PRELIMINARY COPY — SUBJECT TO COMPLETION

ISRAMCO, INC.

24251001 West Loop South, Suite 810

750
Houston, TexasTexas 77027
United States of America

NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS STOCKHOLDERS

To Be Held , 2019

NOTICE IS HEREBY GIVEN that the 2016 annual meeting (the “Annual Meeting”) of the shareholders ofDear Stockholders:

On                   , 2019, Isramco, Inc. (the “Company”“Company”) will be heldhold a special meeting of stockholders at the Company’s officesits corporate headquarters located at 24251001 West Loop South, Suite 810,750, Houston, Texas 77027, on June 27, 2016USA. The meeting will begin at                    9:00 A.M., local time, for the following purposes:time.

(i)The purpose of the meeting is:

Our board of directors (referred to elect six directorsas the “Board”) (with Mr. Haim Tsuff recusing himself because of his membership in the Purchaser Group (as defined below)), acting on the unanimous recommendation of a special committee formed by the Board, has approved the Merger Agreement and determined that the Merger Agreement and the transactions contemplated thereby are advisable and fair to, and in the best interests of, the Company to hold office untiland its stockholders (other than Purchaser Parties and any “affiliate” (within the next annual meetingmeaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of any of the shareholdersPurchaser Parties (referred to collectively as the “Purchaser Group”) and until their respective successors shall have been duly electedthe Section 16 officers of Isramco (determined pursuant to Rule 16a-1(f) under the Exchange Act, and qualified;referred to as the “Section 16 Officers”)). Our Board unanimously (other than Mr. Tsuff), recommends that the stockholders of the Company vote “FOR” the Merger Proposal, and “FOR” the Adjournment Proposal.

Your vote is very important, regardless of the number of shares of common stock of the Company, par value $0.01 per share (“Common Stock”) you own. The merger cannot be completed unless holders of (i) not less than 75% of the outstanding stock of the Company entitled to vote in the election of directors vote in favor of the Merger Proposal and (ii) a majority of the outstanding shares of Common Stock not beneficially owned by the Purchaser Group or any Section 16 Officer vote in favor of the Merger Proposal(the “Majority of the Minority Stockholder Approval”). If you fail to ratifyvote on the appointment of Malone Bailey, LLPMerger Proposal, the effect will be the same as a vote “AGAINST” the Company’s independent public accounting firm for the year ending December 31, 2016; and Merger Proposal.

(ii)Stockholders who do not vote in favor of the Merger Proposal and who object in writing to transact such other businessthe merger prior to the special meeting and comply with all of the applicable requirements of Delaware law, which are summarized in the section entitled “Special Factors—Rights of Appraisal” in the accompanying proxy statement and reproduced in its entirety as may properly come beforeAnnex D to this proxy statement, will be entitled to rights of appraisal to obtain the Annual Meeting and any adjournment thereof.fair value of their shares of our Common Stock.

The Boardholders of Directors has fixedrecord of our Common Stock at the close of business on                    May 13, 2016, as the record date for the determination of shareholders, 2019, are entitled to notice of and to vote at the Annual Meetingspecial meeting or at any adjournment of the meeting. All stockholders of record are cordially invited to attend the special meeting in person. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares will be represented at the special meeting if you are unable to attend. You also may vote your shares by proxy using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services.

If you fail to submit a proxy and do not attend the special meeting, your shares of Common Stock will not be voted, and will have the same effect as voting “AGAINST” the Merger Proposal, but will have no effect on the Adjournment Proposal. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” the Merger Proposal and “FOR” the Adjournment Proposal. You may revoke your proxy at any time before the vote at the special meeting by following the procedures outlined in the enclosed proxy statement. If you are a stockholder of record, attend the special meeting and wish to vote in person, you may revoke your proxy and vote in person.

The merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the Merger Agreement is included as Annex A to the accompanying proxy statement.

By order of the Board of Directors

ISRAMCO, INC.

Houston, Texas

               , 2019

TABLE OF CONTENTS

SUMMARY TERM SHEET RELATING TO THE MERGER

This Summary Term Sheet discusses the material information regarding the merger contained in this proxy statement, but does not contain all of the information in this proxy statement that is important to your voting decision with respect to the adoption of the Merger Agreement or the other matters being considered at the special meeting. We encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement, as this Summary Term Sheet may not contain all of the information that may be important to you. The items in this Summary Term Sheet include page references directing you to a more complete description of that topic in this proxy statement.

Throughout this proxy statement we refer to:

The Parties to the Merger Agreement (Page 66)

Isramco, Inc.
1001 West Loop South, Suite 750
Houston, Texas 77027
United States of America
Telephone: (713) 621-3882

Isramco, Inc., referred to herein as “Isramco,” the “Company,” “we,” “our” or “us,” is a Delaware corporation and an independent oil and natural gas company engaged in the exploration, development and production of oil and natural gas properties located onshore in the United States and ownership of various royalty interests in oil and gas concessions located offshore Israel. The Company also operates a well service company that provides well maintenance, workover services, well completion and recompletion services. The Company also operates a production services company that provides a full range of onshore production services U.S. oil and gas producers and a transportation company providing transport of liquefied petroleum products.

The Company’s common stock, par value $0.01 per share (“Common Stock”), is listed on the NASDAQ Capital Market under the symbol “ISRL.” On                   , 2019, the most recent practicable date before the printing of this proxy statement, 2,717,648 shares of Common Stock were issued and outstanding.

Additional information about Isramco is contained in its public filings, which are incorporated by reference hereto. See “Incorporation of Certain Documents by Reference” beginning on page 99 and “Where You Can Find Additional Information” beginning on page 99.

Naphtha Israel Petroleum Corporation, Ltd.
8, Granit Street, P. O. Box 2695
Petach Tikva, 4951407 Israel
Telephone: +972-3-922-9225

Naphtha Israel Petroleum Corporation, Ltd., referred to herein as “Naphtha,” is an Israeli public company, whose shares are listed for trading on the Tel-Aviv Stock Exchange (TLV:NFTA). The principal businesses of Naphtha are (directly and indirectly) exploration and production of oil and natural gas. Naphtha also is engaged in the field of commercial real-estate and hotel management in Israel and in Europe.

Naphtha Holding Ltd.

c/o Naphtha Israel Petroleum Corporation, Ltd.
8, Granit Street, P. O. Box 2695
Petach Tikva, 4951407 Israel
Telephone: +972-3-922-9225

Naphtha Holding Ltd., referred to herein as “NHL,” is an Israeli private company. NHL is a direct wholly owned subsidiary of Naphtha and its principal business is to hold shares of Common Stock of Isramco, of which it is the controlling stockholder.

I.O.C. – Israel Oil Company, Ltd.

c/o Naphtha Israel Petroleum Corporation, Ltd.
8, Granit Street, P. O. Box 2695
Petach Tikva, 4951407 Israel
Telephone: +972-3-922-9225

I.O.C. – Israel Oil Company, Ltd., referred to herein as “Parent,” is an Israeli private company and a direct wholly owned subsidiary of Naphtha and stockholder of Isramco. The principal businesses of Parent are (directly and indirectly) exploration and production of oil and natural gas. Parent is also engaged in the field of commercial real-estate and hotel management in Israel and in Europe.

Naphtha US Oil, Inc.

c/o Naphtha Israel Petroleum Corporation, Ltd.
8, Granit Street, P. O. Box 2695
Petach Tikva, 4951407 Israel
Telephone: +972-3-922-9225

Naphtha US Oil, Inc., referred to herein as “Merger Sub,” was incorporated under the laws of the State of Delaware and was formed by Parent solely for the purposes of effecting the merger. Merger Sub is a wholly owned subsidiary of Parent. Merger Sub has not engaged in any business other than in connection with the merger and other related transactions.

The Merger Proposal (Page 75)

You are being asked to consider and vote upon the proposal to adopt the Merger Agreement. The Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company surviving the merger as a subsidiary of Parent and NHL, and each outstanding share of Common Stock, other than shares owned by Isramco as treasury stock, shares owned by Parent or NHL, and shares owned by the holders of Common Stock who have properly and validly perfected, and not effectively withdrawn or lost, their statutory appraisal rights under Delaware law (such shares of Common Stock referred to as “dissenting shares”), will be converted into the right to receive $121.40 in cash per share, without interest and less any required withholding taxes (the “Merger Consideration”).

If the merger is consummated, Isramco will become a privately held company, owned by Parent and NHL. Parent and NHL will be owned by Naphtha and indirectly controlled by Mr. Haim Tsuff.

Conditions to the Merger (Page 86)

The obligations of Isramco, on the one hand, and the Purchaser Parties, on the other hand, to consummate the merger are subject to the satisfaction (or mutual waiver by Isramco and the Purchaser Parties, if permissible under applicable law, other than the first condition below, which cannot be waived) at or before the effective time, of the following conditions:

The obligation of Isramco to effect the merger is subject to the satisfaction or waiver by Isramco, at or before the effective time, of the following conditions:

The obligation of the Purchaser Parties to effect the merger is subject to the satisfaction or waiver by the Purchaser Parties, at or before the effective time, of the following conditions:

When the Merger Will be Completed (Page 72)

We anticipate completing the merger in the fourth quarter of 2019, subject to adoption of the Merger Agreement by Isramco’s stockholders as specified in this proxy statement, and the satisfaction of the other closing conditions.

