Delek Group — Capital/Financing Update 2020

Oct 8, 2020

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA

Possible Offering for Qualified Investors, Secured by Overriding Royalties from the Leviathan Project

Tel Aviv, October 8, 2020. Delek Group (TASE: DLEKG, US ADR: DGRLY) ("the Company") hereby provides the following update further to what is stated in the Company's previous reports concerning the Company's program to raise money through an offering secured by the overriding royalties of Leviathan:

• 1. At this time the Company is progressing a possible offering of a series of bonds offered to qualified foreign and Israeli institutional investors ("the Investors"), for an overall par value of approximately USD 180 million ("the Bonds" and "the Offering", as applicable) secured by the overriding royalties to which the Company and Delek Energy Systems Ltd ("Delek Energy") are entitled from the share of Delek Drilling Limited Partnership in the Leviathan Project ("Leviathan Overriding Royalties") in accordance with the plan detailed in paragraph 2 below.
• 1. If the Offering takes place, the entire consideration from the Offering, net of expenses and a buffer to ensure usual interest payments, will be transferred to the account of the trustees of the Company's debentures, and will be used for payment of the Company's upcoming payments to the debenture holders, in accordance with the provisions of section 6.1.5 of the Amended Deed of Trust valid since June 17, 2020.
• 1. Under the Offering plan being formulated, the Offering of Bonds to the Investors will be by way of a special purpose vehicle, Delek Overriding Royalty Leviathan Ltd. ("the Issuer"), wholly owned by Delek Energy, to which will be transferred the rights of Delek Energy and the Company to receive the Leviathan Overriding Royalties, so that the Issuer will hold both of the Company's and Delek Energy's rights to receive the Leviathan Overriding Royalties, and will pledge these rights as collateral in favor of the Bond holders.
• 1. If the Offering proceeds, it will take place by way of a transaction exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, in accordance with the usual format and documentation for an offering of this type.
• 1. The Group has appointed the foreign bank Goldman Sachs International to lead the Offering process. The Bonds are intended to be listed for trading on the "TACT Institutional" system on the Tel-Aviv Stock Exchange Ltd. If the Offering proceeds, the Company expects that it will be completed during the coming weeks.
• 1. It is emphasized that the scope of the Offering, timing and all other terms have not yet been determined and are contingent, inter alia, on market conditions and additional factors beyond the

Company's control, including the obtaining of the Petroleum Commissioner's approval1, tax ruling, TASE approval and fulfillment of other material conditions, and consequently there is no certainty at the date of this report with respect to the Offering or its terms.

The information in this report does not constitute an offer for the purchase or sale of any bonds or other securities of the Company and/or of the Issuer or of another company, and what is stated herein does not constitute a recommendation or expert opinion.

Warning of forward looking information - the information stated above in respect of a possible Offering of Bonds, including in respect of its scope, timing, and structure, listing of the Bonds for trading on the TACT Institutional system and the other terms and details in respect of the Offering enumerated above, is forward looking information within the meaning of the Securities Law, 1968, for which there is no certainty that it will take place at all, or might take place in a materially different way from what is stated above, on account of various factors including conditions of the financial markets, on account of the continuation of the COVID-19 crisis and its consequences, and the response of potential investors to the offered Bonds or on account of non-fulfillment of any conditions precedent or for other reasons.

The Bonds to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any other jurisdiction and may not be offered or sold, directly or indirectly, in the United States or to or for the account or benefit of U.S. persons, as such term is defined in Regulation S of the Securities Act, absent registration or unless pursuant to an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The Bonds will be offered subject to prevailing market and other conditions, and there is no assurance that the Offering will be completed or, if completed, as to its terms. This report does not constitute an offer to sell or the solicitation of an offer to buy the Bonds, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.

This report does not constitute and shall not, in any circumstances, constitute a public offering nor an invitation to the public in connection with any offer within the meaning of the Directive 2003/71/EC (the "Prospectus Directive"), as implemented in Member States of the European Economic Area (the "EEA"), and, once fully effective, under Regulation (EU) 2017/1129 (the "Prospectus Regulation"). The offer and sale of the Bonds will be made pursuant to an exemption under the Prospectus Directive and, once fully effective, under the Prospectus Regulation, from the requirement to produce a prospectus for offers of securities.

This report does not constitute an offer of securities to the public in the United Kingdom and is directed solely at persons who (i) are outside the United Kingdom, (ii) are investment professionals, as such term is defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order"), (iii) are persons falling within Article 49(2)(a) to (d) of the Financial Promotion Order, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any Bonds may otherwise lawfully be communicated

¹ On September 14, 2020, the petroleum committee recommended the Petroleum Commissioner to approve the Company's application to transfer the royalties to the Issuer and pledge the royalties. The Petroleum Commissioner's approval was not obtained yet.

or caused to be communicated (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.

This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on September 29, 2020.

About The Delek Group

Delek Group is an independent E&P company with activities in the UK North Sea and the East Mediterranean. Delek Group has significant holdings in the Leviathan and Tamar natural gas reservoirs in the East Mediterranean (Israel's territorial water), with reserves and resources of more than 30 TCF and annual production capacity of more than 20 BCM. These reservoirs are a major natural gas supplier to the growing markets of Israel, Egypt and Jordan and Delek continues to lead the region's development into a major natural gas export hub. Through its wholly owned subsidiary Ithaca, Delek Group holds high-quality oil and natural gas assets in the UK North Sea totaling approximately 260 million barrels of oil equivalent (boe) and producing about 25 million boe per year. Delek Group is one of Israel's largest and most prominent companies with a consistent track record of growth. Its shares are traded on the Tel Aviv Stock Exchange (DLEKG:IT) And its ADRs are traded on the US OTC market (DGRLY:US).

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

Contact

Investors

Limor Gruber Head of Investor Relations Delek Group Ltd. Tel: +972 9 8638443 Limorg@delek-group.com