Israeli energy firms Delek Drilling, Avner Oil to finally merge

FILE PHOTO: Yossi Abu, chief executive of Delek's subsidiaries Delek Drilling and Avner Oil poses for a picture during an interview with Reuters in Herzliya, near Tel Aviv, Israel March 28, 2016. REUTERS/Baz Ratner

JERUSALEM (Reuters) - Israel's Delek Drilling DEDRp.TA and Avner Oil AVNRp.TA, both units of conglomerate Delek Group DLEKG.TA, said on Wednesday they have completed a long-awaited merger and will begin trading next week as one company.

The new entity will keep the name Delek Drilling and will have a market value in Tel Aviv of about 16 billion shekels ($4.4 billion).

It is through Delek Drilling and Avner Oil that Delek Group owns major stakes in the large Israeli offshore natural gas fields Tamar, which began production in 2013, and Leviathan, which is due to come online in late 2019.

Delek Drilling also said in a statement that exports from Tamar to Jordan’s Arab Potash Co and Jordan Bromine plants began in January.

Chief Executive Yossi Abu said he expects production at Tamar this year, “to cross the 10 billion cubic meter mark.”

The companies’ combined net profit in the first quarter was $78.9 million, up 23 percent from a year earlier.

Reporting by Ari Rabinovitch