Purposes and Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger (Page 23)

Based in part on the unanimous recommendation of the members of a committee of independent and disinterested directors that was established by the Board (referred to as the “Special Committee”) to, among other things, evaluate and negotiate a potential transaction with the Purchase Group, the Board unanimously (with Mr. Haim Tsuff recusing himself because of his membership in the Purchaser Group) determined that the Merger Agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, Isramco and the Isramco’s stockholders, other than the Purchaser Group and any Section 16 Officers. The Board unanimously (with Mr. Tsuff recusing himself because of his membership in the Purchaser Group) recommends that the stockholders of Isramco vote “FOR” the proposal to adopt the Merger Agreement, and “FOR” the proposal to adjourn the special meeting, if necessary, to ensure that any necessary supplement or amendment to the proxy statement accompanying this notice is provided to the Company’s stockholders a reasonable amount of time in advance of the special meeting or to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve adoption of the Merger Agreement, including the Majority of the Minority Stockholder Approval (the “Adjournment Proposal”). For a description of the reasons considered by the Special Committee and the Board for their recommendations, see “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 23. For descriptions of the fairness determinations made by the Special Committee, the Board and the Purchaser Group, see “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 23 and “Special Factors—Position of the Purchaser Group as to Fairness of the Merger” beginning on page 41.

The purpose of the merger for the Company is to enable its stockholders to realize the value of their investment in the Company through their receipt of the $121.40 in cash per share, representing a premium of approximately 18.9% over the closing price of the Common Stock of $102.10 on March 21, 2018, the last trading day prior to the public disclosure that Naphtha was in preliminary stages of evaluating the possibility of pursuing a transaction involving the acquisition of the outstanding shares of the Common Stock not already owned by Naphtha and its affiliates, and a premium of approximately 10.0% over the $110.36 purchase price per share initially offered by Naphtha, a premium of approximately 8.9% over the closing price of the Common Stock of $111.50 on May 20, 2019, the last trading day prior to the public announcement of the merger, and a premium of approximately 4.6% over the 30 trading-day average price of the Common Stock as of May 20, 2019, the last trading day prior to the public announcement of the Merger Agreement.

Opinion of Duff & Phelps, Financial Advisor to the Special Committee (See Page 28 and Annex B)

At a meeting of the Special Committee held on May 20, 2019, Duff & Phelps, LLC rendered an oral opinion, subsequently confirmed by delivery of a written opinion dated the same date, to the Special Committee to the effect that, as of such date and based upon and subject to the assumptions, qualifications and limiting conditions contained in the opinion and discussed with the Special Committee, the Merger Consideration to be received by the holders of Common Stock (other than the Purchaser Parties), was fair, from a financial point of view, to such holders (without giving effect to any impact of the merger on any particular stockholders other than in its capacity as a stockholder).

The full text of Duff & Phelps’ opinion is attached as Annex B to this proxy statement and sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations in rendering the opinion. Duff & Phelps’ opinion was provided solely for the use and benefit of the Special Committee in connection with its consideration of the merger. The opinion (i) did not address the merits of the underlying business decision to enter into the merger versus any alternative strategy or merger; (ii) did not address any transaction related to the merger; (iii) was not a recommendation as to how the Special Committee or any adjournment thereof. stockholder should vote or act with respect to any matters relating to the merger, or whether to proceed with the merger or any related transaction; and (iv) did not indicate that the Merger Consideration received is the best possibly attainable under any circumstances. The decision as to whether to proceed with the merger or any related transaction may depend on an assessment of factors unrelated to the financial analyses on which the opinion is based.

Purchaser Group Members’ Purposes and Reasons for the Merger (Page 40)

The Purchaser Group Members believe that as a private company Isramco will have greater operating flexibility, and management will be able to more effectively concentrate on long-term growth. Moreover, Isramco will not be subject to certain obligations and constraints, and related costs, associated with having publicly traded equity securities.

Position of the Purchaser Group as to Fairness of the Merger (Page 41)

Each of the Purchaser Group Members believes that the merger is substantively and procedurally fair to Isramco’s unaffiliated stockholders. Their belief is based on the factors described in “Special Factors—Position of the Purchaser Group as to Fairness of the Merger” beginning on page 41.

Certain Effects of the Merger (Page 45)

If the conditions to the closing of the merger are either satisfied or, to the extent permitted, waived, Merger Sub will be merged with and into Isramco, the separate corporate existence of Merger Sub will cease and Isramco will continue its corporate existence under Delaware law as the surviving corporation in the merger, with all of its rights, privileges, immunities, powers and franchises continuing unaffected by the merger. Upon completion of the merger, the Common Stock, other than shares owned by Isramco as treasury stock, shares owned by Parent or NHL, and shares owned by holders of dissenting shares, will be converted into the right to receive $121.40 per share, without interest and less any required withholding taxes. Following the completion of the merger, the Common Stock will no longer be publicly traded, and stockholders (other than the stockholders of Parent and NHL through their interests in such entities) will cease to have any ownership interest in Isramco.

Treatment of Isramco Equity Awards in the Merger (Page 55)

The Company does not have any outstanding equity awards.

Interests of Isramco’s Directors and Executive Officers in the Merger (Page 54)

In considering the recommendations of the Special Committee and of the Board with respect to the Merger Agreement, you should be aware that, aside from Mr. Tsuff’s interests as a stockholder of Isramco, Isramco’s directors and executive officers have interests in the merger that may be different from, or in addition to, those of other stockholders of Isramco generally. In particular, Mr. Haim Tsuff, as the indirect controlling owner of Naphtha, will indirectly control Isramco following the merger. Interests of executive officers and directors that may be different from or in addition to the interests of Isramco’s stockholders include:

The Special Committee and the Board were aware of the different or additional interests described in this proxy statement and considered those interests along with other matters in recommending or approving, as applicable, the Merger Agreement and the transactions contemplated thereby.

Regulatory Matters (Page 59)

No material federal or state regulatory approvals, filings or notices are required in connection with the merger other than the filing of this proxy statement and the related SEC Rule 13e-3 transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) and the filing of a certificate of merger with the Secretary of State of the State of Delaware by the Company and Merger Sub.

Termination (Page 87)

Isramco and Parent may terminate the Merger Agreement by mutual written consent at any time before the effective time, whether prior to or after receipt of the Requisite Stockholder Approval. In addition, either Isramco or Parent (as applicable) may terminate the Merger Agreement, subject to various exceptions described under “The Merger Agreement — Termination,” if:

Parent may terminate the Merger Agreement if:

Isramco may terminate the Merger Agreement if there is a breach or failure of any representation, warranty, covenant or agreement of the Purchaser Parties, which breach or failure has given rise to or would reasonably be likely to give rise to the failure of a condition to the Company’s obligations to complete listthe merger, and such condition would not be capable of shareholdersbeing satisfied prior to the Termination Date, or if capable of being satisfied, the failure of the condition is not cured within 30 business days following receipt of written notice from the Company.

Expense Reimbursement Provisions (Page 88)

Isramco is required to pay Parent an amount equal to $1.5 million (referred to as the “Isramco Expense Reimbursement”) under the following circumstances:

Parent is required to pay Isramco an amount equal to $1.5 million (referred to as the “Parent Expense Reimbursement”) under the following circumstances:

Specific Performance (Page 89)

Under certain circumstances, Isramco and the Purchaser Parties are entitled to specific performance of the terms of the Merger Agreement, in addition to any other remedy at law or equity.

Financing (Page 54)

Isramco and the Purchaser Parties estimate that the total amount of funds required to complete the merger and related transactions and pay related fees and expenses will be approximately $100 million. The merger is not subject to any financing condition and the Purchaser Parties intend to fund this amount from cash on hand (as further described in “Special Factors—Financing”).

Material U.S. Federal Income Tax Consequences of the Merger (Page 56)

If you are a U.S. Holder (as defined below), the receipt of cash in exchange for Common Stock pursuant to the merger will generally be a taxable transaction for U.S. federal income tax purposes. You are encouraged to consult your own tax advisors regarding the particular tax consequences to you of the exchange of Common Stock for cash pursuant to the merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws).

The Special Meeting (Page 72)

The special meeting will be held at the Company’s corporate headquarters located at 1001 West Loop South, Suite 750, Houston, Texas 77027, USA, on                   , 2019, beginning at                   local time.

Record Date and Quorum (Page 72)

The holders of record of the Common Stock as of the close of business on                   , 2019 (the record date for determination of stockholders entitled to notice of and to vote at the meeting will be available for examinationspecial meeting) are entitled to receive notice of and to vote at the officesspecial meeting.

