Drilling at the Tau prospect extended to January 2019

December 27, 2018 at 9:00 AM IST

Drilling at the Tau prospect extended to January 2019

Tel Aviv, December 27, 2018. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”)  announces that further to the Company’s Immediate Reports dated January 8, 2018 (ref. no. 2018-01-003307) and July 29, 2018 (ref. no. 2018-01-069795) concerning the exploratory drilling at the “Tau” oil asset (“the Drilling” and “Oil Asset”, respectively), described in section 1.8.6 of Chapter A of the Company’s 2017 Periodic Report (ref. no. 2018-01-031177), and according to the information provided to the Company by the operator, GulfSlope Energy Inc.  (“the Operator”):

  1. Drilling operations on the Tau prospect started on September 13, 2018. The Drilling is designed to test multiple Miocene horizons trapped against a well-defined salt flank.
  2. According to the Operator, during drilling operations, the well encountered difficulties associated with shallow faults above the sub-salt stratum which requires changes to the Drilling plan, and is expected to cause a significant delay in its progress.
  3. As of this time, the Operator has reported to the Company that Drilling operations are continuing and that in its opinion the Drilling is expected to reach the target strata during January 2019.
  4. The Operator has requested the Drilling partners to approve a budget increase of USD 20 million (100%) for the continuation of the Drilling, so that the total cost of the Drilling (100%) will be USD 59 million. The Company's share in the said increase is USD 16million1
  5. In addition, the Operator has updated the Company that in the light of the structural changes in the Drilling, the final depth of the Drilling will be 18,000 feet and will only penetrate the two main drilling targets (M1 and M1A), and will not reach the two secondary, deeper drilling targets (M3 and M4).

Warning of forward looking information: The information above concerning timetables of the progress of the Drilling represents forward looking information in its meaning in the Securities Law, 1968, based on estimates the Company has received from the Operator of the Oil Asset, which are based on working assumptions concerning the rate and manner of progress of the Drilling operations, that might not come about, or come about in a materially different manner than what was expected in advance.

 

Percentage holdings in the rights in the Tau prospect area are as follows:


Delek GOM Investments LLC

 

75%

GulfSlope Energy, Inc.
Texas South Energy, Inc.

 

20%
5%

                                                                                            100%                                           
This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on December 27, 2018.


About The Delek Group

Delek Group is an independent E&P and the pioneering visionary behind the development of the East Med. With major finds in the Levant Basin, including the Leviathan (21.4 TCF) and Tamar (11.2 TCF) reservoirs and others, Delek is leading the region’s development into a major natural gas export hub. In addition, Delek has embarked on an international expansion with a focus on high-potential opportunities in the North Sea and North America. Delek Group is one of Israel’s largest and most prominent companies with a consistent track record of growth. Its shares are traded on the Tel Aviv Stock Exchange (TASE:DLEKG) and are part of the TA 35 Index.
For more information on Delek Group please visit www.delek-group.com


Contact

Investors

Yonah Weisz
Head of Investor Relations
Delek Group Ltd.
Tel: +972 9 863 8443
investor@delek-group.com

 

1 As detailed in the Company’s Immediate Report dated January 8, 2018 (ref. No. 2018-01-003307), as pursuant the joint operating agreement, the Company will be responsible for 90% of the costs and expenses of the first exploratory Drilling to be carried out at each of the prospects until the target depth is reached. This includes full evaluation, sealing and sealing and abandonment costs. according (“Undertaking to Bear Expenses”). The Undertaking to Bear Expenses is limited as follows: (1) In drillings in the first stage - up to USD 50 million; (2) in drillings at other stages, up to an amount equivalent to 115% of the approved budget for each drilling . Additional expenses beyond the above-mentioned ceilings, will be divided in accordance with each party’s percentage share in the asset rights. the joint operating agreement.