The following updates are based on information released by Delek Group gas subsidiaries, Delek Energy Systems Ltd., Avner Oil & Exploration L.P and Delek Drilling L.P. All financial and business information is given only for the convenience of the reader. The only official financial and business information, is that which is included in the officially published immediate reports and financial reports of Delek Group and its gas subsidiaries, to the Israeli Securities Authority and the Tel Aviv Stock Exchange, in Hebrew. In the event of any conflict between financial and business information given on this site and the Hebrew published immediate reports, the Hebrew published immediate reports shall prevail. More on Delek Group's disclaimer.
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|Amended Agreement Signed with IEC and Negotiation with other Consumers|
Tel Aviv, July 22, 2012. Delek Group (TASE: DLEKG, OTCQX:DGRLY) ("the Company") subsidiaries, Delek Drilling L.P. and Avner Oil Exploration L.P. (together "the partnerships") both published immediate reports. It concerns the approval of the agreement to supply natural gas, between the Israel Electric Corporation Ltd. ("IEC") and the Tamar partners (including the partnerships), by the audit committee and Board of Directors of the IEC. This is following the implementation of requested changes which were required by the Public Utility Authority - Electricity and Antitrust Authority. The amendment to the agreements of the supply of natural gas to IEC was signed today –and the following immediate report was published by the partnerships;
1. Further to the immediate reports dated 17.06.2012 with regard to the Public Utility Authority and the Antitrust Authority decisions, the partnerships are pleased to announce as follows;
On July 22, 2012, an amendment to the supply of natural gas agreement ("IEC agreement") was signed between IEC and the partners in the Tamar lease (including the partnerships)(collectively, "Tamar Partners"), having implemented the requested changes which were required by the Public Utility Authority – Electricity ("Electricity Authority") and Antitrust Authority.
Under the scope of the amended agreement, the IEC is entitled to exercise two options for increasing the agreed amounts of natural gas. By April 15, 2013, IEC will be able to exercise an option to increase the agreed consumed quantities by the end of 2019; and until April 15, 2015, IEC has the option to increase the agreed quantities which will be consumed from the beginning of 2020, until the end of the agreement.
It was also determined that the relative amounts of natural gas that will be consumed by IEC within the option scope that rises above 24,000 MMBTU per hour ("additional amounts"), the price linkage mechanism will be amended in a way that the price excess calculation, that is paid by IEC for the additional amounts, will be 30% linked to the U.S. CPI. The price paid by IEC for the rest of the quantities, according to IEC agreement, will remain unchanged. The amendment will enter into force on July 25, 2012.
2. In addition, the Tamar partners are working on signing additional amendments to the agreements that between the Tamar partners and other natural gas consumers in Israel, as detailed in the immediate reports dated 09.01.12, 10.01.12, 26.01.12, 12.02.12, 2.04.12, 3.06.12, in order to incorporate the above mentioned amendments as per the Electricity Authority and the Antitrust Authority decisions. The Tamar partners are also managing additional negotiations with other natural gas consumers for additional agreements. Signing the amendments to these agreements and signing additional agreements as they may be, are expected in the coming weeks. After that the partnerships will investigate the scope of the overall impact of the above agreements on the projected cash flow of the Tamar project and the partnerships as published in the annual report for 2011, as amended on 24.05.2012.
Warning with regard to "forward-looking statements" - the aforesaid estimated in relation to the signing of the amendments to the agreements signed between the Tamar partners and other natural gas consumers in Israel, in order to adjust these agreements to the above mentioned Electricity Authority and the Antitrust Authority decisions, and the negotiations conducted with additional natural gas consumers, including the anticipated schedule of their signature, are considered to be forward-looking information as defined in section 32A under the Israel Securities' Law - 1968. It should be noted that there is no certainty that these terms or schedules of this agreement will be signed, and final signing is subject to, among other things, agreement between the sides on all terms of each of the agreements, as well as the receipt of approval from the relevant organizations and any other approvals required by law, as may be necessary.
Percentage holdings in the Tamar Leases are as follows:
This is a convenience summary of the recent HEBREW immediate reports issued to the Tel Aviv Stock Exchange by the Company on July 20, 2012 and July 22, 2012.
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 33 TCF .