The presence at the special meeting, in person or by proxy, of the holders of a majority of shares of Common Stock issued and outstanding on the record date and entitled to vote will constitute a quorum, permitting the Company for ten (10) days prior to conduct its business at the special meeting. Only shareholders

Required Votes (Page 73)

For the Company to complete the merger, under Delaware law, stockholders holding at least a majority in aggregate voting power of recordthe Common Stock outstanding at the close of business on May 13, 2016the record date must vote “FOR” the adoption of the Merger Agreement. However, pursuant to the Company’s certificate of incorporation, holders of not less than 75% of the outstanding shares of stock of the Company entitled to vote in the election of directors must vote “FOR” the adoption of the Merger Agreement. In addition, it is a non-waivable condition to the consummation of the merger that stockholders holding at least a majority of shares of outstanding Common Stock at the close of business on the record date that are not owned by the Purchaser Group Members or Section 16 Officers must vote “FOR” the adoption of the Merger Agreement.

Litigation (Page 64)

As of the date of this proxy statement, the Company is not aware of any pending litigation against the Company and/or its board of directors relating to the merger.

Dissenters’ Rights of Appraisal (Page 60 and Annex D)

Isramco stockholders who do not vote in favor of adoption of the Merger Agreement, who properly demand appraisal of their shares of Common Stock and who otherwise comply with all the requirements of Section 262 of the General Corporation Law of the State of Delaware (the “Record Date”“DGCL”) will be entitled to seek appraisal for, and obtain payment in cash for the judicially determined fair value of, their shares of Common Stock in lieu of receiving the Merger Consideration if the merger is completed. In addition to not voting in favor of the merger, the stockholder must deliver to Isramco a written demand for appraisal of such stockholder’s shares prior to the vote on the Merger Agreement and continue to hold such shares until the consummation of the merger.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting, the Merger Agreement and the merger. These questions and answers may not address all questions that may be important to you as a stockholder of Isramco. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

1.     Q:     Why am I receiving these materials?

2.     Q:     What will I receive in the merger?

3.     Q:When and where is the special meeting?

4.     Q:     Who is entitled to vote at the special meeting?

5.     Q:     What matters will be voted on at the special meeting?

6.     Q:     What vote of our stockholders is required to adopt the Merger Agreement?

7.Q:     What vote of our stockholders is required to approve the Adjournment Proposal?

8.     Q:     How does the Board recommend that I vote?

“FOR” adoption of the Merger Agreement.

BY ORDER OF THE BOARD OF DIRECTORS “FOR” the Adjournment Proposal.

Haim Tsuff 

ChairmanSee “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 23 for a discussion of the factors that the Special Committee and the Board

Chiefconsidered in deciding to recommend and/or approve, as applicable, the Merger Agreement. See also “Special Factors—Interests of Isramco’s Directors and Executive Officer 

President

April 29, 2016

PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.

ISRAMCO, INC.

2425 West Loop South Suite 810 

Houston Texas 77027 

PROXY STATEMENT Officers in the Merger” beginning on page 54.

FOR THE ANNUAL MEETING OF SHAREHOLDERS9.     Q:     What effects will the Merger have on Isramco?

TO BE HELD ON JUNE 27, 2016

Following the consummation of the merger, the registration of the Common Stock and our reporting obligations with respect to the Common Stock under the Exchange Act will be terminated upon filings with the Securities and Exchange Commission (“SEC”). In addition, upon the consummation of the merger, the Common Stock will no longer be listed on any stock exchange.

INTRODUCTION 10.     Q:   What will happen if the Merger is not consummated?

11.     Q:   What do I need to do now?

If you are a stockholder of record, you can ensure that your shares are voted at the special meeting by submitting your proxy via:

If you hold your shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your shares.

This Proxy Statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board of Directors1”2.     Q:   What will happen if I abstain from voting or the “Board”) of Isramco, Inc., a Delaware corporation (the “Company”) for use at the 2016 annual meeting (the “Annual Meeting”) of the Company’s shareholders (the “Shareholders”) to be held at the Company’s offices at 2425 West Loop South, Suite 810, Houston, Texas 77027, on Monday, June 27, 2016, at 9:00 A.M., local time, and any adjournment(s) thereof. 

In addition to mailing the proxy materials to each of our shareholders, our Board of Directors has made these proxy materials available to you on the Internet on or about May 17, 2016, at its transfer agent, American Stock Transfer, at www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=03348as described in the Notice of Internet Availability of Proxy Materials (the “Notice”), mailed to Shareholders of record and beneficial holders. Printed versions of these proxy materials have been delivered to you by mail, in connection with the Board of Directors’ solicitation of proxies for use at our 2016 Annual Meeting of Shareholders. Our Shareholders are invited to attend the annual meeting and are requestedfail to vote on the proposals presented at the special meeting?

If you fail to submit a proxy and do not attend the special meeting, your shares of Common Stock will not be voted, and will have the same effect as voting “AGAINST” the proposal to adopt the Merger Agreement, but will have no effect on the Adjournment Proposal.

13.     Q:   Can I change my vote after I have delivered my proxy?

14.     Q:   Should I send in my stock certificates or other evidence of ownership now?

15.     Q:   What happens if I sell my shares of Common Stock before completion of the merger?

16.     Q:   Who can help answer my other questions?

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Banks and Brokers Call: (212) 269-5550 

All Others Call Toll-Free: (866) 745-0267

Email: isramco@dfking.com

If your broker, bank or other nominee holds your shares, you can also call your broker, bank or other nominee for additional information.

SPECIAL FACTORS 

Background of the Merger 

Over the course of approximately eleven months, the Special Committee held numerous meetings (telephonically and in person) related to the merger and the other transactions contemplated thereby and led negotiations with the Purchaser Group, and the following chronology summarizes the key events and contacts that led to the signing of the Merger Agreement. It does not, however, purport to catalogue every conversation among the Special Committee, members of our management or the Special Committee’s representatives and other parties with respect to the merger.

Naphtha is an Israeli public company whose shares are listed for trading on the Tel Aviv Stock Exchange. Naphtha, its board of directors and its management team regularly review their investments and their corporate structure. Naphtha holds controlling interests in an Israeli public entity (Isramco Negev 2 Limited Partnership (“Isramco Negev 2”)) and in the Company. In November 2017, Mr. Haim Tsuff, Chairman of the Board of each of Naphtha, Equital, JOEL, Isramco Negev 2 and Isramco, Director of each of Parent, NHL and Merger Sub, and Co-Chief Executive Officer and President of Isramco, Mr. Eran Saar, Chief Executive Officer of Naphtha, and Mrs. Noa Lendner, General Counsel and Corporate Secretary of Naphtha, held a meeting with Baker Botts L.L.P (“Baker Botts”) to discuss preliminary U.S. legal considerations in the event that Naphtha were to decide to pursue a transaction to acquire the shares of the Company not already owned by the Purchaser Parties.

On March 6, 2018, Naphtha formally retained Baker Botts to serve as its U.S. legal counsel in connection with the potential transaction.

On March 12, 2018, representatives of Naphtha held a meeting with representatives of Baker Botts to discuss U.S. legal considerations related to a potential transaction, including Naphtha’s U.S. disclosure obligations should the Naphtha board determine to formally evaluate a potential transaction involving the Company.

On March 20, 2018, the Naphtha board held a meeting at which it determined to formally instruct its management to evaluate a potential transaction involving the Company.

On March 21, 2018, Naphtha filed a disclosure with the Tel Aviv Stock Exchange disclosing that it and certain of its affiliates were in the preliminary stages of evaluating the possibility of pursuing a transaction involving the acquisition of the unaffiliated shares of the Company or other going-private transactions involving the Company.

On March 21, 2018, Naphtha and certain of its affiliates filed an amendment to their Schedule 13D disclosing that they were in the preliminary stages of evaluating the possibility of pursuing a transaction involving the acquisition of the unaffiliated shares of the Company or other going-private transactions involving the Company.

On May 24, 2018, Naphtha delivered a letter to our Board indicating that its board of directors had approved engaging with our Board to explore the possibility of a transaction involving the acquisition by Naphtha for cash of all of the outstanding shares of the Company’s common stock not already owned by Naphtha. In this section, this letter from Naphtha is sometimes referred to as the “indication of interest” and the transaction described in such indication of interest is sometimes referred to as the “potential transaction.” The indication of interest stated that Naphtha and its applicable affiliates were only interested in acquiring the unaffiliated shares, and that they had no interest in selling their holdings in the Company to a third party and did not expect, in their capacity as stockholders of the Company, to vote in favor of any sale, merger or other similar transaction involving any third party. The indication of interest further advised our Board that Naphtha had expected our Board to appoint a special committee of independent directors to engage in the process and make a recommendation to our Board with respect to the potential transaction and that Naphtha had engaged Baker Botts as its U.S. legal advisor in connection with the potential transaction. The indication of interest included a copy of a draft confidentiality agreement for the Company to sign in connection with the potential transaction. The indication of interest did not discuss any pricing or economic terms with respect to any potential transaction.

On June 5, 2018, our Board (other than Mr. Tsuff, who recused himself) met telephonically to discuss the indication of interest. Following discussion, our Board concluded that it was in the best interests of the Company and the

Company’s stockholders, and specifically, the unaffiliated stockholders, to form a special committee of independent directors to review, evaluate and negotiate a potential transaction. Our Board then created the Special Committee consisting of Messrs. Max Pridgeon, Asaf Yarkoni and Nir Hasson. The Special Committee was authorized to retain independent legal and financial advisors, to negotiate on behalf of the stockholders and to take all such other actions as the Special Committee considered necessary or appropriate to carry out its mandate.

