Monday 10 February 2020

Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that on February 6, 2020 a non-binding Letter of Intent was signed between Ithaca Energy (UK) Ltd, a wholly owned (100%) subsidiary of the Company (“Ithaca”) and a global investment company, on behalf of its own account and on behalf of the funds it manages (“LOI” and “ the Buyer”, respectively), in which the parties confirmed their intention to enter into a transaction to set up a new infrastructure company that would be held 40% by Ithaca and 60% by the Buyer (“the New Infrastructure Company”). The New Infrastructure Company will buy from Ithaca as part of a sale and charter agreement part of Ithaca’s production facilities. This includes the fully-owned floating production facility FPF-1 proximate to the Stella field, and the floating production, storage and offloading vessel for oil, which is owned 85% by Ithaca and is proximate to the Captain Field (“The Acquired Facilities”). The transaction will be carried out based at an estimated value (subject to due diligence as stated below) of the Acquired Facilities between USD 875 million (based on current known production) and an estimated USD 1.05 billion, depending on the de facto daily production and total actual reserves of the relevant areas, in addition to a further number of conditions detailed in the LOI. The parties will act to add additional assets to the venture, beyond the Acquired Facilities, to maximize and create value for the New Infrastructure Company, including facilities owned by the Buyer. The LOI establishes a timetable to carry out due diligence and to enter into a binding agreement. It includes a number of commercial conditions for the proposed transaction, which will serve as a basis for negotiations on the terms of the binding agreement. Inter alia, it is stipulated in the LOI that the Infrastructure Company will be able to take decisions on material matters, budgetary issues, expenses, distributions and financial matters that will be defined by the parties in the detailed agreement, with Ithaca’s approval. It is clarified that the LOI is not binding and that it is the intention of the parties to negotiate the signing of a binding agreement. The binding agreement (if it will be signed) will be subject.