BP and ADNOC's $2 Billion Bid for Israeli Gas Stake on Track
BP plc’s BP senior executive assured investors on Wednesday that the $2 billion joint bid with Abu Dhabi National Oil Co (“ADNOC”) to acquire a 50% stake in Israeli gas producer, NewMed Energy, is progressing as planned, despite the ongoing Israel-Hamas conflict, per a Reuters report.
Per the report, at a presentation in Denver, BP's head of Gas and Low Carbon Energy, Anja-Isabel Dotzenrath, expressed the company's confidence in the deal, stating that it maintains a "very optimistic" outlook regarding the deal.
The joint venture between ADNOC and BP was perceived as a significant milestone to enhance economic ties between Israel and the United Arab Emirates, following the historic normalization of relations in 2020. However, even though BP and ADNOC stand firm in their commitment to the deal at present, a surge in civilian casualties resulting from the war could potentially introduce political complications for the United Arab Emirates, which could, in turn, influence the deal's future course.
NewMed Energy stands as the largest shareholder in Israel's Leviathan offshore gas field, holding a substantial 45.3% stake, while Chevron Corporation CVX serves as the operator and holds the majority ownership with a 39.7% stake. The deal was already brought into doubt last week, when a NewMed-appointed independent panel recommended an increase in the asking price by 10% to 12%, potentially amounting to around $250 million.
According to the report, BP and ADNOC express their commitment to the deal, even in the light of recent events. The non-binding offer outlines their intention to secure 45% of NewMed's publicly traded shares, in addition to the 5% presently held by the Israeli conglomerate, Delek Group. This acquisition arrangement would leave Delek with the remaining 50%, leading to the privatization of NewMed Energy.
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
A couple of better-ranked stocks in the energy sector are Matador Resources Company MTDR and Pioneer Natural Resources Company PXD, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources is among the leading oil and gas explorers in the shale and unconventional resources in the United States. The company’s prime intention is to create more value for shareholders and generate lucrative returns from the capital invested in unconventional plays. MTDR has witnessed upward earnings estimate revisions for 2023 and 2024 over the past seven days.
Pioneer Natural Resources is a leading upstream energy firm with primary operations in the Permian basin, which is among the lucrative oil shale plays in the United States with fewer risks. Its total holding of more than 1 million net acres in the Permian basin will support long-term oil production growth. PXD has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days.
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BP p.l.c. (BP) : Free Stock Analysis Report
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