BP (NYSE:BP) and Abu Dhabi National Oil Company said Tuesday they agreed to form a joint venture to acquire a 50% stake in Israeli explorer NewMed Energy (OTCPK:DKDRF) for ~$2B, in a deal that would deepen BP's presence in the eastern Mediterranean.

NewMed Energy, a subsidiary of Israel's Delek Group (OTCPK:DGRLY), is the largest shareholder in the Chevron-operated (CVX) Leviathan offshore gas project, which holds an estimated 22.T cf of recoverable natural gas.

The joint offer would involve acquiring NewMed's free floating shares and taking the company private.

BP (BP) and Adnoc said they plan to explore a range of options for the potential further expansion of their partnership.

BP (BP) is "undervalued and likely to significantly raise its dividend," Skeptical12 writes in an analysis published recently on Seeking Alpha.