35 Trillion Reasons Why Israel Could Be a Game Changer

Noble Energy's major finds off the coast of Israel and Cyprus may carry you to royalty.

Jan 12, 2014 at 4:04PM


Source: Noble Energy

Not all of us can be born into riches, most of us have to go out and create our own wealth. Turns out we are in luck, as one company's namesake may just be able to lift investors into royalty as Noble Energy's (NYSE:NBL) strategic investments around the world could propel this stock higher.

Only the biggest and best for investors
Just off the coast of Israel and south of Cyprus, Noble Energy has made several of the biggest finds in decades. Noble Energy discovered the Tamar gas field in 2009, which houses around 10 trillion cubic feet of natural gas. Other major finds include the Leviathan field, which houses around 18 trillion gross cubic feet of gas (7.5 trillion net) and the 5 trillion gross cubic feet of gas found near Cyprus. 

The treasure hunt gets even better, with several other major finds bringing the total amount of natural gas discovered in the region to 35 trillion cubic feet. This represents a huge opportunity for Noble Energy, and Israel recently gave the green light for 40% of its gas output to be exported. Being able to export natural gas will allow Noble Energy to access several markets and further increase output capacity.

In Cyprus, Total SA (NYSE:TOT) signed a tentative deal to discuss building an LNG export terminal on the island. Total's commitment is dependent on its exploration efforts in the region, which begin in February. Depending on whether or not Total is able to find recoverable resources in the two blocks off of Cyprus' coast decides if the LNG facility will be created, but if Total is able to replicate Noble Energy's success, then both will be able to take advantage.

Noble is hoping Total goes through with its plans, so it can expand into other markets without having to build its own LNG export facility. Investors will have to wait and see if Total is successful.

Looking for partners
In the Tamar field, Noble Energy is pumping out roughly 750 MMcf/d with the capacity to increase that by an additional 250 MMcf/d. Looking out to 2016, Noble Energy hopes to increase that to 1.5 Bcf/d as more long term contracts justify the expansion. As Noble Energy ramps up production in the area, expect tidal waves of cash to wash over investors.

Monstrous amounts of potential
The Leviathan field holds around 7.5 trillion net cubic feet of natural gas, and will begin production around 2017. While the primary purpose of the gas field is to service Israel's domestic demand, Israel's neighbors want to get in on the action as well. Noble Energy could service Turkey, Jordan, Palestine, Egypt and Cyprus, which could provide demand north of 2 Bcf/d through LNG export facilities and domestic electricity needs. 

A historic moment
Most of the world is aware of Israel's tensions with Palestine, but that didn't stop a historic $1.2 billion deal from being signed. Palestine Power Generation Co plans on purchasing 168 billion cubic feet of natural gas from Noble Energy and its partners (who also have a stake in the Leviathan field) over the course of 20 years. Hopefully this deal will help bring some peace to region while promoting economic cooperation.

Clearly the major natural gas finds are more than just another source of power, it has the ability to reach across borders and open up dialogue, all while making you money. Palestine is going to receive the gas via pipeline, but if Total builds an LNG export facility then Israel will be able to create new economic acquaintances/friendships worldwide.

Foolish conclusion
Who knew hydrocarbons could be a source of peace in the Middle East rather than tension? Israel and Palestine aren't buddies, but at least this is a move in the right direction.

As for your portfolio, Noble Energy's stake in the various fields across the Mediterranean are perfect examples of the first class assets this company owns. Not all of us can be born into riches, but we can always go out and make our own fortune. In my next article I will continue my explanation as to why Noble Energy is worthy of your cash, focusing on Noble's investments in North American shale plays.

Speaking of the Middle East, OPEC better keep its eyes on this company moving forward

Imagine a company that rents a very specific and valuable piece of machinery for $41,000… per hour (that’s almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company’s can’t-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we’re calling OPEC’s Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock… and join Buffett in his quest for a veritable LANDSLIDE of profits!

Callum Turcan owns August 16 call options for Noble Energy. The Motley Fool recommends Total SA. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information