Avner, Delek Drilling Slide on Woodside Leviathan Stake Concern

Delek Drilling-LP (DEDRL) and Avner Oil Exploration LLP (AVNRL) declined today on investor concern about delays in the development of Israel’s largest natural gas field as Woodside Petroleum Ltd. mulls its investment in Leviathan.

Delek Drilling, an oil and gas explorer whose interests include the offshore Leviathan and Tamar fields, dropped 2.3 percent to 18.28 shekels at 2:47 p.m. in Tel Aviv, the lowest level since Oct. 29. Shares of Avner retreated 2.6 percent to 3.155 shekels as the TA-Oil & Gas Index (TA-25) slid 2.6 percent.

Perth, Australia-based Woodside has expansion options beyond Leviathan and expects to decide in the first half of 2014 whether to complete a deal to invest as much as $2.3 billion in the field, Chief Executive Officer Peter Coleman said today. Delek said yesterday there is no approved time plan yet for the development of the site. Noble Energy Inc. (NBL), a partner in both fields, said Nov. 21 it isn’t ready to drill development wells at larger Leviathan due to delays in Israel setting natural gas export policies.

“There has been some uncertainty surrounding the drilling plans and development at Leviathan and that is what is putting pressure on the shares,” Guil Bashan, an analyst at IBI-Israel Brokerage & Investments Ltd. said today by phone. “The shares have also advanced significantly since the beginning of the year and this could also be some profit taking.”

Delek shares have dropped 7.5 percent since advancing to a record 19.77 shekels on December 4. Avner shares are 7.3 percent off their all-time high of 3.41 shekels on Dec. 5.

They have each advanced 22 percent this year as Tamar started production of natural gas in March, compared with a 15 percent gain in the benchmark TA-25 Index. The two fields together hold enough gas to supply Israel’s needs for decades, while still allowing for exports.

Ratio Oil Exploration 1992 LP (RATIL), also a partner in Leviathan, declined 3.3 percent to 0.439 shekel, capping a 29 percent gain this year. Delek Group Ltd. (DLEKG), which has stakes in Leviathan via Delek Drilling and Avner, declined 1.6 percent, capping a 46 percent gain this year.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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