Cohen Development and Leviathan: how much of the expansion really reaches shareholders?

The main article already positioned Leviathan as Cohen Development's key medium-term value driver. This follow-up isolates the narrower question: when Leviathan moves from today's capacity tier toward 21 BCM, how much of that value actually travels all the way to Cohen Development's shareholders.

The short answer is that the path is much narrower than the headline. 21 BCM is a stage-one capacity target, with first gas only in the second half of 2029. Even when the extra gas starts flowing, Cohen Development does not receive a direct piece of 100% of the field. It is exposed through two very different channels: a direct overriding royalty on NewMed's Leviathan share, and a thinner indirect exposure to NewMed through Avner. The first can produce real cash, but at a much slimmer economic rate than the 1.4375% headline suggests. The second can lift value and earnings before it lifts much cash.

Timing matters as well. The expansion is not only a story about wells and platform work. It is also a story about exports to Egypt, transport infrastructure, regulatory approvals, and the way NewMed funds its share of the project. So the right question is not whether Leviathan becomes more valuable. That is almost the easy part. The harder question is through which layer, at what pace, and after which filters that value becomes value for Cohen Development shareholders.

This is first and foremost an export story

The first number worth putting on the table is not 21 BCM, but 10.9 BCM. That was Leviathan's sales volume in 2025. Of that figure, only 1.8 BCM went to the domestic market, 2.9 BCM to Jordan, and 6.2 BCM to Egypt. In other words, more than 83% of Leviathan's 2025 sales were already exports, and Egypt alone represented almost 57% of total volumes.

This chart sharpens the core point. Cohen Development is not waiting for the expansion to open export markets. Those markets already exist. The value of stage 1B does not come from turning Leviathan into an exporter for the first time. It comes from potentially pushing much more gas through export channels that are already established and now being widened. That is exactly why the Egypt export amendment with Blue Ocean matters so much. It is not a cosmetic commercial update. It is a bridge between geological capacity and volumes that can actually be sold.

At the same time, the sales mix explains why the expansion cannot be read simply as "another 10 BCM." In 2025, volumes to Egypt actually fell to 6.2 BCM from 7.0 BCM, while volumes to Jordan and the domestic market edged up. That means the next leg depends mainly on restoring and expanding the Egyptian export lane, not only on producing more gas from the reservoir.

21 BCM is a capacity target, not cash already on the way

Leviathan has already gone through one expansion step. Stage 1A was built for roughly 12 BCM per year. In June 2023, partners approved the third-pipeline project, designed to raise capacity to roughly 14 BCM per year. Work on that project continued through 2025 and into the first quarter of 2026, and the annual report says production was reduced and at times halted during those works. On March 1, 2026, Chevron announced that the third-pipeline project had been completed.

This is where stage 1B begins. Under the updated development plan, stage 1 includes three additional production wells, complementary subsea systems, and an expansion of the platform's processing facilities. The total budget is about $2.36 billion, including the $504 million already approved in 2024 for FEED and long-lead items, and the target is first gas in the second half of 2029.

The gap is dramatic. 21 BCM is almost 1.9 times Leviathan's 2025 sold volume, or roughly 10.1 BCM above last year's sales. But that chart must be read correctly. This is production capacity, not volume already sold, not volume already fully contracted, and certainly not volume that already belongs directly to Cohen Development shareholders.

There is even more nuance inside that headline. The January 16, 2026 FID report says stage 1 will raise the platform's installed capacity to roughly 23 BCM per year, but the project's total production capability is expected to rise only to about 21 BCM, partly because of subsea pipeline constraints. In other words, even within stage 1 there is a gap between what the platform can process and what the full system can actually deliver. Stage 2, which would lift total production capability to 23 BCM, still needs additional regulatory approvals and further investments, including a fourth pipeline if required.

That distinction matters a lot for Cohen Development. The market likes to read 21 BCM as if it were a straight line from FID to cash. That is too comfortable a reading. Even if everything moves broadly on plan, the company itself says subsea and platform work during preparation, connection, and start-up may at times reduce production capacity and even temporarily halt production. Before the expansion shows up as higher volumes, it may show up as execution noise.

How the value actually reaches Cohen Development

The next step is to translate Leviathan into Cohen Development's economic structure. That requires separating two channels.

The first channel is the direct royalty. Cohen Development is entitled to royalties of 1.4375% on NewMed's share of oil, gas, and other materials produced from NewMed's petroleum assets. In Leviathan, NewMed's share is 45.34%. So the 1.4375% headline does not apply to 100% of Leviathan. It applies only to NewMed's share. For illustration, that is equivalent to roughly 0.65% of gross sales from the full field on a contractual basis, even before moving to the effective rate.

