Friday 11 November 2016

Delek Group hereby announces that it had submitted through a foreign subsidiary, DKL Investments Limited, a bid for participation in the rights for maritime exploration licenses in the area of Newfoundland, Canada, as part of the second annual tender, which is part of a program of several annual tenders, of which this is the first where the Canadian Government is granting licenses in this area.

On November 9, 2016 the tender results were announced, with the Company, through its subsidiary, obtaining the rights to the license in Block 7, spread over about 2,000 sq. km. at an estimated target depth of 4,500 from sea level (sea depth is about 1,400m).

The subsidiary submitted the bid together with Navitas Petroleum Limited, with the Company, through its subsidiary, holding 70% of the license rights, the balance being held by Navitas Petroleum Limited (jointly "the Partners").

The tender criterion for selection of the winning bid was the total amount of money the bidder commits to spend on exploration of the bid area . The Partners' bid came to CAD 48 million for the period (approx. USD 36 million as of the report date, and the Company's share is 70%).

The Partners must provide within 15 days of the tender results a guarantee for 25% of the commitment amount (approx. CAD 12 million (100%)). As the Partners invest money in seismic work and exploration in the block, they will be entitled to release the guarantee for up to 25% of actual investments as defined in the license, on an annual basis. In addition to the guarantee, the Partners are committed to annual payments for environmental and other works.

The license, in accordance with the tender, will be granted for a period of six years with the possibility to extend it by three further years. At the end of the period the license will expire and the areas included in it will be returned, except those which have been converted to a Significant Discovery License or Production License, if it shall declared .

Within 6 months from the date set in the license (not yet received), the parties to the license must sign a Joint Operating Agreement (JOA), in its usual format.

In accordance with a report published by the Provincial Government of Newfoundland and Labrador, with regard to the West Orphan geological basin, where Block 7 among others is located, independent resource assessment identifying the in place resource potential of 25.5 billion barrels of oil and 20.6 trillion cubic feet of gas . It is stipulated that the estimate is for the entire area of the basin and not just for Block 7 alone.

More - http://ir.delek-group.com/phoenix.zhtml?c=160695&p...