May 30, 2012 / 4:07 PM / 5 years ago

Delek income slips on lower gas production

JERUSALEM, May 30 (Reuters) - Israeli conglomerate Delek Group said net income from its gas segment slumped after it reduced production at its Mari B reservoir to preserve stocks following Egypt’s decision in April to terminate gas sales to the country.

Net income came in at 11 million Israeli shekels ($2.83 million) compared with 79 million a year ago.

Egyptian state-owned oil and gas companies said they were stopping gas sales to Israel, part of a 20-year deal, following a year of sabotage and pipeline attacks that had already disrupted supplies. Egypt supplied 40 percent of Israel’s gas needs prior to the announcement.

Delek posted first-quarter net profit of 110 million shekels compared with 210 million a year earlier when it booked a capital gain of 177 million Israeli shekels from the sale of shares in Noble Energy.

The results were, however, partly offset by its Delek U.S. subsidiary where net income from continuing ops was $46 million compared with $17 million in the same period last year.

Meanwhile, Delek and Noble units Delek Drilling and Avner Oil Exploration have found two large natural gas sites with combined reserves of nearly 27 trillion cubic feet. The Tamar site is expected to begin production in the first half of 2013 while the larger Leviathan prospect should come online in 2017.

The two companies also plan to bring the smaller Noa and Pinnacle fields online in the next few months to help prevent an electricity shortage caused by the halt in natural gas supplies from Egypt. ($1=3.8672 Israeli shekels) (Reporting by Steven Scheer; Editing by Mike Nesbit)

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