Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG), whose share price has fallen 30% this year, today reported that its net profit had risen steeply to NIS 1.024 billion in the third quarter. NIS 873 million of this came from the sale of 9.25% of Delek Drilling Limited Partnership's (TASE: DEDR.L) holding in the Tamar natural gas reservoir to the Tamar Petroleum partnership. Delek Group's net profit in the third quarter of 2016 was NIS 85 million.
Delek Group also announced that it intended to cash in its super royalties from the Tamar and Dalit reservoirs in the near future. The super royalty rate of Delek Group and Delek Energy Systems Ltd. (TASE: DLEN) from Tamar is projected to rise from 1.5% overall (the super royalty rate from the Tamar reservoir held by Delek Group and Delek Energy) to 6.5% as soon as the companies have made back their investment in the Tamar reservoir. The super royalties are expected to be drawn by transferring the right to them from the company to a special purpose vehicle, after which the special purpose vehicle company will hold an IPO on the Tel Aviv Stock Exchange (TASE), or through a sale to a third party.
Concerning possible exports of Israeli gas to Egypt, Delek Group announced that no change had occurred in the partners' assessments of the possibilities of exporting gas, and that the negotiations between the parties aimed at signing a major long-term export agreement are still taking place.
An up-to-date independent report by global firm Wood Mackenzie about the projected supply and demand from Egypt in the coming years shows demand for natural gas in Egypt is likely to substantially exceed the local demand there, even if the Zohr reservoir is fully developed according to the new timetable set for it. The report predicts a shortage of natural gas in Egypt in the coming years. These figures support the partners' existing assessments that Egypt continues to be an important target for gas exports from Tamar and Leviathan.
When the board of directors approved the financial reports, it also approved the distribution of a NIS 120 million dividend to the shareholders.
Commenting on his group's reports, Delek Group CEO Asi Bartfeld said, "We are finishing the third quarter of the year with a peak profit of over NIS 1 billion, which is consistent with the group's strategy of focusing on energy and expanding in the international markets. The deal for selling Phoenix is progressing according to the milestones set in the agreement between the parties, and we hope that within a short time, it will obtain the regulatory permits necessary to complete it."
Published by Globes [online], Israel Business News - www.globes-online.com - on November 29, 2017
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