Note 14 adds the more important layer: in 2025, the company's effective royalty rate from Leviathan gas sales was 1.22% of the partnership's gross sales. On a full-field basis, that brings Cohen Development's direct exposure closer to roughly 0.55% of Leviathan gross sales. That is still a real economic lever, but it is already a much thinner number than the headline suggests.

The second channel runs through Avner. Cohen Development owns 50% of Avner, and Avner owns 0.964% of NewMed participation units. That gives Cohen Development a look-through exposure of roughly 0.482% to NewMed units through Avner. But this is no longer a direct Leviathan royalty. It is exposure to NewMed's value and distributions through an additional holding layer, and it is not cleanly Leviathan-only.

The 2025 numbers show the difference between those two channels clearly. Cohen Development's royalty income from Leviathan was $12.357 million. At the same time, its share of Avner profit reached $12.476 million. On the surface, those are two engines of almost identical size. But only one of them is a direct Leviathan royalty stream. In Avner, the jump in profit mainly reflected the revaluation of NewMed units rather than a surge in cash distributions upstream.

That is exactly the point shareholders need to remember. During 2025, Avner distributed only $2.3 million of dividends, and Cohen Development's share was just $1.155 million. So the Avner route can absolutely lift Cohen Development's book value and reported earnings, but it does not guarantee that cash rises at the same speed. Value through Avner is a slower value channel, and at times also a more market-sensitive one.

Export, infrastructure, and funding are the three filters

The good news is that the commercial leg has already moved forward. Under the Egypt export amendment, total contracted volume increased in two tranches for a combined 130 BCM: an additional 20 BCM once the amendment entered into force, and another 110 BCM subject to the agreed conditions. On January 15, 2026, all the conditions precedent were satisfied, and the export approval for the additional quantities had already been received in December 2025.

But that is only one leg. The second leg is transport infrastructure. The annual report says the EMG pipeline remains the main export line to Egypt, and that a new marine segment between Ashdod and Ashkelon is being built to support further transport expansion, with flow expected to start in the third quarter of 2026. On top of that, the Nitzana project is meant to connect the Israeli and Egyptian systems through the Ramat Hovav and Nitzana corridor. Under the agreements signed in October 2025, Leviathan partners' share in the Nitzana transportation line will be 41.8%, and completion is expected in the second half of 2028.

That means Leviathan's expansion is also a midstream story. Partners can approve FID, secure export authorization, and even raise platform capacity, but to convert gas into sales the gas still has to leave. This matters especially because the export framework itself sets daily and annual maximum export quantities according to the stages of expansion and seasonal domestic demand. So "21 BCM" without "EMG" and without "Nitzana" is only a partial translation of the story.

The third filter is funding. The FID report says NewMed intends to finance its share of development costs, among other things, through internal resources and existing credit lines, while continuing to examine loans from financial institutions, bonds, equity instruments, and other alternatives. This is not a technical footnote. For Cohen Development, it means part of the value created by the Leviathan expansion may remain trapped for several years inside the project itself or inside NewMed's funding layer before it becomes free cash or an easy upstream dividend.

And that takes the analysis back to Avner. If Cohen Development's indirect value route runs through NewMed units, then NewMed's funding structure matters at least as much as the next well. It is entirely possible that value reacts to the FID and the export amendment well before cash reacts. That is not a flaw, but it does mean that anyone following Cohen Development needs to distinguish between value that has been created and value that has already moved up the chain.

Conclusion

Leviathan can create a lot of value for Cohen Development, but not all 21 BCM are 21 BCM of shareholder economics. The direct route runs through an overriding royalty whose true economic rate is much thinner than the initial headline, and the indirect route runs through Avner and NewMed, where value may first appear as mark-to-market uplift and equity income, and only later as dividends.

The practical implication is that Leviathan's expansion is a real medium-term value engine, but it is not a shortcut. For it to become clearly shareholder-relevant at Cohen Development, several things need to happen together: stage 1 has to stay on track for 2029, Egyptian export corridors have to expand in practice, NewMed has to get through the funding layer without choking future upstream cash, and Avner has to show that stronger value at NewMed can translate into dividends and not only into a higher carrying value.

That is where this follow-up answers the headline question. How much of the expansion really reaches shareholders? Less than the headline, more than zero, and mainly through a longer bridge than a first reading suggests.