Israel’s Delek examines $3.6 bln energy spinoff

Delek_Group_logoDec 31 (Reuters) – Israeli conglomerate Delek Group is examining a spinoff of its oil and gas activities, saying it could help maximise value for shareholders by separately listing a bunch of assets which one analyst valued at some $3.6 billion.

Delek, which is 63 percent held by billionaire Yitzhak Tshuva, has major shares in a number of newly discovered gas fields off Israel’s coast including Tamar and Leviathan.

The Tamar field, which Delek developed together with Texas-based Noble Energy, has estimated reserves of 10 trillion cubic feet (tcf) and began production in late March.

Nearby Leviathan, with an estimated 19 tcf of gas reserves, is set to come online in 2016 or 2017. Israel’s High Court has upheld a government decision to allow exports of 40 percent of offshore reserves.

UBS analyst Roni Biron estimates Delek’s exploration and production (E&P) activities account for 77 percent of group net asset value (NAV), which he put at 16.39 billion shekels ($4.7 billion). The rest consists of downstream operations in Israel, Europe and the United States, as well as insurance and water desalination.

Shares in Delek Group, which has a market value of $4.3 billion, were up 4 percent to 1333 shekels in afternoon trading in Tel Aviv on Tuesday.

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Israel’s Delek examines $3.6 bln energy spinoff