|Leviathan Final Investment Decision|
Tel Aviv, February 23, 2017. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that pursuant to the Company's Immediate Report dated December 12, 2016 (ref no. 2016-01-138493) concerning the decision of the directors of the general partners of Avner Oil Exploration Limited Partnership and Delek Drilling Limited Partnership (jointly "the Partnerships") to approve the development program for the Leviathan Field in the area of Lease I/14 Leviathan South and I/15 Leviathan North ("the Leviathan Field"), provided below is an Immediate Report issued by each of the Partnerships that on February 23, 2017 the Leviathan Partners including the Partnerships took the Final Investment Decision (FID) for the development of Phase 1A in the development plan of the Leviathan Field, with an annual capacity of 12 BCM, in order to start the flow of natural gas from the Leviathan Field by the end of 2019, as detailed in the attached report.
Asaf Bartfeld, President and CEO of Delek Group: “The final investment decision in Leviathan, following the Natural Gas Outline Plan, is not only a substantial step forward for Delek Group, but a major leap for the Israeli energy industry and economy. Developing Leviathan and pursuing more export agreements, coupled with supply to the domestic market, will ensure energy security for Israel and will add to Delek Group’s stability.”
On February 23, 2017, the Leviathan partners adopted a Final Investment Decision (FID) for development of Phase 1A in the development plan for the Leviathan Reservoir, at a capacity of approx. 12 BCM per year (1.2 Bcf/d), with a budget of approx. $3.75 billion (for 100% of the rights in the Leviathan Reservoir), with the aim of allowing commencement of the piping of natural gas from the Leviathan Reservoir by the end of 2019.
The Partnerships intend to finance its share in the Leviathan Reservoir development costs, inter alia, through credit from a consortium of local and foreign finance providers, as specified in the Partnerships immediate reports of February 21, 2017.
It is noted that upon the adoption of a final investment decision as aforesaid, the contingency pertaining to part of the contingent resources in the Leviathan reservoir is fulfilled, such that to the best of the Partnerships’ understanding, these resources shall be classified as reserves. Accordingly, the Partnerships are acting, together with Netherland, Sewell and Associates, Inc., for receipt of a reserves and contingent resources appraisal report for the Leviathan reservoir and for preparation of updated discounted cash flow figures. Upon receipt of such report and figures, the Partnerships shall release an immediate report accordingly.
Warning regarding forward-looking information - The above estimates in relation to the scope of the budget and the timetables for development of the Leviathan Reservoir, as aforesaid, constitute forward-looking information, within the meaning thereof in Section 32A of the Securities Law, 5728-1968. The said information is based on estimates of the Partnerships and the operator in the Leviathan Reservoir, based on a range of factors, including the development plan and the time tables for implementation thereof, receipt of regulatory approvals, estimated information on availability of equipment, services, costs, and on past experience. The estimates in this report may not materialize or materialize in a materially different manner if changes and/or delays occur in the range of factors specified above, and if the estimates received change, the market conditions change and/or due to a gamut of geopolitical changes and/or operating and technical conditions in the Leviathan Reservoir and/or unexpected factors relating to the exploration, production and marketing of oil and natural gas and/or as a result of the progress of development of the Leviathan Reservoir until completion thereof.
This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on February 23, 2017.
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 40 TCF.
In addition, Delek Group has a number of assets in downstream energy, water desalination, and in the finance sector.
For more information on Delek Group please visit www.delek-group.com