Noble Energy’s share price sank 6 percent on Tuesday after Israel’s Supreme Court dealt a blow to the company’s multi-billion dollar Leviathan gas project.
According to Reuters, Israel’s Supreme Court affirmed the majority of a plan between Houston-based Noble Energy, Israel-based Delek Group and the Israeli government to extract gas from the giant offshore Leviathan field.
However, the court ruled against stability provisions that would have prevented future administrations from making regulatory changes in the natural gas sector for ten years.
The parties now have one year to draw up an alternative legal mechanism for Israel’s government to provide a stability assurance.
“Noble Energy has consistently maintained that stability is a minimum condition for project development, and our position has not changed. As we have stated before, we will vigorously defend our rights related to our assets to protect shareholder value. It is now up to the Government of Israel to deliver a solution which at least meets the terms of the framework, and to do so quickly,” Noble Energy CEO David L. Stover said.
Noble Energy is targeting a 2019 startup date for the project that holds an estimated 22 trillion cubic feet of natural gas.
The company has not disclosed if the ruling will delay the project.
Israeli Prime Minister Benjamin Netanyahu signed a framework deal last year that would allow Noble and Delek to keep control of the field in exchange for selling some smaller assets, Reuters added.
Shares in Noble Energy were trading at $29.38 per share just after noon on Tuesday, down from $34.36 per share a week ago.