Fuel shares fell 90% following the corona and went all the way back. It was a difficult route, but both luck and proper debt management as well as proper realizations, moved Delek to a safe shore and from there it continued to run forward. Delek reports a profit of NIS 1.4 billion last year, compared to a loss of NIS 1.8 billion in 2020. Delek, which is enjoying the surge in oil and gas prices, says in its reports that Ithaca’s value soared to $ 3.1 billion (excluding the value of a majority deal completed in the first quarter of 2022). Ithaca is preparing for an IPO and this may flood value in the fuel itself.
The Group’s revenues in 2021 increased to NIS 8 billion, compared to revenues of NIS 6.67 billion in the corresponding period last year. Operating profit increased to NIS 4.63 billion compared to a loss of NIS 94 million in the corresponding period last year. Revenues in the fourth quarter were NIS 2.26 billion The profit in the quarter was NIS 628 million, compared with NIS 1.1 billion in the corresponding period (mainly due to one-time income recorded by the Group in 2020, amounting to NIS 900 million, from the cancellation of impairment of assets). Ithaca oil and gas).
Idan Wells, CEO of Delek Group, says with the publication of the results: “2021 was an excellent year for Delek Group with record results in all of the group’s core activities. The company’s strong financial results speak for themselves, and are proof of the group’s successful business year. We intend to take advantage of the existing historical momentum in the global energy markets in order to advance our strategy for 2022, which focuses on leading business moves that will strengthen the activity in the group’s core assets: Ithaca, which operates in the North Sea, and New-Med Energy, which operates in the Mediterranean. “.
Energy activity in the North Sea – the value of holdings soared
Ithaca, which operates in the North Sea and is wholly owned by the group, ended 2021 with a net profit of $ 400 million compared to a break of $ 286 million in the same period last year. Ithaca’s total revenue in 2021 was $ 1.470 billion in 2021, compared to $ 1.176 billion in 2020. In the fourth quarter of 2021, revenue was $ 486 million compared to $ 285 million in the same quarter last year.
Ithaca’s EBITDAX grew by about 40% in 2021 and amounted to about $ 1.036 billion, compared to $ 745 million in the same period in light of the high increase in gas and oil prices, and despite the decrease in daily output in 2021 to about 56,000 equivalent of barrels of oil per day (BOEd), compared to 66,000 equivalent of barrels of oil per day (BOE) in 2020. The decrease was recorded due in part to extensive maintenance work carried out in the summer of 2021 in the transmission network as well as maintenance work postponed from 2020 due to the corona epidemic. After the balance sheet date and up to the date of publication of the reports, Ithaca’s production was about 70,000 barrels per day. The cost of production in 2021 was about $ 18 compared to $ 16 per barrel in the same period last year, mainly in light of the decline in daily production during 2021.
During the period of the report, Ithaca received approval from the local gas and oil authority, and began the second phase of the Captain reservoir, using a polymer flow method designed to stimulate oil production from the reservoir. The project is multi-year In addition, production from the Abigail Reservoir, located in the GSA area, is expected to begin in the third quarter of 2022.
In November 2021, Ithaca signed an agreement to purchase the entire shares (100%) of Ruben Oil & Gas (The Japanese Marubeni Oil and Gas, which operates in the North Sea, where its main assets and liabilities include, among other things, rights at a rate of about 41.3% in oil assets in the MonArb area (which has 9 producing oil fields) as well as additional oil assets, accumulated tax losses of approx. – $ 1.6 billion (as of December 31, 2020), cash accumulated in the Company’s coffers as of January 1, 2021 (the determining date for the transaction), as well as liabilities for sealing oil wells.
The unconditional consideration stipulated in the agreement for the acquisition of the assets was $ 140 million of which $ 70 million was paid at the time of completion of the transaction, offset against the cash accumulated in the fund, and an additional $ 70 million will be paid as deferred consideration in July 2025. Up to US $ 225 million, which is contingent on future operations in the acquired assets’ oil assets. Following the balance sheet date, in February 2022 the transaction was completed and joined a series of significant steps taken by the company as part of its North Sea expansion strategy The company, as part of the preparations for making a capital move.
Attached to Ithaca’s reports is an up-to-date resource report for the oil assets of Ruben Oil & Gas, conducted by the global NSAI company, according to which the total amount of P2 oil and natural gas reserves in the oil assets of the acquired company, as of December 31, 2121, is approximately 23,407 (MBOE) (part of the Company), and the capitalized cash flow value of these reserves, at a discount rate of 10%, according to the assumptions underlying the cash flow, is approximately $ 404.6 million.
In addition, the Delek Group’s annual reports were accompanied by a fair valuation of Ithaca conducted by an external valuer (KROLL Duff & Phelps), according to which Ithaca’s value (net of debt) as of December 31, 211 jumped to about $ 3.1 billion. , Compared to a value of $ 1.878 billion as of December 31, 2020. This is an increase of about $ 1.23 billion, which reflects a 72% increase in the value of Ithaca, based on energy prices in the markets as of the end of 2021, and without taking into account the additional value of A deal from Rovani, which Ithaca completed during the first quarter of 2022.
Energy activity in Israel – a record year in natural gas sales
The positive trend of NewMed Energy (formerly “Delek Drilling”), which is held at a rate of 54.7%, continued in 2021 when the net profit attributed to the group’s shareholders amounted to NIS 362 million, compared to NIS 117 million in 2020. In the quarter The fourth of 2021 The net profit attributed to the group’s shareholders amounted to NIS 58 million, compared with NIS 43 million in the corresponding quarter last year. Most of the increase in net profit, reported by the partnership, is due to an increase in the quantities of natural gas sold to both the domestic market and Egypt and Jordan.
Revenues (as included in the Group’s results) of NewMed Energy rose to a peak of NIS 3.23 billion in 2021, an increase of about 20% compared to the corresponding figure in 2020, which stood at NIS 2.667 billion, and revenues in the fourth quarter of 2021 stood at NIS 725 million, compared with NIS 685 million in the corresponding quarter last year.
The amount of natural gas sold from the Whale Reservoir this year amounted to about 10.7 BCM compared to 7.3 BCM last year, when 57% of the sales of the Whale Reservoir were to Egypt and Jordan. In parallel with exports via the EMG pipeline, the flow of natural gas from Whale to Egypt also began last month through the Jordanian transmission infrastructure. The use of this infrastructure will allow a significant increase in the amount of natural gas for customers in Egypt.