The first quarter financials of the Israeli energy partnerships that hold 60% of the right in the Tamar reserve show that in the January-March period 1.7 BCM (billion cubic meters) of gas was sold from the reserve, yielding the partnerships aggregate revenue of $211 million. This translated into an aggregate net profit of $88 million for the three partnerships: Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), Avner Oil and Gas LP (TASE: AVNR.L), and Delek Drilling (TASE: DEDR.L).
Isramco holds 28.75% of Tamar. Its first quarter revenue from its share in the project was $97 million. For Avner and Delek Drilling, both of Yitzhak Tshuva's Delek Group, and each of which holds 15.625% of the reserve, revenue was $57 million each.
The largest customer for gas from Tamar in the quarter was Israel Electric Company, which consumed 56% of the gas produced. The remainder was supplied to private power producers, industrial companies, and companies that on-sell natural gas. The largest private customer was Israel Corporation (TASE: ILCO), controlled by Idan Ofer, which buys gas from the reserve for Dead Sea Works, the new OPC power plant in the Negev, and Oil Refineries Ltd. (TASE:ORL) in Haifa.
The average selling price of the gas is estimated at $6 per MMBTU (million British thermal units), representing a slight rise in comparison with 2013 prices, which averaged $5.8 per MMBTU.
The rate of royalties that the partnerships must pay the State of Israel on the sales is 12.5%. Altogether, they paid some $25 million on their quarterly revenue.
Isramco made a net profit of $51.3 million in the quarter, Delek Drilling $18.9 million, and Avner $17.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2014
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