Yitzhak Tshuva is selling off US energy assets to focus on Delek Group Ltd's (TASE: DLEKG) Israeli gas exploration interests. Subsidiary Delek Energy Systems Ltd. (TASE: DEOL) has signed an agreement for the sale of most of its US oil and gas interests for $120 million. The company did not disclose the name of the buyer.
$95 million of the proceeds will be used to repay the loan taken to buy them, and Delek Energy does not expect to report a substantive profit on the sale. $12 million will be placed in escrow when the deal is signed. The company expects to close the deal by June 28.
The deal is for the sale of drilling and production rights to oil wells held by Delek Energy USA Ltd. in Utah which produce 750 equivalent barrels of oil per day.
Delek Energy said that this and previous deals complete the sale of almost all of the company's assets in the US, and that Delek Energy US's remaining assets are insubstantial. The company added that it plans to sell them as part of its plan to focus on its core activities in Israel in view of the natural gas discoveries at Tamar, Dalit, and Leviathan.
Delek Energy subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15.625% of Tamar and Dalit, and 22.67% of Leviathan.
Delek Group's share price rose 2% by mid-afternoon to NIS 874.60, giving a market cap of NIS 9.2 billion, and Delek Energy's share price rose 2% of NIS 1,336, giving a market cap of NIS 6.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2011
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