Delek Group Subsidiaries Announce Natural Gas Discovery at Tamar Well Offshore Israel

TEL AVIV, Israel, Jan. 18 /PRNewswire-FirstCall/ — Delek Group (TASE: DLEKG) (hereinafter: “the Company”) announced today that following its immediate report of January 11, 2009, its subsidiary Delek Energy Ltd. (held 88.87%) published today an immediate report that its subsidiaries, Delek Drilling LP and Avner Oil Exploration LP have made a natural gas discovery under the “Matan” license at the “Tamar-1″ drilling prospect (hereinafter: “drill” or “well”).

As reported by the operator, Noble Energy Mediterranean (hereinafter: “the Operator”), the drill, conducted in approximately 1,680 meters depth of water, reached a total depth of 4,900 meters, and passed through a thick subsalt layer, lower-Miocene structure in the Levantine basin. Formation logs, which were created as part of the drilling process, identified three high-quality reservoirs which included sand layers with a net total of more than 140 meters of natural gas. The thickness and quality of the reservoirs encountered were greater than the Operator previously anticipated at this drill location.

According to the Operator, initial indications show that the gas reserves identified in the well are very substantial, at least equal to the pre-drill estimated Gross Mean Resources of approximately 3.1 TCF (approximately 88 BCM). The Operator estimates that subject to the collection of additional data, the reserve estimate for Tamar could further increase.

According to the News Release issued last night by Noble Energy Inc. (hereinafter: “Noble”), the Operator’s parent company, Noble’s Chief Executive Officer stated that this appears to be the largest discovery in Noble’s history.

In light of the these results, the partners in the Tamar drill have decided, on the basis of the recommendation received from the Operator, to conduct drill extraction targets tests, among others, to establish the well’s daily natural gas production potential. The production tests are expected to continue approximately three weeks, and are estimated to cost of approximately US $20 million (100%).

Immediately following the completion of the well, the partners in the Tamar drill may continue to use the rig to conduct up to two additional consecutive drills in the basin. One of the wells may be an appraisal well at Tamar. The second drill the partners are considering drilling is a subsalt, lower Miocene prospect. It should be stressed that as of now there is no decision on the execution of any additional drilling.

As outlined in paragraph 9.7 in the Partnership Prospectus of November 27, 2008, the commercialization of the discovery of natural gas is complex and depends on many different bodies and the process of development of the natural gas discovery is complex, long, and subject to the execution of many additional stages beyond what has already undertaken.

The percent interests in the Drill rights are as follows:

Partner Percent

Noble Energy Mediterranean 36.00%

Isramco Negev 2, Limited Partnership 28.75%

Delek Drilling, Limited Partnership 15.625%

Avner Oil Exploration, Limited Partnership 15.625%

Dor Gas Exploration, Limited Partnership 4.00%

Warning with regard to “forward-looking statements” – the estimates with regards to the volume of the well’s natural gas reserves, as provided by the Operator, constitute Forward Looking Statements as defined under the Israel Securities’ Law. These estimates are based on geological, geophysical and other estimates received from the Drill Operator and serve, at this time, only as estimates whereby there is no certainty as of yet with regards them. The Partnership has not conducted estimates or independent evaluations of these said estimates. These estimates are expected to be updated as additional information is accumulated, including as a result of the continued analysis of the well proceeds, the conduction of production tests and the conduction of validation drilling, should they be conducted, and\or as a results of a variety of factors related to projects searching for, and producing, natural gas.

THIS IS A SUMMARY OF THE HEBREW ANNOUNCEMENT ISSUED TO THE TEL AVIV STOCK EXCHANGE ON JANUARY 18, 2009.

About The Delek Group

The Delek Group is one of the leading and most prominent and dynamic investment groups in Israel.

The Delek Group is diversified into the following three major subsidiaries:

• Delek Petroleum, with its two subsidiaries: Delek Israel, a gasoline and lubricants distributor in Israel, and Delek USA (NYSE: DK), which operates gas stations and convenience stores and an oil refinery in Southern United States.
• Delek Investments and Properties, a holding company with subsidiaries in the energy, infrastructure, automotive, finance and media sectors.
• Delek Real Estate, through its subsidiaries Dankner and Delek Belron Investments, owns and manages prime global real-estate investments.

Contact

    Dalia Black                         Kenny Green
    Head of Investor Relations          International Investor Relations
    Delek Group                         GK Investor Relations
    Tel: +972 9 863 8444                Tel: (US) 1 646 201 9246
    Email: black_d@delek.co.il          E-mail: info@gkir.com

SOURCE The Delek Group