Noble Energy Inc. (NYSE: NBL) said Nov. 23 it will trim its international assets in two deals worth $238 million.

In the Eastern Mediterranean, the Houston-based company is selling a portion of its interest in a block offshore Cyprus to an affiliate of BG Group Plc, which might help with marketing the field’s gas. It’s also shedding interest in fields offshore Israel to comply with the country’s recent regulatory changes.

Noble said it entered a farm-out agreement to sell BG International a 35% interest in Block 12 offshore Cyprus for $165 million. Noble will retain operatorship of Block 12 with a 35% interest.

As a partnership, Noble will continue to run the show while BG is expected to give a boost to selling the field’s resources—as an LNG supply source.

Still, BG bought in to the deal, which includes Noble’s massive Aphrodite natural gas discovery, on the cheap.

The resource value for the farm-out works out to about $0.1 per thousand cubic feet (Mcf), far lower than prices paid for LNG scale gas over the past few years of about $0.5 per Mcf, according to Tudor, Pickering, Holt & Co. (TPH).

“Given the fall in oil prices and oversupply in the LNG market it is not surprising to see lower prices but the magnitude of the fall is surprising,” TPH said.

The valuation of the deal pales in comparison to its enormous resource potential, TPH said. Aphrodite was discovered in 2011 and contains gross mean natural gas resources of about 4 trillion cubic feet (Tcf).

“We would caution that this is just one deal and some of the specifics may have pushed the price down such as NBL’s lack of downstream participation and competition from nearby gas [Israel/Egypt],” TPH said in a Nov. 23 report.

Ultimately, the sale of Cyprus gas assets provides a negative marker for other international gas projects, TPH added.

Noble, Mediterranean, Cyprus, Israel, offshore, BG, Delek

The firm even questions the value of exploration as monetizing gas at $0.6 per barrel of oil equivalent (boe) “cannot justify” the associated risked cost.

LNG

Noble’s venture with such an established partner like BG Group remains the bright spot, outweighing the lighter valuation, TPH said.

In addition to a deep E&P portfolio, the U.K.-based company will soon become an LNG behemoth after closing its merger with Royal Dutch Shell Plc (NYSE: RDS.A).

BG’s expertise in LNG should be “a boon” in determining how the field’s gas will be marketed, TPH said.

“Furthermore, the deal highlights BG’s positive view of supply/demand in the region, despite the recent regulatory overhang and regional gas competition, while the regional partnership could extend beyond Cyprus,” TPH said.

Noble is continuing to work with the government of Cyprus to finalize Aphrodite development plans, said J. Keith Elliott, Noble’s senior vice president of Eastern Mediterranean.

The company has recently commenced gas marketing efforts, primarily targeting customers in Egypt. This includes both “domestic purchasers and underutilized LNG plants,” Elliott said in a statement.

Israel

Offshore Israel, Noble said it will sell its 47% interest in the Alon A and Alon C licenses to Delek Group Ltd. The deal includes the Tanin and Karish fields and has a total deal value of $73 million.

The divestment is an important step in fulfilling Noble’s obligations under the recently-approved regulatory framework in Israel, the company said in a news release.

The development of the Leviathan Field offshore Israel, which is controlled by Noble and Delek, has been stalled due to regulatory issues including antitrust concerns. In order to maintain their stakes in Leviathan, with about 22 Tcf of gas, the companies were instructed to reduce interests elsewhere.

The new regulations will allow Israel to “move to speedy development of Leviathan and the development of Karish-Tanin and open the sea for other exploration,” Israeli Energy Minister Yuval Steinitz told Hart Energy.

Noble will simplify the ultimate sale of Tanin and Karish to a third party, according to the release.

Completion of both transactions is subject to certain regulatory approvals and customary closing conditions and adjustments. The Cyprus farm-out agreement has an effective date of April 1, 2015, and is expected to close before the end of 2015.

Contact the author, Emily Moser, at emoser@hartenergy.com.