Following the formation of the Special Committee, during the remainder of June and the first week of July, the Special Committee telephonically interviewed numerous law firms, some of whom the Special Committee invited to make written proposals to act as the Special Committee’s independent legal advisor. During this proxy statement. These proxy materials include:period in which the Special Committee interviewed potential independent legal advisors, Mr. Anthony James, our proxy statementGeneral Counsel and Corporate Secretary, in consultation with the Special Committee, reviewed the form confidentiality agreement Naphtha included in the indication of interest, on behalf of the Company.

On July 9, 2018, after completing its review process of potential independent legal advisors, including reviewing written proposals from each law firm invited to make such proposals, the Special Committee selected Norton Rose Fulbright US, LLP (“NRF”) to serve as its independent legal advisor.

Following NRF’s engagement as independent legal advisor to the Special Committee through the end of July, NRF assumed primary responsibility for (and notice of)reviewing and negotiating the Annual Meeting;form confidentiality agreement with representatives from Baker Botts.

On August 3, 2018, the Company executed and delivered the confidentiality agreement to Naphtha, which included “standstill” and indemnification provisions which the Special Committee had requested.

On August 8, 2018, representatives from Baker Botts and NRF met telephonically to discuss the status of the potential transaction. Baker Botts indicated that Naphtha was still in the process of evaluating whether it would make a proposal. NRF indicated that the Special Committee intended to begin considering potential independent financial advisors.

Following the earlier telephonic meeting, the Special Committee and representatives from NRF met telephonically on August 8, 2018, to discuss, among other things, the process for the selection of an independent financial advisor. During the remainder of August through the first week of October, the Special Committee telephonically interviewed numerous financial firms, some of whom the Special Committee invited to make a written proposal, to act as the Special Committee’s independent financial advisor.

On October 4, 2018, representatives from Baker Botts and NRF met telephonically to discuss the status of the potential transaction. During that meeting, NRF advised Baker Botts that the Special Committee was fully committed to considering a potential transaction and intended to imminently engage an independent financial advisor. Later that day, Baker Botts met telephonically with Mr. James to inform Mr. James that, given other competing year-end priorities, Naphtha was unlikely to submit a proposal in connection with the potential transaction for at least another month or more.

On October 5, 2018, after completing its review process of potential independent financial advisors, including reviewing written proposals from each financial firm invited to make such proposals, the Special Committee selected Duff & Phelps Securities, LLC (“DPS”) and Duff & Phelps, LLC (“DPLLC” and, together with DPS, “Duff & Phelps”) to serve as its independent financial advisor. The Special Committee engaged Duff & Phelps based on Duff & Phelps’ qualifications, reputation, experience in the valuation of businesses and their securities, and its experience in valuing companies in the oil and gas industry. As a leading global independent provider of financial advisory and investment banking services, Duff & Phelps is regularly engaged in the valuation of businesses and securities and the preparation of opinions in connection with mergers, acquisitions, spin-offs, financings, and other strategic transactions (including “going-private” transactions like the Merger). In connection with Duff & Phelps’ engagement, the Special Committee requested that Duff & Phelps prepare and submit a preliminary report on the value of the Company to the Special Committee.

From its engagement through the last week of November, Duff & Phelps worked on a preliminary analysis of the potential valuation of the Company for the Special Committee. Representatives from Duff & Phelps conducted significant financial due diligence on the various segments of the Company, including multiple telephonic meetings with Mr. Edy Francis, our Co-Chief Executive Officer and Chief Financial Officer, and Mr. James.

On November 26, 2018, Duff & Phelps submitted preliminary findings on the potential valuation of the Company to the Special Committee, including an update on publicly available market conditions, preliminary valuation methodologies and related questions and a preliminary analysis of the historical trading range of the Common Stock. Later that day, representatives from Duff & Phelps met telephonically with the Special Committee and representatives from NRF to discuss such preliminary findings. Duff & Phelps noted the difficulty in providing an appropriate range of values for the Company given the uncertainty surrounding the outcome of the arbitration proceedings related to the Company’s overriding royalty interests in the Tamar and Dalit gas fields (collectively the “Tamar Field”) offshore Israel and the potential effects on the Company’s profitability. For additional information regarding these proceedings, see the disclosure related to the Tamar Field arbitration set forth in the Legal Proceedings section included in Part I, Item 3 of our Annual Report on Form 10-K for the year ended December 31, 2015, which includes our annual audited financial statements for fiscal 2015.  If you requested printed versions2018. Additionally, Duff & Phelps advised the Special Committee that it needed additional information to properly assess the Company’s projections of oil and gas production in the Tamar Field. For additional information regarding these proxy materials by mail, these proxy materials also include our 2016 annual meeting proxy card or a voting information card for submitting your vote in writing to us or your broker, as the case may be. projections, see Special Factors—Projected Financial Information” beginning on page 47.

PurposesOn January 7, 2019, the Naphtha board met to consider whether to make a proposal with respect to a potential transaction. At the meeting, the Naphtha board approved making an offer to the Special Committee, which was delivered to the Special Committee the following day.

On January 8, 2019, the Special Committee received a written non-binding proposal from Naphtha to pursue a potential negotiated acquisition of the 2016 Annual Meeting 

Atsubject shares for $110.36 per share in cash (the “Initial Proposal”). The Initial Proposal reflected a premium of 11.53% over the Annual Meeting,closing price of the Shareholders willCommon Stock on March 20, 2018, the date prior to Naphtha’s disclosure filed with the Tel Aviv Stock Exchange that it was in the preliminary stages of evaluating the possibility of pursuing a potential transaction, and an 8.09% premium to the closing share price on March 21, 2018, following which Naphtha also provided such disclosure in an amendment to its Schedule 13D. The Initial Proposal stated, among other things, that Naphtha would not move forward with the potential transaction unless it was approved by the Special Committee and that the transaction would be asked to:

(i) elect six directorssubject to a non-waivable condition requiring approval of holders of a majority of the unaffiliated shares. In addition, the Initial Proposal stated that Naphtha and its affiliates were only interested in acquiring the subject shares, that they had no interest in selling their holdings in the Company to a third party, and that they did not expect, in their capacity as stockholders of the Company, to hold office untilvote in favor of any sale, merger or other similar transaction involving any third party. Prior to the next annual meetingInitial Proposal, there had been no discussions or communications between the Company or the Special Committee (or their advisors), on the one hand, and Naphtha or its advisors, on the other, regarding the economic terms or pricing of a potential transaction.

On January 9, 2019, representatives of each of Baker Botts and NRF discussed the Initial Proposal and preliminary process considerations. Representatives of Baker Botts also informed NRF that Naphtha would be making the Initial Proposal public by an amendment to its Schedule 13D, which Naphtha filed with the SEC later that day.

On January 10, 2019, the Special Committee, along with representatives from each of NRF and Duff & Phelps, met telephonically to discuss the material terms of the ShareholdersInitial Proposal. The Special Committee and untilits advisors discussed various financial analyses performed by Duff & Phelps in its presentation to the Special Committee, including a preliminary analysis of the historical trading range of the Common Stock and a preliminary analysis of the premiums paid in selected merger and acquisition transactions announced since January 1, 2016, involving a majority stockholder acquiring the remaining shares in the applicable company. The Special Committee and its advisors discussed the assumptions underlying those methodologies and the results of such analyses in comparison to the Initial Proposal. Duff & Phelps also informed the Special Committee that its preliminary financial analyses expressed some uncertainties that it had yet to resolve. The Special Committee determined that upon its initial review, the price of $110.36 per share appeared to undervalue the Company. The Special Committee also reviewed potential responses to the Initial Proposal with its advisors. Ultimately, the Special Committee determined the appropriate course of action was for Duff & Phelps to obtain additional information to help resolve the open issues identified in its preliminary financial analyses of the Company before responding to the Initial Proposal and to gather insight into the assumptions and methodologies used by Naphtha in formulating its internal valuation of the Company. The Special Committee also discussed whether it was appropriate or useful to reach out to other potential investors in connection with a potential acquisition of the Company or the subject shares. Given the statement by Naphtha in

the Initial Proposal that Naphtha and its affiliates were interested only in acquiring the subject shares, and that they were not interested in selling their respective successors shall have been duly electedshares of Common Stock to a third party and qualified;  did not expect, in their capacity as stockholders of the Company, to vote in favor of any sale, merger or other similar transaction involving any third party, Duff & Phelps was of the view, and the Special Committee, after discussion with its advisors, agreed that, based on the statement from Naphtha, the fact that any potential purchaser would only be able to acquire the unaffiliated shares, the limited trading volume of the Common Stock, and the current and historical market prices for the Common Stock, any efforts to reach out to other third parties to determine whether those third parties might be interested in an acquisition of the Company or the unaffiliated shares would be futile and not a prudent use of Company resources. The Special Committee, in consultation with its advisors, determined that the more prudent approach instead would be to obtain the most favorable price that could be obtained for the unaffiliated shares through negotiations with the Purchaser Group.

