Delek Group
Ltd's oil and gas exploration units Avner Oil and Gas LP and Delek
Drilling LP reported progress in bringing in a new strategic partner to
the Leviathan field, which they jointly own with Noble Energy Inc. and
Ratio Oil Exploration (1992) LP.
The Leviathan partners want a
strategic partner to finance the continued development of the field. They want
a partner experienced in liquefied natural gas (LNG), as a large proportion of
the Leviathan gas field is slated for export.
Russia
's Gazprom and
France
's Total are reportedly among the
serious contenders for investing in Leviathan.
The aggregate net profits of Avner
and Delek Drilling fell 64% to $4 million for the second quarter of 2012 from
an aggregate $11.1 million for the corresponding quarter of 2011. The two
companies' net profits fell to $8.7 million in the first half from $25.2
million in the first half of last year.
The two companies' aggregate natural
gas sales, net of royalties, fell 55% to $16.3 million for the second quarter
from $36 million for the corresponding quarter. Gas sales, net of royalties,
fell 39% to $37.4 million in the first half from $61 million in the
corresponding half. The reduction in revenue and profits was due to lower gas
deliveries to customers from the Yam Tethys project, due to sharply lower
production capacity by the Mari B well.
Avner and Delek Drilling said that
the reduction in Mari B's production capacity was due to force majeure, as
defined in their gas supply contracts with their customers.
Avner CEO and Delek Drilling
chairman Gideon Tadmor said, "We're on schedule for the development of the
Tamar project, which is almost completed, on time and on budget. The financing
we recently secured increases certainty and allows the partnerships to realize
our strategic plans, both in terms of support for development of the domestic
gas market, and review of export options."
Delek Drilling CEO Yossi Abu,
"Closing the financial package for the Tamar project and completion of the
terms for withdrawing the balance of money for the financing on the basis of
the Leviathan project brings us to a new era that is full of opportunities. Alongside
the continuing rapid development of Tamar and the drawing up the development
plan for the Leviathan project, we intend to expand our exploration
activity."
Avner and Delek Drilling reported
that gas output from the Mari B and Noa wells fell to 3.39 million cubic feet
of gas in the second quarter from 6.09 million cubic feet of gas in the
corresponding quarter. The average price of gas per output unit rose to $5,460
during the second quarter from $4,520 during the preceding quarter, and the net
receipts were $4,200 per million cubic foot.