Friday 24 June 2016

Delek Group (TASE: DLEKG, US ADR: DGRLY) ("the Company") announces that attached is an Immediate Report published by each of Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership ("the Partnerships") concerning an agreement to receive Front End Engineering Design (FEED) services for the Leviathan project production platform.

Pursuant to what was stated in the Partnerships' Annual Reports to December 31, 2015 ("the Annual Reports") concerning the updated development plan for the Leviathan field ("the Development Plan") in the Partnerships' Immediate Report dated May 22, 2016 concerning ratification of the Gas Outline Plan, as defined in the said report ('the Gas Outline Plan"), and to the Partnership's Immediate Report dated June 2, 2016 concerning the Commissioner's approval of the Development Plan, the Company announces that the Partnerships have authorized Noble Energy Mediterranean Ltd., the operator of the Leviathan project ("the Operator"), to enter into an agreement for a cumulative value of USD 120 million (for all the partners) to receive Front End Engineering Design (FEED) for the production platform ("the Platform"), as approved in the Development Plan. It should be noted that the Leviathan Partners are working to close other agreements for the purchase of equipment and/or services related to the Development Plan, as approved, and they expect to sign off on them in the near future.

In this way, the Leviathan Partners are continuing to work to complete the required actions in order to obtain a Final Investment Decision (FID), based on the Development Plan, in Q4 2016 and for that purpose are advancing negotiations at various stages with potential customers, both in the local market and for export, to sign contracts for the supply of natural gas from the Leviathan field, as stated in the Annual Reports. Based on the planned timetable, receipt of the Final Investment Decision within the said timeframe will allow commencement of gas production from the Leviathan project in Q4 2019, as stated in the Annual Reports.

Warning of forward looking information - the said actions concerning the Leviathan Partners entering into additional agreements for the purchase of equipment and/or services in the forthcoming period, the date of obtaining a Final Investment Decision, the start of gas production from the field, and the target markets for natural gas sales, are forward looking information in the meaning of the term in section 32a of the Securities Law. The said information is based on estimates of the Operator which in turn are based on a range of factors including changes to the Development Plan, delays in its implementation, delays in receiving regulatory approvals, estimated data on equipment and services availability, costs and timetables, as well as on past experience. The estimate is likely not to come about or to come about in a materially different manner that will change the estimates received, from a change in market conditions and/or a set of geopolitical changes and/or operational and technical conditions in the Leviathan project and/or from unexpected factors related to the exploration and production of oil and natural gas.