(ii) ratifyOn January 14, 2019, representatives from Baker Botts and representatives from NRF met telephonically to discuss the appointmentSpecial Committee’s preliminary assessment of Malone Bailey, LLP asthe Initial Proposal. Representatives from NRF conveyed to Baker Botts that it was requesting certain information to assist Duff & Phelps in its assessment of the Company and the Initial Proposal. Following that meeting, through Baker Botts, representatives from Naphtha agreed to provide a presentation to the Special Committee and its advisors that would clarify the assumptions and methodologies used by Naphtha in formulating its internal valuation of the Company and answer any questions the Special Committee and its advisors may have in connection with their valuation analysis of the Company. The Special Committee and its advisors agreed to schedule a meeting for January 29, 2019 to discuss this presentation.

On January 22, 2019, Naphtha provided the Special Committee and its advisors with a draft of Naphtha’s presentation for the January 29 meeting. The presentation provided additional detail regarding the assumptions and methodologies used by Naphtha in formulating its internal valuation of the Company.

On January 27, 2019 (using a presentation dated January 25, 2019) and January 28, 2019, Duff & Phelps made preliminary presentations to the Special Committee. The January 25, 2019 presentation contained, among other things, an update on publicly available market conditions, a review of the Initial Proposal, and a preliminary financial analysis of the Company utilizing a sum-of-the parts analysis and the January 28, 2019 presentation contained, among other things, an update to the net debt and SG&A figures utilized in the equity value calculations, based on Naphtha’s responses to Duff & Phelps’ written questions.

From January 24, 2019 through January 28, 2019, after reviewing the draft presentation, representatives from Duff & Phelps, at the direction of the Special Committee, submitted written questions to Naphtha regarding the draft presentation and their independent financial review of the Company. Naphtha subsequently provided written responses to Duff & Phelps’ written questions.

On January 29, 2019, the Special Committee and representatives from each of NRF and Duff & Phelps met telephonically with representatives of Naphtha, including Mr. Saar, Mr. Eran Lendner, Vice President of Business Development of Naphtha, Mr. Eitan Volach, Director of Finance of Naphtha, and representatives of Baker Botts, to discuss Naphtha’s presentation, Duff & Phelps’ written questions and Naphtha’s written responses thereto. During the meeting the parties discussed various matters including the arbitration proceedings related to the Tamar Field, the Company’s independentprojections related to production of Tamar Field, and public accountingcompanies similarly situated to the Company.

On January 31, 2019, the Special Committee held a telephonic meeting, which representatives from each of NRF and Duff & Phelps attended, to discuss the Special Committee’s response to the Initial Proposal in light of the January 29, 2019 meeting with Naphtha. Representatives of Duff & Phelps indicated to the Special Committee that they still had open questions regarding their financial analysis of the Company and the Initial Proposal. Specifically, Duff & Phelps needed to conduct additional diligence regarding the potential financial impact of the arbitration proceedings related to the Tamar Field and the Company’s projections related to production in the Tamar Field. The Special Committee requested that representatives from Duff & Phelps reach out to representatives from Naphtha to ask for additional information needed for Duff & Phelps to resolve these open issues. Representatives from NRF also suggested that representatives from Duff & Phelps discuss the arbitration proceedings related to the Tamar Field with Gornitzky & Co (“Gornitzky”), the Israeli law firm representing the Company in the arbitration proceedings related to the Tamar Field. Later that day, at the direction of the Special Committee, representatives from Duff & Phelps, along with Mr. Asaf Yarkoni, reached out to representatives from Naphtha regarding these open matters in their financial analysis of the Company.

During the week of February 3, 2019, representatives from Naphtha provided representatives from Duff & Phelps with additional documents related to the Company’s projections related to production of the Tamar Field. Representatives from NRF and Duff & Phelps also discussed the arbitration proceedings related to the Tamar Field with Gornitzky. Although Duff & Phelps determined the additional documents regarding the Tamar Field were sufficient for the year ending December 31, 2016;purposes of its financial analysis, after further discussing the arbitration proceedings related to the

Tamar Field with representatives from NRF, Duff & Phelps recommended to the Special Committee that because Gornitzky was affiliated with both the Company and Naphtha in the arbitration proceedings related to the Tamar Field, the Special Committee should engage independent Israeli counsel to review Gornitzky’s assessment of the matter. Following this recommendation, the Special Committee engaged Pearl Cohen Zedek Latzer Baratz LLP (“Pearl Cohen”) to advise the Special Committee on the arbitration proceedings related to the Tamar Field and other Israeli legal matters in connection with the potential transaction.

(iii) transact such other business as may properly come beforeOn February 11, 2019, the Annual MeetingSpecial Committee and any adjournment thereof.

Voting Rightsrepresentatives from each of Pearl Cohen, Duff & Phelps and NRF met telephonically with representatives from Gornitzky for the purpose of allowing representatives from Pearl Cohen to discuss the arbitration proceedings related to the Tamar Field with representatives from Gornitzky in order for Pearl Cohen to independently assess Gornitzky’s analysis.

To haveOn February 13, 2019, the Special Committee held a validtelephonic meeting, which representatives from each of Pearl Cohen, Duff & Phelps and NRF attended, for the purpose of allowing representatives from Pearl Cohen to debrief the Special Committee and its advisors on their analysis of the Shareholders,arbitration proceedings related to the Tamar Field. During the meeting, representatives from Pearl Cohen advised the Special Committee and its advisors that they were largely in agreement with Gornitzky regarding the likely results of the proceedings. Based on Pearl Cohen’s assessment, representatives from Duff & Phelps indicated to the Special Committee that they had sufficient information to move forward with their valuation analysis of the Company.

On February 17, 2019, after Duff & Phelps updated its financial analysis of the Company, the Special Committee held a quorumtelephonic meeting, which representatives from Duff & Phelps and NRF attended to review and discuss Duff & Phelps’ financial analysis and a potential response to the Initial Proposal. Representatives from Duff & Phelps discussed with the Special Committee certain assumptions and valuation methodologies contained in its valuation analysis of the Company and the Initial Proposal. The Special Committee then discussed the longer-term prospects of the Company, including the uncertainty regarding the results of the arbitration proceedings related to the Tamar Field and the Company’s projections regarding production in the Tamar Field. The Special Committee also considered, among other things, how the Initial Proposal compared to the current and historical trading price of the Common Stock, that the Initial Proposal would provide the Company’s unaffiliated stockholders with certainty of value and liquidity, that the Initial Proposal likely represented the starting point for negotiations and that the final price per share at which Naphtha may offer could be significantly higher. In addition, the Special Committee, after discussions with its advisors, concluded that an acquisition of the Company or the unaffiliated shares by a third party was not viable due to the fact that Naphtha and its affiliates would be required to sell their ownership interest in the Company (which Naphtha had stated that they were unwilling to do) and a sale of the unaffiliated shares to a third party would be highly improbable without the cooperation of Naphtha. After discussion and taking into account the foregoing, the Special Committee determined that the Initial Proposal’s offer of $110.36 per share undervalued the Company and that Naphtha would likely increase its offer price. The Special Committee weighed the advantages and disadvantages of various approaches to formulating a response (or no response) to the Initial Proposal. The Special Committee determined to make a counterproposal to Naphtha. In weighing these advantages and disadvantages, the Special Committee considered both making no response to the Initial Proposal and rejecting the Initial Proposal without making a counteroffer, but concluded, after taking into account, among other factors, the limited trading volume of the Common Stock, the Special Committee’s familiarity and understanding of the Company’s Shareholders is necessary. A quorum consistsbusiness and competitive dynamics impacting the Company, the duration and tenor of Shareholders holdingnegotiations since the Initial Proposal, and the uncertainty concerning the Company’s financial performance and prospects, that responding with a counterproposal would be in the best interests of the Company and the unaffiliated stockholders. The Special Committee resolved to further consider Duff & Phelps’ financial analysis and deliberate on the Initial Proposal and possible counterproposal.

On February 20, 2019, the Special Committee held a telephonic meeting, which representatives from each of Duff & Phelps and NRF attended, to review and discuss a counterproposal. The Special Committee discussed issues, which Duff & Phelps identified in its analysis, with respect to the various assumptions and valuation methodologies used by Naphtha in its internal valuation of the Company and discussed with representatives from Duff & Phelps the magnitude of such issues and the strength of the Special Committee’s potential criticism of such valuation methodologies and potential alternative assumptions and valuation methodologies the Special Committee could suggest. Specifically, representatives from Duff & Phelps discussed with the Special Committee that (i) Naphtha’s internal valuation analysis omitted potential tax advantages Naphtha might realize in connection with a potential transaction and (ii) Duff & Phelps initially disagreed with Naphtha’s internal valuation analysis with respect to selected public

companies used by Naphtha to formulate the various discount rates used in discounting the Company’s financial projections for each of the Company’s segments, which could result in a lower valuation of the Company. The Special Committee further considered with its advisors what price for the subject shares to include in its counterproposal. The Special Committee resolved to further review Duff & Phelps’ financial analysis of the Company, the Initial Proposal and to continue to consider its options.

