Israel’s Delek in Ithaca merger talks as hit by loss

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(Reuters) – Israel’s Delek Group said on Monday it is in talks with third parties about a possible merger of its North Sea energy operations, as it reported a second quarter loss.

Merging Ithaca Energy with an international group would be part of a process of turning it into a public company traded in London, Delek said in a statement, adding that it also expected to receive a cash payment under the plan being considered.

Several international investment banks were involved in the discussions, said Delek, which was hit hard by the global coronavirus crisis and fall in energy prices and has been selling off assets to appease worried bondholders.

Delek, which has stakes in Israel’s two largest offshore natural gas fields, said quarterly revenue in the local market net of royalties rose 64% to 498 million shekels ($148 million), mainly due to gas production starting from the Leviathan field.

Revenue rose 177% at Ithaca, boosted by Delek’s November purchase of Chevron’s British North Sea oil and gas fields for $2 billion.

Delek said it posted a quarterly loss of 326 million shekels, mainly due to one-time accounting provisions, compared with a 190 million shekel profit a year earlier.

Revenue slipped to 1.94 billion shekels from 1.96 billion as a rise in revenue from the sale of gas and oil in Israel and in the North Sea was offset by lower revenue from fuel distribution and marketing operations in Israel due to the COVID-19 pandemic. ($1 = 3.3633 shekels) (Reporting by Tova Cohen; Editing by Alexander Smith)