainment firms. As we look at the Internet's influence on entertainment, this is the most interesting: Online distribution platforms for YouTube, Netflix and Amazon Studios shook up the scene with plans to produce branded content separate from that of TV, cable and movie studios. They require their own kinds of studios and are among the largest new space users in the city. YouTube Space LA in Playa Vista is a prototype of creative studios set within formerly obsolete buildings. And there is new office demand from digital media firms and advertising agencies looking to capitalize on the growth of these nontraditional studios. Santa Monica and the Lower Westside are still hot markets. But 2014 might be the year that the Hollywood submarket takes off, with increased development on Sunset Boulevard near Sunset Gower Studios, as well as Hollywood and Downtown.

Additionally, large studios will continue consolidation into real estate footprints they own and control. For example, as Comcast completes its acquisition of NBC Universal, it too may consolidate Los Angeles operations. Following Comcast's recent purchase of 10 Universal City Plaza -- the 35-story tower adjacent to Universal Studios -- additional NBC Universal personnel moved into the building. Such moves may serve as an example of how consolidation could proceed in 2014 and the years to come.

STORY: Silicon Beach Boom Hits the Playa Vista Housing Market

Andrew Jennison, Partner, Industry Partners:

When vacancy rates for true creative and soft creative space in Santa Monica hover around 6 percent, then the natural migration is for tenants to look east and west at options that are potentially more abundant and less expensive. A typical tenant evaluating the marketplace will strongly consider relocating out of their desired geographic if there is a $0.30-$0.50/square foot savings in rent. Right now, I envision more creative tenants will consider tertiary markets for creative space given the lack of availability on the Westside. The submarket I see attracting creative tenants this year are El Segundo and DTLA. Both offer unique creative options at a very competitive price point. For so many years, DTLA was never considered an option unless you were in the service business. With all of the real estate activity taking place there -- residential, hospitality like the Ace Hotel and the influx of restaurants -- it is becoming a lively epicenter. Businesses see the transformation and know about it and will respond to it by moving their offices there.

Eric Sussman, UCLA School, senior lecturer, Ziman Center of Real Estate, UCLA Anderson School of Management:

There is no question that downtown L.A. is going to be super hot and a magnet for entertainment tenants. It has got a coolness factor -- these are the kind of tenants who don't just want vanilla shell, yawner office space. It has to have polished concrete floors, open space and exposed vents -- that kind of thing. Downtown L.A. is getting that cool factor, and you combine that with a 15 percent vacancy rate and reasonably affordable high-density housing, and it makes sense they you're going to see creative office deals there this year.

Playa Vista also hits a lot of those factors. It's the whole package, with that cool factor and office space that isn't your dropped-ceiling, traditional tower thing. That's another area where we're likely to see more deals this year.

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New Line Cinema to Move to Warner Bros. Lot

New Line Cinema will move onto the Warner Bros. lot in Burbank in June 2014, taking over offices formerly occupied by Legendary Entertainment.

The Warners-owned studio, which produced Oscar Award-winning The Lord of the Rings trilogy as well as Wedding Crashers, Horrible Bosses and We're the Millers, has operated out of a Los Angeles headquarters at Robertson Plaza in West Hollywood.

STORY: Comcast Purchases Universal's 'Black Tower' Building

The separate offices date back to New Line's origins as an independent studio run by Bob Shaye and Michael Lynne, who left the company in 2008 as its operations were folded into Warner Bros. 

Now New Line, run by Toby Emmerich, is preparing to move into the plush offices of building 76, which was used by Warner Bros. Records from the late 1950s until 1978 and later, during the 1980s, housed offices for producer Paula Weinstein, James Garner and John Travolta. Most recently, Thomas Tull's Legendary Entertainment occupied the building until its high-profile breakup with Warner Bros. last year. 

Tull signed a deal with Universal and moved the studio to The Pointe, a LEED Gold-certified office tower located less than a mile from the Warner Bros. lot.

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Noble to farm out part of Leviathan interest

Noble Energy Inc. has signed a nonbinding memorandum of understanding regarding the sale of 9.66% interest in the Leviathan licenses offshore Israel to Woodside Petroleum Ltd.

Leviathan’s current partners—Noble Energy, Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration—are each participating as sellers of 25% interest in the licenses to Woodside.

Noble will continue as upstream operator with 30% working interest. Following completion of the transaction, Woodside will become the operator of any LNG development of the field.

The Leviathan project is on the Rachel and Amit licenses offshore Israel in 5,550 ft of water. It is thought to contain 19 tcf of discovered natural gas resources.

Total compensation to Noble is expected to include $525 million in cash payments, including $390 million payable at this year’s closing of the transaction, plus $502 million in shared future revenues.

Noble started drilling at Leviathan in 2010 (OGJ Online, Oct. 19, 2010), later estimating production of as much as 750 MMcfd for Israel via a northern entry point in 2016 (OGJ Online, Dec. 7, 2012).

Working interests in the Leviathan project after the transaction is complete will be Noble 30%, Woodside 25%, Delek Drilling 16.94%, Avner Oil Exploration 16.94%, and Ratio Oil Exploration 11.12%.

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Woodside closes in on entry to deepwater Leviathan gas project offshore Israel

Offshore staff

PERTH, Australia – Woodside has moved a step close to taking an interest in the giant Leviathan gas field offshore Israel.

The company has agreed to a non-binding memorandum of understanding with operator Noble Energy Mediterranean and partners Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration (1992).

This could lead to Woodside acquiring 25% of the petroleum licenses containing Leviathan, 349/Rachel, and 350/Amit. Negotiations are expected to be completed by March 27.

Noble estimates the field’s 2C contingent resource at 18.9 tcf (535 bcm) of natural gas and 34.1 MMbbl of condensate. Water depth is around 5,500 ft (1,676 m).

Woodside would operate any LNG development of the field, while Noble Energy would remain upstream operator.

The MoU contemplates supplying gas for Israel’s domestic needs, LNG exports, and supply to neighboring countries. It could involve the following conditional payments:

$850 million upon completion of the transaction under a fully termed agreement$350 million on a final investment decision for an LNG development or payments of up to $350 million on predetermined export project milestones5.75% of Woodside’s wellhead export gas revenue, taking effect after at least 2 tcf (56 bcm) have been exported from the Leviathan field, and capped at $1.3 billionA royalty payment of 2.5% on commercial oil production from the deep prospect in the Mesozoic, following payback of development costs.

These transactions remain subject to execution of a fully termed agreement and regulatory approvals from the Israeli government.

Charles D. Davidson, Noble Energy’s chairman and CEO, said “Woodside…brings extensive global expertise in LNG operations and marketing to the partnership. Their addition to the project will result in substantial added value while also bringing us much closer to when we will be able to sanction Leviathan for development.”

02/07/2014

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