On February 21, 2019, the Special Committee held a telephonic meeting, which representatives from each of Duff & Phelps and NRF attended, to finalize the price to include in its counterproposal. After considering its options, the Special Committee determined to make a counterproposal that Naphtha and its affiliates acquire the subject shares for $145.00 per share in cash. The Special Committee determined that even though such price was significantly higher than what Naphtha was likely to accept, based on the views of Naphtha’s assumptions and internal valuation methodologies discussed with Duff & Phelps in the February 20, 2019 telephonic meeting, counter-proposing with such a high offer could be an effective negotiating tactic to elicit an increased offer price from Naphtha. As part of that negotiating strategy, various arguments were developed to support the counterproposal, including (i) the potential tax advantages to Naphtha in connection with the potential transaction, and (ii) the characteristics regarding selected public companies used by Duff & Phelps in formulating an internal discount rate with respect to the Company’s financial projections. That same day, in accordance with directives of the Special Committee, representatives from Duff & Phelps conveyed by email the principal terms of the Special Committee’s counterproposal to Baker Botts along with an assessment of the key issues identified by the Special Committee with the assumptions and valuation methodologies Naphtha used in its internal valuation of the Company.

On February 27, 2019, the Special Committee and representatives from each of NRF and Duff & Phelps met telephonically with representatives of Naphtha  and representatives of Baker Botts, to discuss the issues with Naphtha’s assumptions and internal valuation methodologies identified by representatives of Duff & Phelps in their email to representatives from Baker Botts. The purpose of this discussion was for Duff & Phelps to help Naphtha’s representatives understand, from a technical perspective, the potential reasons for the valuation gap between Naphtha’s internal valuation analysis of the Company and the Special Committee’s counterproposal, including with respect to the arguments noted above.

On February 28, 2019, representatives from Baker Botts, on behalf of Naphtha, emailed representatives from Duff & Phelps requesting that (i) the Special Committee revisit its analysis on some of the issues identified by representatives from Duff & Phelps in their email conveying the Special Committee’s counterproposal as it relates to perceived tax advantages to Naphtha in connection with the potential transaction, (ii) Duff & Phelps provide additional information with respect to the cost of capital used in Duff & Phelps’ analysis, and (iii) the Special Committee revise its counterproposal.

On March 7, 2019, the Special Committee held a telephonic meeting, which representatives from Duff & Phelps and NRF attended, to discuss the Special Committee’s response to Baker Botts’ February 28, 2019 email. After discussing with its advisors, the Special Committee determined that the best course of action for continuing the negotiations was to not submit a revised counterproposal. That same day, at the direction of the Special Committee representatives from Duff & Phelps responded to Baker Botts, emailing the information Baker Botts requested and noting the Special Committee was not prepared to revise its February 21, 2019 counterproposal.

On March 11, 2019, representatives from Baker Botts, on behalf of Naphtha, responded to the March 7, 2019 email from Duff & Phelps’ representatives by requesting that the Special Committee and its advisors meet with representatives from Naphtha and its advisors in-person in Houston, Texas to negotiate the differences in valuation between the Initial Proposal and the Special Committee’s counterproposal. Baker Botts also provided the Special Committee and its advisors with a tax ruling from Israeli authorities with respect to the tax treatment of any sale by the Company of its interest in the Tamar Field.

On March 13, 2019, the Special Committee held a telephonic meeting, which representatives from each of Duff & Phelps and NRF attended, to discuss various valuation arguments raised by Naphtha.

On March 15, 2019, representatives of Duff & Phelps, at the direction of the Special Committee, emailed representatives of Naphtha and Baker Botts acknowledging Naphtha’s view that any tax benefit to the Company from a step-up in basis in a subsequent sale of its interests in the

Tamar Field would have offsetting tax consequences but reaffirmed that the Special Committee’s position on valuation remained largely unchanged.

On March 19, 2019, representatives from Baker Botts, on behalf of Naphtha, responded to Duff & Phelps’ March 15, 2019 email, reiterating Naphtha’s willingness to move forward with the proposed transaction and belief that in-person negotiations would be the most efficient means to reach agreement on valuation. In that email, Baker Botts also provided additional information to the Special Committee and its advisors concerning Naphtha’s views on the appropriate discount rate to apply to any valuation of the Company and reaffirmed Naphtha’s views with respect to certain tax matters.

On March 21, 2019, the Special Committee indicated to representatives from Naphtha that the Special Committee would not agree to meet in-person unless Naphtha agreed to materially increase its Initial Proposal offer of $110.36 per share for the subject shares.

On March 22, 2019, representatives from Naphtha responded to the Special Committee’s email by revising the Initial Proposal, offering to acquire the subject shares for $115.00 per share in cash (the “Revised Proposal”) and again requested that the Special Committee and its advisors meet with Naphtha and its advisors in Houston.

On March 23, 2019, the Special Committee held a telephonic meeting, which representatives from Duff & Phelps and NRF attended, to review the Revised Proposal and discuss the Special Committee’s potential response thereto, including whether to accept the invitation to meet in Houston. The Special Committee discussed the advantages and disadvantages of the Revised Proposal and whether to accept Naphtha’s invitation to attend in-person meetings to negotiate the terms of a potential transaction based on the price offered in the Revised Proposal. After extensive discussion, the Special Committee determined, based on the duration and tenor of the negotiations and that Naphtha had already materially increased its offer, that Naphtha was not likely to further increase its offer unless the Special Committee met with representatives from Naphtha in-person. The Special Committee then determined to respond to the Revised Proposal by agreeing to schedule in-person meetings with representatives from Naphtha in Houston during the first week of April.

On March 25, 2019, the Special Committee and representatives from Naphtha agreed that they and their respective advisors would meet at Duff & Phelps’ Houston offices on April 3 and 4, 2019 to negotiate the per share price and other material terms of the potential transaction.

On March 28, 2019, the Special Committee held a telephonic meeting, which representatives from

each of Duff & Phelps and NRF attended, to discuss various topics related to the in-person negotiations to be held on April 3 and 4, 2019 in Houston, Texas.

On April 2, 2019, the Special Committee met with representatives from each of Duff & Phelps and NRF ahead of the in-person negotiations with Naphtha to discuss various topics related to the in-person negotiations.

On April 3, 2019, the Special Committee and representatives from each of NRF and Duff & Phelps met with representatives from Naphtha, including Messrs. Saar and Lendner, and representatives from Baker Botts at Duff & Phelps’ Houston offices. At the meeting, representatives from Naphtha made a presentation of their valuation analysis in arriving at the Revised Proposal, emphasizing that it reflected valuation assumptions, particularly with respect to the outcome of the arbitration proceedings related to the Tamar Field, that were reasonable to the Company. Naphtha’s April 3, 2019 presentation to the Special Committee included the Company’sforecasts for the Company’s production services segments projecting an EBITDA of $3.8 million and $5.8 million for fiscal years 2019 and 2020, respectively.  Such forecasts are referred to in the section of this proxy statement titled “Special Factors—Opinion of Duff & Phelps, Financial Advisor to the Special Committee” as the “Naphtha Projections.” Naphtha’s presentation also responded to the Special Committee’s positions with respect to the assumptions and valuation methodologies used by Naphtha in its internal valuation of the Company arguing that (i) as an Israeli taxpayer, the potential tax advantages outlined by Duff & Phelps were unlikely to be applicable and (ii) the comparable royalty interest public companies suggested by Duff & Phelps used in calculating a discount rate for Tamar Royalties were not appropriate since, among other things, each was a United States company focused on U.S. onshore oil and gas assets, as opposed to an Israeli company focused on a single offshore Israel natural gas asset, although Duff &

Phelps’ discount rate calculation included a specific country risk premium for Israel to account for this fact. Representatives from Naphtha concluded their presentation by expressing their unwillingness to further increase Naphtha’s offer. At the direction of the Special Committee, representatives from Duff & Phelps gave a presentation to the representatives from Naphtha providing an analysis of the valuation of the Company, and the assumptions and valuation methodologies used in Naphtha’s internal valuation. Representatives from Duff & Phelps suggested $140.00 per share as the appropriate price for the valuation of the Company, as previously unanimously authorized by the Special Committee, believing that it would likely cause Naphtha to materially raise its offer price. Following Duff & Phelps’ presentation, each side agreed to break for the evening and return the next day to continue negotiations.

On April 4, 2019, the in-person meetings continued, and Naphtha increased its offer to $121.40 per share in cash for the subject shares (the “Final Proposal”). The Final Proposal represented a premium of 18.9% over the closing price of the Common Stock of $102.10 on March 21, 2018, the last trading day prior to the public disclosure that Naphtha was in preliminary stages of evaluating the possibility of pursuing a transaction involving the acquisition of the outstanding shares of the Common Stock not already owned by Naphtha and its affiliates, and an increase of approximately 10% over the Initial Proposal. In connection with the Final Proposal, Naphtha’s representatives emphasized their belief that their assumptions and valuation methodologies were more reflective of the Company, responded in good faith to the issues identified by Duff & Phelps with Naphtha’s internal assumptions and valuation methodologies, and informed the Special Committee and its advisors that Naphtha had, since the date of the Revised Proposal, several developments regarding the natural gas market in Israel had occurred, bearing potentially adverse effects for the Tamar Field, including (i) Tamar Partners had lost a significant bid for a contract to sell gas from the Tamar Field to the Israel Electric Corporation in 2020 until mid-2021 and (ii) the Parliament of Jordan had recently called the Jordanian government to terminate the Jordanian electric company gas purchase agreement from the Leviathan field. Naphtha’s representatives also emphasized that the Final Proposal was their best and final offer, stating that as an Israeli public company, the protracted negotiations over the potential transaction had created significant market uncertainty that Naphtha needed to resolve, and, therefore, if the Company did not timely accept the Final Proposal it could be withdrawn without Naphtha making another offer for the foreseeable future.

