Israeli Delek Boosts Profits on Leviathan
Israeli producer Delek Drilling reported a profit of $365mn on its 2020 trading March 17 with the start-up of the Leviathan field at the very end of 2019. This was over 60% more than the $224mn in 2019, it said.
For Q4, profits were almost double year on year, standing at about $142mn compared with $78mn. Delek Drilling’s revenues in 2020 from the sale of natural gas and condensate were about $919mn, again about twice the year before: $453mn.
Net cash flow was $329mn, of which about $165mn were spent on the Tamar (Delek: 22%) and Leviathan (Delek: 45.3%) reservoirs. The compares with net cash flow of about $254mn and investments in the reservoirs of $610mn dollars in 2019.
Leviathan last year brought in about $501mn for Delek, reflecting total production and sales of about 7.3bn m³, of which Delek Drilling’s share was about 3.3bn m³. Tamar brought in about $264mn, reflecting total annual production and sales of about 8.2bn m³, of which Delek's share was about 1.8bn m³. Israel took 11.2bn m³, Jordan's power company took 2.1bn m³ and Egypt took 2.2bn m³.
The Covid-19 pandemic hit gas sales in Q2 2020 but a sharp recovery in the second half of the year led to "extremely high levels" of regional demand which led to new natural gas production and sales records in Israel.
Israel also benefited from higher royalty payments, with more than NIS 6 ($1.8)bn paid since the start of the Tamar field in 2013, of which just over NIS 1bn were paid last year.
CEO Yossi Abu said the company's "stable and long-term cash flow together with a variety of growth opportunities in the company’s operations that are based on extracting the value from our existing assets – Phase B of the Leviathan project, development of the Aphrodite reservoir and more – will allow us to continue to unlock value which will undoubtedly be expressed in the value at which we are traded.”
Abu said earlier this month that the sales income from Leviathan was likely to be greater than expected owing to higher production prospects.