Shearman & Sterling has advised HSBC Bank Plc on a $500 million bridge loan for Israeli oil partnerships Avner Oil Exploration LP and Delek Drilling LP. The $250 million loan made to a wholly owned subsidiary of each partnership will help them fund their share of development costs in the Leviathan natural gas field and in other projects under development in the Mediterranean Sea offshore Israel in the Levantine Basin, and is secured against their rights to the Leviathan natural gas field.

At the time of discovery in December 2010, the Leviathan gas field was the largest field ever discovered in the under-explored area of the Mediterranean Sea Levantine Basin. Avner Oil Exploration LP and Delek Drilling LP each hold a 22.67% interest in the Leviathan gas field, while Noble Energy (the Operator) holds 39.66% and Ratio Oil Exploration LP holds 15%.

The partnerships may also use the proceeds of the loans to cover their share of development costs for their other current offshore discoveries in Israel, including the Noa reservoir, a satellite reservoir of the Yam Tethys gas field, and the Tamar reservoir.

This financing provides a substantial limited-recourse loan at a very early stage in the Leviathan project’s development.

The Shearman & Sterling team of lawyers in the firm’s London office included Project Development & Finance partner Ben Shorten, and associates Natasha Kirby and Anna Duncan.

Shearman & Sterling previously advised HSBC Bank Plc in relation to a $430 million 18-24 month bridge loan for Delek Drilling, Avner Oil Exploration and Dor Gas to help the companies finance their share of development costs in the Tamar natural gas field off Israel’s northern coast.