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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Tel Aviv, February 12, 2013. Delek Group (TASE: DLEKG, OTCQX: DGRLY) is pleased to announce that on February 11, 2013, each of the partnerships subsidiaries, Delek Drilling – L.P. and Avner Oil Exploration – L.P., signed the Production Sharing Contract which is originally dated October 24, 2008 (the "PSC"), granting exploration rights, appraisal, development and production of oil and/or gas in the territorial waters of the Republic of Cyprus, the area known as Block 12, and were granted search license rights – as per the PSC (the "License"). With the above mentioned signature, the transfer of 30% of Noble Energy International Ltd ("Noble Cyprus") rights to the Partnerships was completed, so the Partnerships are now part of the PSC and each one of them holds directly a 15% interest in the License .
Below is a copy of the immediate report published by Delek Energy Systems Ltd.
As a condition of the transfer, the Cypriot government required, under the terms of the PSC , that an unlimited guarantee will be issued for the Republic of Cyprus to ensure compliance with all obligations under the PSC (the "Guarantee"), to be issued by the parent company, i.e. – the Company.
Following the approval of the Audit Committee and Board of Directors, the Company signed a guarantee in return for a payment of a guarantee fee by the Partnerships and the main terms are listed as follows :
A. Starting from the date that the Guarantee is granted, and as long as the Guarantee is in force, the Partnerships will not approve content/s of new planned work/s in Block 12 and / or in connection with any other activity in Block 12 under the joint operating agreement with Nobel Cyprus (the "Work Plan in Block 12") , in absence of: (1) insurance against pollution risks of the activities of the Partnerships in Block 12, to the Company’s satisfaction (insurance loss of control of the well and the responsibility towards third parties), (2) approval of authorized organs at the Partnerships as per the law in terms of engagement with the Company, as described above and below and arrangements concerning the payment of fees guaranteed by the Partnerships to the Company;
B. In addition, the Partnerships have committed that starting from the date the Guarantee is granted and that the Guarantee provisions shall apply are as follows:
It is clarified that the Partnerships have committed to the government of Cyprus that if the government of Cyprus shall, within 90 days of issuing the Guarantee, that the Guarantee of the Company be found not sufficient by the PSC, the Partnerships will work to provide to the government of Cyprus a guarantee of Delek Group Ltd., the parent company of the Company (hereinafter "Alternative Guarantee") within 30 days. Accordingly, the Partnerships have committed to the Company that the terms of the contract as described above will continue to apply even if the guarantee will be replaced by the Alternative Guarantee, in accordance to the requirements of the authorities in Cyprus, and in this case the agreement will be between the Partnerships and Delek Group Ltd.
Percentage holdings in the Block 12 License with the completion of the conversion are as follows:
Further to the Company's immediate reports dated May 13, 2012, and November 15, 2012 (Reference number: 2012-01-000091 and 2012-01-279966, respectively), on the proposal submitted as part of a consortium that includes the Partnerships at the tender published by the government of Cyprus acquisition of exploration rights and production of oil and/or natural gas territorial waters of Cyprus, the Partnerships announced that the Cyprus government publications indicate that the license that the Partnerships in the tender were bidding for was awarded to others and, therefore, the Partnerships believe that their bid is not accepted.“
This is a convenience translation of the recent HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on February 12, 2013.
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.
In addition, Delek has built an extensive network of global downstream assets, including 1,900 gas stations and convenience stores in the U.S., Europe and Israel, and petroleum refineries in the U.S. Delek also holds significant interests in leading water desalination, power generation, insurance and automotive companies.
In 2011, the Company’s revenues were NIS 59 billion. Delek Group’s shares are traded on the Tel Aviv Stock Exchange (TASE: DKLG) as part of the TA25 Index.
 Guarantee as mentioned was required, in accordance with the PSC, from each owner of the rights in the license. Nobel Cyprus also issued such a Guarantee from its parent company. For details of the actions taken in an attempt to reach agreements and indemnification division of responsibility between the owners of the rights, see section B. (4) below.
 The above mentioned engagement between the Partnerships and Delek Energy is subject to the approval of the general meeting of the unit holders in each of the Partnerships except for the conditions as noted in paragraphs B. (3) and C. below.
 The Partnerships will notify Delek Energy in advance on any intention to approve a Work Plan in Block 12.