Tel Aviv, July 19, 2017. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announced that below an immediate report that was published by Delek Drilling Partnership Limited is provided with an update regarding Leviathan 5 and Leviathan 7 wells.
Further to section 7.5.4 of the Partnership's immediate report of December 31, 2016, as published on March 23, 2017, regarding Leviathan 5 appraisal and production well ("Leviathan 5 Well") and Leviathan 7 appraisal and production well ("Leviathan 7 Well") in a single batch, the Partnership hereby announces that Leviathan 5 Well is expected to be completed soon, after reaching the final depth planned and verification of the existence of natural gas in three layers of the Leviathan reservoir (Sands A, B and C), according to the preliminary appraisal of the operator of these wells, Noble Energy Mediterranean Ltd. ( "the Operator").
The Operator notified the Leviathan partners that since the results of the tender recently received indicate the possibility of contracting with a drilling rig at significantly lower costs than those of the Atwood Advantage rig, it recommends ending the contract with Atwood Advantage in accordance with the terms of agreement with it after completion of the Leviathan 5 Well and continuing the drilling of the lower part of Leviathan 7 Well with an alternative drilling rig ("the Drilling Rig").
Accordingly, on July 18, 2017, the Leviathan partners made a decision with regard to ending the contract with Atwood Advantage and promoting a contract with the Drilling Rig, which will drill the lower part of both Leviathan 7 Well and Leviathan 3 Well to their final depth, as from the first quarter of 2018, and then to complete the production drilling in the Leviathan project. Note that the Drilling Rig will be fit, among others, to drill deep targets, if such deep target drilling in the Leviathan leases is approved by the Leviathan partners.
Note that, as of the date of this report, and as the Operator informed the partners, the cost of the Leviathan 5 Well and drilling the upper part of Leviathan 7 Well is expected to amount to USD 106 million (100%), out of the total budget for these wells, as approved in the past by the Leviathan partners, of USD 148 million (100%) .
Stage 1A development in the Leviathan reservoir development plan is progressing according to the time schedules and budged approved by the Leviathan partners, with the aim of allowing natural gas from the Leviathan reservoir to start by the end of 2019.
Partners in the Leviathan reservoir and their percentage holdings are as follows:
|Noble Energy Mediterranean Ltd. ||39.66% |
|Delek Drilling Limited Partnership ||45.34% |
|Ratio Oil Exploration (1992), Limited Partnership ||15.00% |
This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on July 19, 2017.
Delek Group is an independent E&P and the pioneering visionary behind the development of the East Med. With eight consecutive finds in the Levant Basin, 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
1For further information, see the Partnership's immediate reports regarding the decisions with respect to the Leviathan 5 and Leviathan 7 drilling dated December 18, 2016 and March 14, 2017 (Ref. Nos. 2016-01-088926 and 2017-01-020782, respectively). It is clarified that the total drilling budget is included in the Leviathan project development budged approved by the Leviathan partners.