Avner, Delek Drilling mull merger, o'seas offering

Delek Group Ltd's (TASE: DLEKG) gas an oil exploration subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L), which are partners in the Tamar and Leviathan discoveries, are considering a merger, according to the two companies' financial reports.

Avner and Delek Drilling each own 15.625% of Tamar and 22.67% of Leviathan, as well as stakes in Yam Tethys, and other offshore natural gas exploration licenses. The company's operate together in many areas, including personnel.

The companies added that the merged limited partnership company was considering an overseas offering. A source close to the subject said that the likeliest markets for an offering were Hong Kong, London, and New York. A foreign offering would given Delek international exposure for its gas exploration subsidiaries.

Delek is also considering bringing in a strategic partner to Leviathan. Their partner in the gas field, Noble Energy Inc. (NYSE: NBL) has said the same thing.

If this plan is carried out, it will be a severe blow to the Tel Aviv Stock Exchange (TASE), which is liable to lose two of the most interesting and traded shares on the Tel Aviv 25 Index.

Delek Drilling's revenue net of royalties rose to $141.7 million in 2011 from $91.1 million in 2010, and its net profit rose to $70.1 million ($0.128 per participation unit) from $50 million. Avner's revenue net of royalties rose to $138.3 million in 2011 from $88.8 million in 2010, and its net profit rose to $67.8 million ($0.02 per participation unit) from $49.5 million.

Avner's royalties paid the government rose to $27.9 million in 2011 from $17.7 million in 2010, and Delek Drilling's royalties rose $42.7 million in royalties from $26.5 million.

Avner's share fell 1.7% by midday to NIS 2,62, giving a market cap of NIS 8.9 billion, and Delek Drilling's share price fell 2.6% to NIS 14.56, giving a market cap of NIS 8.1 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2012

Avner, Delek Drilling mull merger, o'seas offering

If this plan is carried out, it will be a severe blow to the TASE, which is liable to lose two of the most traded shares on the Tel Aviv 25 Index.