TEL-AVIV, Israel, December 5, 2011 /PRNewswire/ --
Ellomay Capital Ltd. (NYSE Amex: ELLO)
("Ellomay" or the "Company"), announced today that
Ellomay Oil and Gas 2011 LP, ("Ellomay Oil and Gas") a
limited partnership whose general partner is a wholly-owned
subsidiary of Ellomay, entered into a Farm-out Agreement (the
"Farm-out Agreement") with Adira Energy Israel Ltd., an
energy exploration company for oil and gas in Israel ("Adira"), a wholly-owned
subsidiary of Adira Energy Ltd. (TSXV: ADL, OTCBB: ADENF,
FRANKFURT: AORLB8) for the farm-in
of Ellomay Oil and Gas to 20% of the participating interests
in the Yitzchak oil and gas exploration and drilling license in the
Mediterranean sea (the "License"). The License covers a
total area of approximately 127.7 square kilometers (or 31,555
acres) and is in relatively shallow water with depths between 60
and 250 meters.
As published by Adira, simultaneously with the execution of the
Farm-out Agreement with Ellomay Oil and Gas, Adira entered into a
farm-out agreement with the AGR Group ("AGR") to farm-out 5%
in the License to AGR as Lead Operator in accordance with Israeli
regulations applying to an "Operator" with the continued
involvement of Adira as co-operator and formalized a letter of
intent with Brownstone Energy Inc. ("Brownstone") in respect
of the License, enabling the formal registration of Brownstone's
15% participating interest in the Israeli Petroleum Registry.
Following approval of the above mentioned farm-out arrangements,
Adira will hold 60%; Ellomay Oil and Gas 20%; Brownstone 15%; and
AGR 5% of the License (collectively the "License Owners").
The License Owners intend to negotiate a Joint Operating Agreement
to regulate the commercial relationship in respect of the
License.
Pursuant to the Farm-out Agreement, at the closing of the
transactions contemplated by the Farm-out Agreement, Ellomay Oil
and Gas will reimburse Adira for its proportionate share of the
costs incurred by Adira to date of closing plus interest of LIBOR +
1%. This amount is currently expected to be approximately
US$320,000. Ellomay Oil and Gas will
also pay Adira a 3% overriding royalty interest ("ORRI") on
Ellomay Oil and Gas's share of revenues from sold petroleum until
repayment of Ellomay Oil and Gas's expenditures in the work program
plus interest of LIBOR + 1%, and 4.5% ORRI following such
repayment.
In addition, following the closing of the transaction, each of
Ellomay Oil and Gas and the other holders of the participating
interests in the License will be required to bear and pay its
respective share of all of the expenditures approved in relation to
the License and to bear and pay its share of the carried interest
with respect to AGR's 5% participating interest (such payments will
be reimbursed to Ellomay Oil and Gas by AGR from its proceeds for
oil and gas attributed to its interest in the License).
Subject to professional assessments as to the prospects for
successful exploration, Ellomay Oil and Gas further committed to
finance its share of the anticipated expenditures in an amount of
up to $2 million, less the amount
that will be paid at closing as reimbursement of expenses.
Thereafter, if Ellomay Oil and Gas does not contribute its share of
expenditures in excess of such $2
million, then it will be permitted to sell its participating
interest to a third party and, if not sold, its holdings in the
License would be diluted pro rata to the total expenditures in
connection with the License.
Subject to the terms and conditions set out in the Farm-out
Agreement, in the event Adira solicits a strategic investor into
the License, Ellomay Oil and Gas will reduce its participating
interests pro rata to the entry of such investor.
The closing of the Farm-out Agreement is subject to certain
closing conditions, including the receipt of approval of the
Israeli Petroleum Commissioner, the approval of Brownstone to the
assignment of the participating interests and the execution of a
Joint Operating Agreement with respect to the License.
Shlomo Nehama, Chairman of
Ellomay, stated that "the entry into the partnership with Adira in
the Yitzchak license represents a significant addition to Ellomay's
portfolio. It is a license in an advanced enough stage as far as
the probability of finding natural resources is concerned and in an
early enough stage to still create value for our shareholders. We
continue to search for suitable investment opportunities in the oil
and gas exploration field in Israel, and we view Adira and the other
holders of participating interests as high-quality partners that
suit Ellomay for a project of this scale."
The Company cannot at this stage estimate whether or when the
approval of the Israeli Petroleum Commissioner will be obtained or
whether any of the other closing conditions will be fulfilled.
Non-Extension of the Aviah, Qeren,
Ruth D and Alon E Licenses
Following previous reports by Ellomay of the entry into
contracts to acquire participating interests in the Aviah, Qeren,
Ruth D and Alon E drilling licenses, transactions which were not
consummated up to this date, Ellomay further announced that the
Israeli Petroleum Commissioner published its decision not to extend
the terms of all such licenses. Ellomay cannot at this stage
estimate or foresee which actions will be taken by the current
owners of these licenses as a result of such decision, if any, and
what effect these actions will have on the likelihood of the
consummation of the transactions.
About Ellomay Capital
Ellomay Capital is an Israeli public company whose shares are
listed on the NYSE Amex stock exchange, which focuses its business
in the energy and infrastructure sectors worldwide and is chaired
by Mr. Shlomo Nehama, former
Chairman of Bank Hapoalim. Ellomay Capital's assets include ten
photovoltaic plants in Italy with
an aggregated capacity of approximately 11 MW and holdings in
Dorad, Israel's largest private
power plant, which is currently under construction and is expected
to produce approximately 800MW, representing about 8% of
Israel's current electricity
consumption.
Information Relating to Forward-Looking Statements
This press release contains forward-looking statements that
involve substantial risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
regarding our plans and objectives of management are
forward-looking statements. The use of certain words,
including the words "plan," "estimate," "project," "intend,"
"expect," "believe" and similar expressions are intended to
identify forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. We may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements and you should not place undue
reliance on our forward-looking statements. Various important
factors could cause actual results or events to differ materially
from those that may be expressed or implied by our forward-looking
statements, including, but not limited to, delays in or failure to
obtain the approval of the Israeli Petroleum Commissioner for the
transaction. These and other risks and uncertainties associated
with our business are described in greater detail in the filings we
make from time to time with Securities and Exchange Commission,
including our Annual Report on Form 20-F. The forward-looking
statements are made as of this date and the Company does not
undertake any obligation to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Contact:
Kalia Weintraub
CFO
Tel: +972-(3)-797-1111
Email: kaliaw@ellomay.com
SOURCE Ellomay Capital Ltd