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Delek Group announced acquisition of rights in oil assets in the Gulf of Mexico

Published by , Deputy Editor
Oilfield Technology,

Delek Group (“the Company”) has announced that further to its Immediate Report dated December 24, 2017 regarding signing of a non-binding letter of intent to invest in and/or acquire oil and gas assets in the Gulf of Mexico, USA, on January 8, 2018, the Delek GOM Investments LLC, a wholly owned foreign subsidiary ("The Buyer"), contracted with Gulf Slope Energy Inc. and Texas South Energy Inc.and Texas South Energy Inc. (“Gulf Slope”, “Texas South”, respectively, and jointly “the Transferors”) in an agreement for the acquisition of oil and gas rights. The Transferors are public companies whose shares are traded on in the USA (OTC).

The Oil Assets under the agreement are 12 federal oil and gas exploration, development and production Leases in the exclusive economic zone of Mexico, USA, in the shallow waters (less than 150m depth) (“The Leases” and “The Oil Assets”). In the Oil Assets areas, the Transferors identified 9 main prospects for exploration drilling (“The Prospects”), of which 7 are in deep layers and 2 in shallow layers. The Buyers undertook in the Agreement to finance 90% of the cost of the two initial drillings in the “Tau” and “Canoe” Prospects (“The First Stage Assets”), in return for 75% of the rights in the First Stage Assets, in the area of which the drillings will be carried out, at a total which shall not exceed USD 50 million and in addition, the Buyer will have an option to acquire rights in the remaining Prospects based on the mechanism below. The company will provide the Buyer with a shareholders’ loan to finance the cost of these two drillings from independent sources.

According to a resources report received by the Company from Netherland, Sewell and Associates, Inc. ("NSAI"), prepared in accordance with the guidelines set out in the Petroleum Resources Management System approved by the Society of Petroleum Engineers (SPE-PRMS) and attached as Appendix B of their report here.(“The Resources Report”), as of December 31, 2017, in the best estimate (P50), the quantity of prospective resources in the First Stage Assets is 99 million barrels of oil and 177 BCF natural gas (129 MMBOE1 ). Under the Resources Report, the total quantity of resources (seven Prospects) as of December 31, 2017, based on the best estimate (P50), is 194 million barrels of oil and 1.4 TCF natural gas (423 MMBOE).

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