Following its receipt of the Final Proposal, the Special Committee and its advisors from NRF and Duff & Phelps excused themselves from the meeting so that they could consider the Final Proposal privately. The Special Committee discussed, with input from the representatives from NRF and Duff & Phelps, the Final Proposal and the accompanying presentation by Naphtha’s representatives. In evaluating the Final Proposal, the Special Committee members discussed, among other factors, that (i) they believed a transaction at such a price would provide the Company’s unaffiliated stockholders with certainty of value and liquidity, particularly in light of the relatively limited trading volume of the Common Stock, (ii) the proposed acquisition of the subject shares by Naphtha and its affiliates had been subject from the time of the Initial Proposal to approval by the Special Committee and a non-waivable condition requiring the approval by holders of a majority of the unaffiliated shares, of(iii) their belief that while there was room for disagreement with the common stockissues identified by Duff & Phelps with Naphtha’s assumptions and valuation methodologies used in its internal valuation of the Company, (the “Common Stock”) issuedNaphtha’s position on each of such issues was reasonable, (iv) their agreement, after consulting with their advisors, that many of Naphtha’s internal assumptions and outstandingvaluation methodologies were fair and entitledin fact favorable to votethe Company, (v) they believed, based on a number of factors, including the statements from Naphtha’s representatives and the duration and tenor of negotiations, the Final Proposal was the highest price that Naphtha would be willing to offer, and that further negotiation ran the risk that Naphtha might be unable or unwilling to enter a proposed transaction, in which event the unaffiliated stockholders would lose the opportunity to accept the premium being offered. Following this discussion, the Special Committee approved proceeding with negotiations on definitive agreements on the Record Date present in person or by proxy atbasis of the Annual Meeting. Shareholders who execute proxies retain the right to revoke them at any time by notice in writingFinal Proposal. The Special Committee, representatives from each of Duff & Phelps and NRF then returned to the Secretarymeeting, advised representatives from Naphtha of the Special Committee’s decision and the parties collectively discussed process and next steps.

On April 11, 2019, the Special Committee held a telephonic meeting, which representatives from each of Duff & Phelps and NRF attended, to discuss Duff & Phelps’ preparation of its fairness analysis and timeline for delivering its fairness opinion. The Special Committee also held a telephonic meeting among themselves to discuss the in-person negotiations held earlier with Naphtha and the Final Proposal.

On April 12, 2019 and April 16, 2019, Baker Botts sent NRF an initial draft of the Merger Agreement and an initial draft of the Support Agreement, respectively.

On May 2, 2019 and May 4, 2019, the Special Committee, along with representatives from each of NRF and Duff & Phelps met telephonically to discuss Baker Botts’ initial drafts of the Merger Agreement and Support Agreements. Representatives from NRF reviewed with the Special Committee the key provisions of the Merger Agreement. The Special Committee asked questions of NRF throughout the meeting and suggested revisions to the Merger Agreement. The Special Committee’s questions included inquiries regarding the mechanics of the Merger Agreement and how the draft from Baker Botts compared to merger agreements in comparable transactions. The Special Committee directed NRF to send the revised versions of each of the Merger Agreement and Support Agreement to Baker Botts as soon as NRF completed its revisions and incorporated the Special Committee’s comments.

On May 8, 2019, representatives from NRF sent the revised Merger Agreement to Baker Botts. The following day representatives from NRF sent Baker Botts the revised Support Agreement.

On May 9, 2019, representatives from NRF discussed certain provisions of the revised Merger Agreement with representatives from Baker Botts, including, among other things, NRF’s addition of (i) a representation by the Purchaser Parties with respect to certain disclosures made to the Special Committee in connection with the negotiations, (ii) a corresponding indemnity for liabilities arising out of any inaccuracies or breach of such representation and (iii) a condition to the Company’s obligation to close being subject to payment of certain transaction expenses. During that telephonic meeting, representatives from Baker Botts also indicated that NRF’s comments to the Support Agreement were acceptable in all material respects. On May 10, 2019, representatives from Baker Botts met telephonically with Messrs. Lendner and Saar and Mrs. Lendner to discuss NRF’s draft of the Merger Agreement. Based on the discussions with the representatives from NRF and the representatives from Naphtha, Baker Botts sent a revised draft of the Merger Agreement to representatives from NRF which, among other revisions, removed the added representation and related indemnification obligation of the Purchaser Parties and replaced the added closing condition with a new covenant obligating payment of the transaction expenses by the Company and the Purchaser Parties.

Throughout the week of May 13, 2019, the Special Committee extensively reviewed the terms of the Merger Agreement and NRF, as counsel to the Special Committee, and Baker Botts, as counsel to Naphtha, continued to negotiate the terms of the Merger Agreement. Included in these negotiations were negotiations regarding the terms of the no-shop provision, the definition and scope of both “intervening event” and “superior proposal”, the ability of the Company to effect a “change in recommendation,” the closing condition relating to appraisal rights and the termination provisions. Based on the negotiations, Baker Botts delivered revised drafts of the Merger Agreement to NRF on each of May 15, 2019 and May 17, 2019. The Company’s Bylaws provided for the indemnification of the members of the Board to the maximum extent authorized by revocationthe DGCL, which permits contracts between the Company and its directors with respect to indemnification, and since each member of the Board would be a third party beneficiary to the Merger Agreement, in person atrecognition of and in addition to such indemnification, on May 17, 2019, representatives from NRF informed Baker Botts that the members of the Board (other than Mr. Tsuff) had requested that the Company and Purchaser Parties enter into a stand-alone indemnification agreement with, and for the benefit of, each such member, to provide for indemnification and advancement of expenses on terms substantially similar to those already provided in the Merger Agreement. NRF subsequently provided a draft of the form of indemnification agreement to Baker Botts which provided for certain ongoing indemnification obligations of Parent, NHL and the surviving corporation, and coverage under directors’ and officers’ liability insurance policies for the director party thereto, on terms substantially similar to those provided in the Merger Agreement. On May 18, 2019, representatives from Baker Botts confirmed to representatives of NRF that the proposed indemnification agreements were acceptable to Naphtha. For a summary of the indemnification agreements, see “Special Factors—Interests of Isramco’s Directors and Executive Officers in the Merger—Indemnification/Insurance” beginning on page 56.

Throughout May 18, 2019 and May 19, 2019, NRF and Baker Botts finalized the disclosure schedules of the Merger Agreement. On May 19, 2019, Baker Botts provided Naphtha copies of the final form of the Merger Agreement, the Support Agreement and the form of indemnification agreement and NRF provided the same to the Special Committee and our Board along with a summary of the key terms of the Merger Agreement for their review. For a

detailed summary of the Merger Agreement, see “The Merger Agreement” beginning on page 75, for a detailed summary of the Support Agreement, see “Agreements With Purchaser Group Members Involving Common Stock—Support Agreement” beginning on page 98.

On May 20, 2019, Mr. Saar, on behalf of the Purchaser Parties, confirmed to the Special Committee and representatives NRF and Duff & Phelps, an email confirming that the information provided by the Purchaser Parties in the course of the negotiation with respect to the Company’s overriding royalty interest (“ORRI”) in Tamar and the market risks and challenges for Tamar was provided in good faith and, that to the Purchaser Parties’ knowledge, (a) represented accurate information as of its date and (b) did not omit any material information in their possession that would have reasonably supported a higher valuation. Mr. Saar also clarified that such information included market and industry data and forecasts, some of which had been derived from industry and other third party sources and that since Naphtha was not operating the Tamar Field and it relied on the operator for information with respect to the field, which was not independently verified by Naphtha.

On May 20, 2019, the Special Committee, along with its legal and financial advisors, met telephonically and discussed, among other things, the status of negotiations with Naphtha. Duff & Phelps reviewed with the Special Committee its financial analysis of the Merger Consideration and delivered an oral opinion, confirmed by delivery of a written opinion dated May 20, 2019, to the Special Committee to the effect that, as of that date and based on and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Duff & Phelps in preparing its opinion, the Merger Consideration to be received by holders of Common Stock (other than the Purchaser Parties, and without giving effect to any impact of the merger on any particular stockholder other than in its capacity as a holder of Common Stock) pursuant to the Merger Agreement was fair, from a financial point of view, to such unaffiliated holders. Representatives from NRF reviewed the principal terms of the Merger Agreement, and the Support Agreement with the Special Committee. The Special Committee and representatives from NRF also discussed that the Merger Agreement included a closing condition requiring that the Merger Agreement be approved by the holders of a majority of the unaffiliated shares.

