Delek buys 20% Ithaca Energy stake for $66m

Yitzhak Tshuva  picture: Bloomberg
Yitzhak Tshuva picture: Bloomberg

The Israeli company will be the largest single shareholder in the North Sea energy exploration and production company.

Delek Group Ltd. (TASE: DLEKG) announced today that it has bought a 20% stake in international gas and oil exploration and production company Ithaca Energy Inc. (AIM: IAE; TSX: IAE). The Israeli company is paying $66 million for its shares, which makes it the largest single shareholder in the company, which operates in the North Sea.

Delek will finance the investment from its own sources. The company's controlling shareholder Yitzhak Tshuva and CEO Asi Bartfeld see this move as a strategic investment in the international market. Delek will be entitled to appoint two directors to the board and will in the future consider increasing its investment in Ithaca Energy.

Traded on the London and Toronto stock exchanges, Ithaca Energy is a gas and oil exploration and production company with gas and oil assets in the North Sea and major exploration licenses. The company has a market cap of $222 million and equity of $861 million.

Ithaca is involved in 11 successful gas and oil exploration projects and is the license operator in three of them. One of these projects is in advanced development and will begin production in mid-2016. The company has proven 2P oil reserves of 70 million barrels and 12,000 barrels of oil equivalent per day.

Bartfeld said, "This deal is a direct continuation of the Group's declared strategy of focusing operations on energy in Israel, while creating a stable and strong operating arm in the international energy market. This is an important step in expanding our operations in the international market and diversifying the Group's activities in gas and oil exploration and production and developing new opportunities for the Delek Group."

Ithaca CEO Les Thomas said, "We are pleased to have secured Delek's investment in the Company at a significant premium to the prevailing share price at this time of uncertain oil prices. The investment provides a solid vote of confidence in the long term value of Ithaca by a successful oil and gas investor and provides additional flexibility to execute the financial and strategic priorities of the business."

Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Yitzhak Tshuva  picture: Bloomberg
Yitzhak Tshuva picture: Bloomberg
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