Press Releases
<< Back
Decision regarding the Drilling of the Leviathan-7 Development and Production Well
Download PDF Download PDF
Tel Aviv, March 14, 2017. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that below is an Immediate Report published by each of Avner Oil Exploration Limited Partnership and Delek Drilling Limited Partnership (jointly “the Partnerships”) concerning the decision to drill the Leviathan-7 development and production well.

Further to the provisions of Section 7.5.9(a)(5) of the Partnerships’ periodic reports as of December 31, 2015, as released on March 28, 2016 (the “Periodic Reports”) regarding the updated development plan for the Leviathan reservoir which is located in the area of the I/14 Leviathan South and I/15 Leviathan North leases (the “Development Plan” and the “Leviathan Project” or the “Leviathan Reservoir”, respectively), of the immediate reports of June 2, 2016 regarding approval of the Development Plan by the Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water Resources (the “Commissioner”), of the immediate reports of December 18, 2016 regarding the decision of the Leviathan partners to drill the “Leviathan-5” appraisal and production well (the “Leviathan-5 Well”), and the immediate reports of February 23, 2017 regarding the adoption of a final investment decision (FID) for the development of the Leviathan Reservoir, the Partnerships respectfully announce that on March 13, 2017, the Leviathan partners made a decision regarding the drilling of the “Leviathan-7” development and production well in the area of the I/14 Leviathan South lease (the “Leviathan-7 Well” or the “Well”).

Set forth below are further details regarding the Well:

  1. The date on which the decision regarding the drilling of the Well was made: March 13, 2017.

  2. Reasons for the decision:
  3. Noble Energy Mediterranean Ltd. (“Noble” or the “Operator”) recommended that the Partnership drill at this time an additional development and production well in the Leviathan Reservoir, as an integral part of the Leviathan Reservoir production wells, in the framework of the Development Plan. By drilling the Leviathan-7 Well in a batch with the Leviathan-5 Well, it will be possible to streamline and reduce the cost of the drilling of these two wells.

  4. Conditions to the drilling of the Well and to participation in the drilling thereof: The Commissioner has approved the Development Plan, as specified in the Partnership’s immediate report of June 2, 2016, whereby, inter alia, the Leviathan-7 Well will be drilled as a development well and later connected as a production well to the Leviathan Project’s production system. The Operator has received the approvals required from the Commissioner and the Ministry of Environmental Protection, including for a drilling plan for the first stage, as specified in Section 6 below, for a piping permit, and for a pre-drilling environmental impact assessment survey. It is noted that the drilling rig that will drill the Well is the Atwood Advantage, which is currently working in the “Tamar-8” development and production well, as specified in the immediate report of July 3, 2016 (ref. no.: 2016-01-072463) (the “Tamar-8 Well”), which is expected to be completed (including completion and connection to the production system) in the coming weeks. According to the Operator’s reports, the rig meets the various requirements determined by the Commissioner and the Ministry of Environmental Protection.

  5. Name of the Well: “Leviathan-7”.

  6. Location of the Well: Offshore well, approx. 120 km west of Haifa.

  7. The drilling dates: Since the Leviathan-7 Well will be drilled in a batch with the Leviathan-5 Well, and in order to increase the efficiency of the activity, according to the Operator’s recommendation, the two wells will be drilled in the following order: at the first stage, the upper part of the Leviathan-7 Well will be drilled to a depth of approx. 2,900 meters below sea level; at the second stage, the drilling rig will be moved to the Leviathan-5 Well site, where it will drill this well to a final depth of approx. 5,200 meters below sea level; at the third stage, the drilling rig will be returned to the Leviathan-7 Well site, where it will drill the lower part of this well to a final depth of approx. 5,100 meters below sea level. It is noted that the Leviathan wells will be completed and connected to the production system on another date, in accordance with the Development Plan. The drillings are expected to commence immediately after completion of the Tamar-8 Well, and to take approx. seven months in the aggregate (Leviathan-5 and Leviathan-7 together, excluding their completion and connection to the production system).

  8. The target layers in the Well: Oligo-Miocene layers.

  9. The Well’s type, purpose and future stages that are dependent on its findings: A development and production well intended to form an integral part of the Leviathan Reservoir production wells, in the framework of the Development Plan.

  10. Depths: The depth of the water at the drilling site is approx. 1,630 meters, and the final depth planned for the Well is approx. 5,100 meters below sea level.

  11. Budget: The total (100%) drilling budget is approx. U.S. $71 million (excluding the cost of completion thereof and connection to the production system of the Leviathan Reservoir). It is noted that the drilling budget as aforesaid is included in the budget for development of the Leviathan Project, as approved by the Leviathan partners, as specified in the Partnerships’ immediate reports of February 23, 2017.

  12. Name of the Operator: Noble.

  13. Name of the corporation drilling the Well: Noble.

  14. The share of the holders of the equity interests of the Partnership in the drilling budget: 22.67%.

  15. The share of the holders of the equity interests of the Partnership in the possible income deriving from the Well: 18.48%, taking into account the royalties paid to the State, affiliates and others.

  16. The names of the partners in the petroleum asset in which the Well will be drilled and their share in the drilling budget:

  17. Names of the Partners

    Share of Each Partner in the Drilling Budget

    Avner Oil Exploration Limited Partnership

    22.67 %

    Delek Drilling, Limited Partnership

    22.67 %

    Noble

    39.66%

    Ratio Oil Exploration (1992), Limited Partnership

    15 %

    Delek Group economic interest

    25.65%


  18. Reference to the description of the petroleum asset in the Periodic Reports: For a description of the petroleum asset, see Section 7.5 of the Periodic Reports.

Warning regarding forward-looking information – The budget and the timetables for the drilling of the Well, including the order of the drilling of the Leviathan-5 and Leviathan-7 wells, receipt of the approvals for the drilling thereof, and the possibility of its completion and its connection to the production system of the Leviathan Project in the framework of the Development Plan, are based on estimates and conjectures received, inter alia, from the Operator, and which are forward-looking information, as defined in the Securities Law, 5728-1968. The said estimates and conjectures constitute professional estimates and conjectures, in respect of which there is no certainty and they may subsequently be updated as the actions in the Well progress. The above estimates are based, inter alia, on geological, geophysical, techno engineering and other information, accumulated, inter alia, from the seismic survey performed in the area of the Leviathan leases, and may be materially different from the said estimates and conjectures, inter alia as a result of geological conditions and/or operating and technical conditions and/or regulatory changes and/or the Leviathan Reservoir’s actual performance. The said estimates and conjectures may be updated insofar as additional information is accumulated and/or as a result of a gamut of factors relating to petroleum and natural gas exploration and production projects, including as a result of the performance of the actions in the Well and their results, and as a result of operating conditions and/or market conditions and/or regulatory conditions.

The partners in the Leviathan Reservoir and their holding rates 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%
Delek Group economic interest 25.65%

This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on March 14, 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


Contact

Investors

Dina Vince
Head of Investor Relations
Delek Group Ltd.
Tel: +972 9 863 8444
investor@delek-group.com

Media

Nilly Richman
Head of Communications
Delek Group Ltd.
Tel : +972 9 863 8444
media@delek-group.com

All contents © 2010 Copyright 2010 Delek Group. All rights reserved