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Engagement in a Non Binding LOI between Leviathan Partners and BG International Ltd. for the Export of Natural Gas
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Tel Aviv, June 29, 2014. Delek Group (TASE: DLEKG, OTCQX: DGRLY) ("the Company") is pleased to announce further to what was stated in section 1.7.14 (B)(1) in the periodic report of the Company dated March 31, 2014 (Reference No. 2014-01-030843), included below an Immediate Report of the partnerships Avner Oil Exploration - Limited Partnership ("Avner") and Delek Drilling - Limited Partnership ("Delek Drilling") (together the "Partnerships"), with regard to the engagement of a non-binding letter of intent between Leviathan partners to BG International Limited for the export of natural gas.

Further to what was stated in section 7.14.2(A) of the Partnerships Periodic Report dated December 31, 2013 which was published on March 18, 2014 ("the Periodic Report"), with regard to managing contacts and / or negotiations by the partners in "Leviathan South" I/14 and "Leviathan North" I/15 leases, including the Partnerships (the "Leviathan partners" and "Leviathan Project", respectively) with various parties with regard to natural gas export from Leviathan Project, the Partnerships are pleased hereby to announce as follows:

On June 27, 2014, a non-binding Letter of Intent ("LOI") was signed between the Leviathan Partners and BG International Ltd. ("BG"), in which the parties confirmed their intent to negotiate an agreement for the supply of natural gas (the "Binding Agreement") from the Leviathan Project to BG, in order to supply BG's existing facilities in the Idku city in Egypt (the "LOI").

The LOI includes several commercial conditions for the Binding Agreement. The estimated scope of the Binding Agreement is for the supply of 7 BCM (billion cubic meters) per annum for a period of 15 years. The supply of gas will take place from the FPSO and planned to be connected to the LNG facility as mentioned above through a subsea pipeline. According to the LOI the price of gas sold in the Binding Agreement will be determined in a formula as to be agreed by the parties.

It is clarified that the LOI is not binding (except for exclusivity for a certain period as agreed in the LOI) and the transaction stated above shall be subject to completion of negotiations between the parties and signing of the Binding Agreement. As of the date of this report, the parties estimate that the Binding Agreement will be subject to several contingent terms, including the development of the Leviathan Project, which is subject inter alia to binding final investment decisions by each of the Leviathan Partners and to receipt of all required approvals from the authorities in Israel and Egypt.

To the best of the Partnerships' knowledge, BG is a subsidiary of BG Group PLC, a British company that deals in exploration, production, liquefaction, transport, regasification and marketing of natural gas and LNG in more than 20 countries.

Partners in the Leviathan Project and their percentage holdings are as follows:

Noble Energy Mediterranean Ltd. 39.66%
Avner Oil Exploration - Limited Partnership 22.67%
Delek Drilling - Limited Partnership 22.67%
Ratio Oil Exploration (1992) - Limited Partnership 15.00%

Disclaimer concerning forward looking information - the information stated above concerning the forecast signing of the Binding Agreement, the terms of the Binding Agreement and the quantities of natural gas likely to be included in it, are forward looking information in the meaning of the term in section 32a of the Securities Law, 1968, for which there can be no certainty that it will take place, in whole or in part, in the manner stated or in any other manner, and it may take place in a manner materially different from what is described above, and in particular there can be no certainty that the parties shall reach agreement on the terms of the Binding Agreement, since the Binding Agreement shall be signed according to the terms stipulated above or according to other terms, and the Binding Agreement (if it shall be signed) shall be subject to receipt of approval from the competent bodies and receipt of the required authorizations in accordance with Israeli and Egyptian law, as shall be required, and fulfillment of all contingent terms that shall be set in the Binding Agreement, if it shall be signed.

This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on June 29, 2014.

About The Delek Group

The Delek Group, Israel's dominant integrated energy company, is the pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean's Levant Basin into one of the energy industry's most promising emerging regions. Having discovered Tamar and Leviathan, two of the world's largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 37 TCF.
In addition, Delek Group has a number of assets in downstream energy, in water desalination, and in the finance sector.
For more information on Delek Group please visit www.delek-group.com

Contact

Dalia Black / Dina Vince
Investor Relations
Delek Group
Tel: +972 9 863 8444
Email: investor@delek-group.com

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