Development of Leviathan Field to Produce Natural Gas by End of 2019 - DELEK GROUP

Tel Aviv, December 12, 2016

Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) provides below an Immediate Report published by each of Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership ("the Partnerships") concerning the decisions taken for development of the Leviathan Field in order to produce natural gas by the end of 2019.

Pursuant to what was stated in the Partnerships' Annual Reports dated December 31, 2015 that were published on March 28, 2016 ("the Annual Reports") concerning the updated development plan for the Leviathan Field ("the Development Plan"), and having received the regulatory approvals and progress in the technical agreements concerning development of the Leviathan Field, including approval of the Development Plan by the Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water Resources, as stated in the Immediate Report dated June 2, 2016, 

entering into an agreement to receive Front End Engineering Design (FEED) services for the production platform as approved in the Development Plan, as stated in the Immediate Report dated June 22, 2016, 

Press Release - Update with Regards to Natural gas supply agreements from the Tamar project | Delek Group

Tel Aviv, Tuesday, December 29, 2015. Delek Group's gas subsidiaries announced that on December 28, 1015, the Antitrust Commissioner ("the Commissioner") made a decision regarding an exemption for the conditions in restrictive arrangements between the Tamar gas reservoir partnership and natural gas consumers, further to the application of the Tamar partners, according to which the Commissioner granted an exemption from a restrictive arrangement in accordance with Section 14 of the Antitrust Law, 1988, which applies to nine agreements for the supply of natural gas signed by the Partnerships in the Tamar project, listed in the decision (the main ones are the agreements with OPC Rotem Ltd., Dorad Energy Ltd., and Paz Ashdod Refinery Ltd.).[1] 

The terms set out in the Commissioner's decision are substantially similar to the terms set out in the preceding decisions, except that it prescribes that the announcement of the reduction of the purchase quantity will be permitted at any time during the period, which will end at the later of the following periods: (a) the period between January 1, 2020 and December 31, 2022 (in the previous decision, the period was between January 1, 2018 and December 31, 2020); or (b) the period starting at the beginning of the fifth year from the date of natural gas supply and ending at the end of the seventh year ("The Commissioner's New Decision").

The receipt of the Commissioner's New Decision fulfilled the precondition in the agreements related to the decision, which required the Commissioner's approval.

The Tamar partners will take steps to amend the purchase agreements with these consumers in accordance with the Commissioner's New Decision.

The Partnership believes that the Commissioner's New Decision is not expected to have a material effect on the Partnership's projected cash flow from the Tamar project.

For more information please see the immediate reports as published on TASE:
http://maya.tase.co.il/bursa/report.asp?report_cd=1011141

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