Nefta: How Much of Tamar Actually Reaches the Listed Shareholder
A Nefta shareholder is not sitting on 28.75% of Tamar, but on roughly 5.28% through the chain and only about 4.62% of asset-level revenue before the overriding-royalty layer. Even after the Isramco Inc. uplift, the path from the field to the listed share still runs through minorities and distribution gates.
The Number The Main Article Left Folded In
The main article made a simple point: Nefta is not clean Tamar exposure. It is Tamar after a structural filter. This follow-up unpacks that filter into actual numbers. The question here is not whether Tamar creates value. The question is how much of that value clears Isramco Negev 2, overriding royalties, minority interests, and distribution restrictions before it reaches a Nefta shareholder.
The first number to keep in mind is not 28.75%. That is Isramco Negev 2's direct stake in Tamar. For a Nefta shareholder, the first real number is roughly 18.4%, the group's through-chain holding in Isramco Negev 2 participation units. Once the two layers are combined, the result is about 5.28% through the chain. That is the first filter. Anyone reading Nefta as if it owns close to a third of Tamar is reading the wrong layer.
| Layer | Rate | What it represents |
|---|---|---|
| Isramco Negev 2 stake in Tamar | 28.75% | The direct asset layer |
| Nefta's through-chain stake in Isramco Negev 2 | about 18.4% | The unit ownership that actually belongs to the group |
| Share of Tamar rights attributed to Nefta shareholders | 5.28% | The through-chain economic right in the field |
| Actual share of revenue at asset level | 4.62% | After the state royalty and before other payments at company level |
The Tamar table goes one step further, and that is where the important number sits. After the 12.5% state royalty, the share of actual field revenue attributed to Nefta's equity holders falls to about 4.62%. That is the number that strips away the illusion created by a 100% consolidated view. Once the question becomes how much of Tamar's revenue really belongs at the listed-shareholder layer, 5.28% is only an intermediate stop. The cleaner economic base is 4.62%.
Royalties Add, But They Do Not Remove The Filter
This is the part that is easy to miss. Nefta does not stop at 4.62%, because the chain also includes Isramco Inc., which is entitled to certain overriding royalties. The company's dedicated table shows that Nefta's share in the overriding royalty paid from the Isramco Negev 2 general partner and assigned to Isramco Inc. adds about 1.25% before payout and about 2.23% after payout.
What matters is not only the size of that uplift, but the way it is calculated. The royalty flowing to Isramco Inc. does not stay entirely with Nefta, even though Nefta owns 100% of Isramco Inc., because Nefta also owns only about 18.4% of Isramco Negev 2 units. That is why the company's net share of that royalty is only about 81.6%. This is exactly the kind of detail the consolidated statements blur: even when there is a royalty layer that benefits Nefta, it does not bypass the holding structure. It still runs through it.
That is why the full bridge looks like this: 5.28% through the chain, 4.62% of actual asset-level revenue after the state royalty, then a rise to about 5.88% before payout and 6.83% after payout, thanks to the Isramco Inc. royalty layer and after an additional small post-payout offset of about 0.03% tied to the state royalty on Tamar SW. Even in the more generous case, the listed shareholder ends up with economics of less than 7% of Tamar revenue, not anything close to 28.75%.
There is one more important nuance. The company states that this calculation assumes joint gas marketing according to each partner's relative share in the reservoir. If marketing does not track those proportions, the balancing arrangements between Tamar partners can change the annual participation rate in revenue. In other words, even 5.88% and 6.83% are not hard-metal numbers. They are working rates under a specific marketing assumption.
Effective Control, Not Effective Economics
This is where the main gap between what the report presents and what the shareholder actually owns comes from. Nefta consolidates Isramco Negev 2 because it fully owns the general partner, holds about 18.4% of the participation units, relies on the historical voting pattern of unit holders, and is exposed to the partnership's variable returns. That is enough for effective control. It is not enough to turn Isramco Negev 2 economics into economics that truly belong to Nefta shareholders.
