Delek Leads Rally in Israeli Gas Companies on Egypt Export Deal
(Bloomberg) -- Delek Group Ltd. surged the most in a month after its gas-exploration units signed a supply deal with Egypt as part of Israel’s push to boost regional exports of fuel from its second-largest offshore field.
The shares climbed 5.9 percent as Delek Drilling LP and Avner Oil Exploration LP reached the seven-year accord including exports valued at $1.2 billion in the first three years. Delek Drilling and Avner, partners in the Tamar field, rose at least 8 percent on volumes more than double the three-month daily average. The shares were also supported by speculation Prime Minister Benjamin Netanyahu’s election win will enable the government to push through industry regulations.
“It’s not a small deal and the partners don’t have to invest too much money in development,” Noam Pincu, an analyst at Psagot Investment House Ltd. in Tel Aviv, said Wednesday by phone. “The election results so far also helped quiet fears of a new government undoing Netanyahu’s efforts to resolve the regulatory issues.”
The agreement with Egypt’s Dolphinus Holdings Ltd., announced on Wednesday, marks Tamar’s biggest binding export agreement since the field started supplying the local market two years ago. The companies will export a minimum of 5 billion cubic meters of natural gas in the first three years under the plan, which is subject to Egyptian and Israeli regulatory approvals.
Netanyahu, who won at least 30 seats in the 120-member parliament after the Tuesday vote, appointed a committee to decide on how to regulate Israel’s natural-gas industry in December. The nation’s antitrust authority said the same month it was considering labeling the partnership developing the largest gas field, Leviathan, a cartel.
To contact the reporters on this story: Yaacov Benmeleh in Tel Aviv atybenmeleh@bloomberg.net; Shoshanna Solomon in Tel Aviv atssolomon22@bloomberg.net
To contact the editors responsible for this story: Samuel Potter atspotter33@bloomberg.net Daliah Merzaban, Matthew Brown
Source: http://www.bloomberg.com/news/articles/2015-03-18/israel-s-natural-gas-companies-gain-on-egypt-deal-netanyahu-win
