Delek : Arrangement with the Antitrust Authority concerning the Karish and Tanin Natural Gas Reserves

Tel Aviv, March 30, 2014. Delek Group (TASE: DLEKG, OTCQX: DGRLY) ("the Company") an immediate report that was published by the Company's gas subsidiaries - Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership (together "the Partnerships") is included below, with regard to arrangement with the Antitrust Authority ("the Antitrust Authority") between the Partnerships and the other partners in the Leviathan Reservoir located in the 349/Rachel and 350/Amit licenses, concerning the Karish and Tanin natural gas reservoirs.

"Following on section 7.26.6 to the periodic report for December 31, 2013, published on March 18, 2014 concerning negotiations with the Antitrust Authority ("the Antitrust Authority") for reaching an arrangement in lieu of the Antitrust Authority's claim of a restrictive trade arrangement between the Partnerships and the other partners in the Leviathan Reservoir located in the 349/Rachel and 350/Amit licenses, the Partnerships hereby announce that on March 27, 2014, a consensual decree was signed pursuant to Section 50B to the Antitrust Law, 1988 ("the Agreement" or "the Consensual Decree") in lieu of the decision concerning a restrictive trade arrangement in the Leviathan Reservoir as aforesaid, whereby the Partnerships and Noble Energy Mediterranean Ltd. ("the Sellers") will sell all their holdings in the 366/Alon C license in which the Karish natural gas reservoir is located in, as well as all their holdings in the 364/Alon A license ("the Alon A License") in which the Tanin natural gas reservoir is located in (jointly: "the Asset"), subject to the following conditions.

The Sellers have undertaken to sell, no later than the date specified in the Agreement, to a party that is not related to any of themselves or the other partners in the Tamar and Leviathan reservoirs ("the Potential Buyer") their holdings in the Asset including their commitment to pay royalties from the Asset strictly to non-related parties. The aforesaid notwithstanding, the Sellers may hold the rights to the condensate in the Asset and not sell said rights to the Potential Customer but to a third party, prior to the start of production from the Asset.

The Sellers may hold on to the right to royalties from oil sales from the Asset, should any oil be found, from the consideration received for the sale of oil produced by the Asset, up to the maximum rate prescribed by the Agreement.

Sale of the Sellers' rights in the Asset to the Potential Buyer will be subject to the sold and marketed natural gas from the Asset to the domestic market only.

In the event that the Sellers not sell their rights in the Asset by the date specified in the Agreement, the right to transfer their rights in the Asset to the Potential Buyer will be transferred to a trustee, who will act as provided in the Agreement.

Furthermore, the Sellers will grant the Potential Buyer an option to buy gas from the Leviathan Reservoir to a total amount equal to 15.2 BCM. This option will vest in three installments, with each of these installments being exercisable in the exercise period specified in the Agreement, and subject to production of natural gas from the Asset.

The Sellers have also undertaken to extend the exercise date for the option to increase the contractual quantity, given to Israel Electric Corporation Ltd. ("IEC") under the natural gas supply agreement dated March 14, 2012, between IEC and the Tamar Partners ("the Tamar Option"), or alternatively, to grant IEC an option with identical quantities and commercial conditions as set forth in the Tamar Option.

The Sellers' rights will be sold free of any commitment to pay royalties from the Asset to related parties, and so the Sellers and the said royalties-holders will be required to reach agreements on the distribution of the consideration from the sale of the Asset.

This Agreement supersedes a decision concerning a restrictive trade arrangement between the partners in the Leviathan Reservoir, and was signed without any admission by the Partnerships and the other partners in the Leviathan Reservoir to the existence of any restrictive trade arrangement.

The precedent for the Agreement coming into effect include, (a) receipt of approval by the Ministry of Natural Infrastructures, Energy and Water's Oil Commissioner to a change in the boundaries of the Alon A License and the 350/Amit license, so that the Alon A License will include the entire area of the Tanin natural gas reservoir and the presence of a "discovery" in the Asset, as defined in the Oil Law, 1952; and (b) approval by the Antitrust Court.

It is noted, that as of the reporting date, the Sellers are conducting negotiations with various entities for the sale of their rights in the Asset.

A copy of the Consensual Decree is public and has been published on the Antitrust Authority website.

The partners in the Leviathan Reservoir and their respective holdings, are as follows:

The partners in the 364/Alon A and 366/Alon C licenses and their respective holdings, are as follows:

This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on March 30, 2014.

The Delek Group, Israel's dominant integrated energy company, is the pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean's Levant Basin into one of the energy industry's most promising emerging regions. Having discovered Tamar and Leviathan, two of the world's largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 37 TCF.

In addition, Delek Group has a number of assets in downstairs energy, in water desalination, and in the finance sector.

For more information on Delek Group please visit www.delek-group.com

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