The 2025 figures are very clear. Isramco Negev 2 reported net income of NIS 397.3 million, but NIS 324.1 million of that was allocated to non-controlling interests. In other words, about 81.6% of earnings stayed outside the Nefta shareholder layer. The balance sheet tells the same story: out of NIS 1.939 billion of Isramco Negev 2 net assets, about NIS 1.583 billion is booked as the carrying value of non-controlling interests. This is the key accounting bridge in the story. Nefta consolidates 100%, but most of the economics of the consolidated partnership are not its own.
That filter is not just an accounting issue. In May 2025, Isramco Negev 2 declared a profit distribution of about NIS 251 million, and in December it declared another roughly NIS 195 million. Together that is about NIS 446 million. Of that, the non-controlling-interest share of 2025 distributions amounted to NIS 361 million. So even once the cash reaches the distribution stage, most of it still flows to the minority layer, and only the remainder stays in Nefta's pipe.
And that is before the distribution restrictions themselves. Isramco Negev 2's mechanism requires the annual May distribution to be based on the lower of available financial assets and legally distributable profits, after deducting a reserve of up to USD 75 million. On top of that sit clear debt gates: no distribution if it relies on revaluation gains, if it pushes economic capital or tangible equity below USD 800 million, if debt to EBITDA rises above 4x or above 3.5x in one of the series, or if LTV and free-rights tests in the credit framework are breached. This is exactly where Tamar can continue to create value while the value accessible to the listed shareholder remains constrained by Isramco Negev 2's financing architecture.
What Actually Sits At The Parent
It would be easy to think that the final repayment of Series H in January 2025 solves the problem. It solves one problem only: direct parent-level debt pressure. It does not solve the flow question from Tamar to the shareholder.
At the parent and fully owned private-company level, the group had financial assets of about NIS 463 million at the end of 2025. That looks comfortable at first glance, but even here the box needs to be opened. The figure includes about NIS 45 million of restricted short-term deposits held in a US subsidiary of Isramco Inc. In addition, Nefta's share of cash held in trust accounts for former rights holders in Nefta Hipsushim and H.L.N. Yam Hamelach stood at about NIS 60 million. These are assets, but they are not the same as clean cash waiting to be upstreamed to shareholders.
The same logic applies to the private-asset layer. The fair value of investment property in the private companies was about NIS 178 million, and the depreciated cost of fixed assets, mainly European hotels, was about NIS 205 million. Those additional activities generated operating profit of about NIS 23 million in 2025 after G&A and excluding depreciation, down from about NIS 28 million a year earlier. There is real value in that layer, but it is not a substitute for cash distributions from Isramco Negev 2, and it does not turn Nefta into a cleaner Tamar vehicle.
Put differently, Nefta looks easier today at the parent layer, but not simpler at the shareholder layer. The direct parent debt is gone. The structural filter is not.
Bottom Line For The Listed Shareholder
The right way to read Nefta is not through 28.75% of Tamar, but through four stations:
- about 18.4% of Isramco Negev 2 units.
- about 5.28% through-chain rights in Tamar.
- about 4.62% of actual asset-level revenue after the state royalty.
- about 5.88% before payout and 6.83% after payout after the overriding-royalty layer, and only then through minorities and distribution gates.
That is the core difference between reservoir economics and share economics. Tamar can expand, sell more gas, and look very strong in the consolidated statements, while a Nefta shareholder still gets only a smaller, slower, more conditional slice of that improvement. That is why the key question is not only whether Tamar keeps improving. It is whether that improvement can clear all the filters on the way: royalties, minorities, reserves, covenants, and the holding-company structure itself.
That is also why any discussion of Nefta should start with accessibility, not with scale. As long as the reader does not translate the 100% consolidated view into the rate that actually sits with the listed shareholder, they are looking at Tamar, not at Nefta.
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