Following this review and discussion, the Special Committee expressed its unanimous view that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger, were advisable and fair to, and in the best interests of, the Company and the Company’s stockholders, other than the Purchaser Group and any Section 16 Officers, and thus that it would recommend approval of the Merger Agreement and the transactions contemplated thereby, including the merger, by the Company’s Board. For the basis of the Special Committee’s determination in this regard, please see“Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger—The Special Committee” beginning on page 23.

Following the meeting of the Special Committee, our Board (with Mr. Tsuff recusing himself) met telephonically with representatives from NRF, and Messrs. Francis and James, to receive and discuss the Special Committee’s recommendation concerning the Final Proposal. At this meeting, Messrs. Francis and James and representatives from NRF reviewed with our Board the terms of each of the definitive Merger Agreement and Support Agreement as well as resolutions to be considered by our Board. The Special Committee recommended to our Board that it approve the Merger Agreement, the transactions contemplated by the Merger Agreement and related matters. Messrs. Francis and James then removed themselves from the meeting. Following the Special Committee’s recommendation and the Board’s own discussions and deliberations, the Board approved the Merger Agreement and the transactions contemplated thereby, including the merger. The Board determined that the Merger Agreement and the transactions contemplated thereby, including the merger, were advisable and fair to, and in the best interests of, the Company and the Company’s stockholders, other than the Purchaser Group and any Section 16 Officers, and resolved to recommend to the Company’s stockholders that they approve the adoption of the Merger Agreement. For the basis of the Board’s determination in this regard, please see “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger—Recommendation of the Board” beginning on page 28.

Contemporaneously with the meeting of the Board, the board of directors of Naphtha met to review and discuss the final forms of the Merger Agreement and the Support Agreement, and the transactions contemplated thereby, including the merger. Following such discussion, the Naphtha board approved the Merger Agreement, the Support Agreement and the transactions contemplated thereby, including the merger.

Later that day, the Merger Agreement was executed by the Company and the Purchaser Parties, the Support Agreement was executed by the Company, NHL, Parent, and Mr. Tsuff, and each director of the Company (other than Mr. Tsuff) entered into an indemnification agreement with the Company and the Purchaser Parties. Following the closing of trading on the U.S. public stock markets, the Company issued a press release announcing the execution of the Merger Agreement, the Support Agreement and the entry into the indemnification agreements.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger 

Both the Special Committee and our Board believe, based on their consideration of the factors described below, that the Merger Agreement and the transactions contemplated by it, including the merger, are substantively and procedurally fair to the Company’s unaffiliated stockholders.

The Special Committee

The Special Committee, with the advice and assistance of its independent legal and financial advisors, evaluated the merger, the terms and conditions of the Merger Agreement and the transactions contemplated thereby. Over the course of approximately 11 months, the Special Committee held numerous meetings (telephonically and in person) related to the merger and the other transactions contemplated thereby and led negotiations with the Purchaser Group. At a meeting held on May 20, 2019, the Special Committee unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than members of the Purchaser Group and any Section 16 Officers). The Special Committee also unanimously recommended that the Board (i) approve, adopt and declare advisable the Merger Agreement and the transaction documents and the transactions contemplated thereby, including the merger, and (ii) recommend that the stockholders of Company approve the adoption of the Merger Agreement.

In evaluating the merger, the Merger Agreement and the other transactions contemplated thereby, the Special Committee consulted with the Special Committee’s independent legal and financial advisors, consulted with the Company’s management and considered a number of factors, including, but not limited to, the following potentially positive factors (which are not intended to be exhaustive and are not listed in any relative order of importance):

The Special Committee also considered a number of factors that are discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the merger and to permit the Special Committee to represent effectively the interests of the unaffiliated stockholders. These procedural safeguards, which are not intended to be exhaustive and are not listed in any relative order of importance are discussed below:

The Special Committee also considered a variety of uncertainties, risks and potentially negative factors in its deliberations concerning the merger, including the factors discussed below, concerning the Merger Agreement and the merger (which are not intended to be exhaustive and are not listed in any relative order of importance):

After considering the foregoing potentially negative and potentially positive factors, the Special Committee concluded that the uncertainties, risks and potentially negative factors relevant to the merger were outweighed by the potential benefits that it expected the holders of unaffiliated shares would achieve as a result of the merger.

The foregoing discussion of information and factors considered by the Special Committee is not intended to be exhaustive and may not include all of the factors considered by the Special Committee. In view of the wide variety of factors considered by the Special Committee, the Special Committee found it impracticable to quantify or otherwise assign relative weights to the foregoing factors in reaching its conclusions. In addition, individual members of the Special Committee may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Special Committee adopted Duff & Phelps’ opinion and analyses, among other factors considered, in reaching its determination as to the fairness of the transactions contemplated by presentingthe Merger Agreement, including the merger. The Special Committee recommended that the Board approve, and the Board approved, the Merger Agreement based upon the totality of the information presented to it. It should be noted that this explanation of the reasoning of the Special Committee and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section entitled “Cautionary Statement Concerning Forward-Looking Statements.”

The Special Committee did not consider the liquidation value of the Company’s assets because the Special Committee considers the Company to be a later-dated proxy. Unless so revoked,viable going concern business that will continue to operate regardless of whether the shares represented by proxiesmerger is consummated, where value is derived from cash flows generated from its continuing operations. In addition, the Special Committee believes that the value of the Company’s assets that might be realized in a liquidation would be significantly less than its going concern value for various reasons, including that liquidation sales generally result in proceeds substantially less than the sales of a going concern and that an ongoing operation has the ability to continue to earn profit, while a liquidated company does not, such that the “going-concern value” will be voted athigher than the meeting.“liquidation value” of a company because the “going concern value” includes the liquidation value of a company’s tangible assets as well as the value of its intangible assets, such as goodwill. Furthermore, the Company has no intention of liquidation and the merger will not result in the liquidation of the Company. The sharesSpecial Committee believes the analyses and additional factors it reviewed provided an indication of the Company going concern value. The Special Committee also considered the historical market prices of the Common Stock. The Special Committee did not seek to determine a pre-merger going concern value for the Common Stock to determine the fairness of the Merger Consideration to the Company’s unaffiliated stockholders. However, to the extent the pre-merger going concern value was reflected in the pre-announcement price of the Common Stock, the Merger Consideration represented a premium to the going concern value of the Company. The Special Committee was not aware of any firm offer made by any unaffiliated person, during the two years prior to the date of Merger Agreement for (i) the merger or consolidation of the Company with another company, or vice versa, (ii) the sale or transfer of all or any substantial part of the Company’s assets, or (iii) a purchase of the Company’s securities that would enable such person to exercise control of the Company. Further, the Special Committee did not consider net book value, which is an accounting concept, as a factor because it believes that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and because net book value does not take into account the prospects of the Company, market conditions, trends in the industry in which the Company operates or the business risks inherent in that industry.

Recommendation of the Board

The Board consists of six directors. On May 20, 2019, based in part on the unanimous recommendation of the Special Committee, as well as on the basis of the other factors described above, the Board unanimously (with Mr. Haim Tsuff recusing himself because of his membership in the Purchaser Group) on behalf of the Company:

The Board (with Mr. Haim Tsuff recusing himself because of his membership in the Purchaser Group) unanimously recommends that you vote “FOR” the adoption of the Merger Agreement.

Our Board believes, based on their considerations of the factors described above, that the Merger Agreement and the transactions contemplated by it, including the merger, are substantively and procedurally fair, to the Company’s unaffiliated stockholders. In adopting the Special Committee’s recommendations and concluding that the Merger Agreement and the transactions contemplated by it, including the merger, are in the best interests of the Company and the unaffiliated stockholders, our Board consulted with outside legal advisors, considered and relied upon the same factors and considerations that the Special Committee relied upon, as described above, and adopted as its own analysis the Special Committee’s analyses and conclusions in their entirety (including Duff & Phelps’ opinion and analyses which were adopted by the proxies solicitedSpecial Committee). The Board is not aware of any firm offer made by any unaffiliated person, during the two years prior to the date of Merger Agreement for (i) the merger or consolidation of the Company with another company, or vice versa, (ii) the sale or transfer of all or any substantial part of the Company’s assets, or (iii) a purchase of the Company’s securities that would enable such person to exercise control of the Company.

Opinion of Duff & Phelps, Financial Advisor to the Special Committee

The Company engaged Duff & Phelps to serve as an independent financial advisor to the Special Committee (solely in its capacity as such) to (i) provide independent financial advisory services to the Special Committee and (ii) render an opinion as to the fairness, from a financial point of view, of the Merger Consideration to be received by the holders of the Company’s Common Stock (other than the Purchaser Parties), other than (i) Common Stock to be cancelled pursuant to Section 3.1(c) of the Merger Agreement, (ii) Common Stock owned by NHL or Parent, and (iii) dissenting shares in the merger (without giving effect to any impact of the merger on any particular stockholder, other than in its capacity as a holder of Common Stock).

On May 20, 2019, Duff & Phelps delivered its oral opinion, subsequently confirmed in writing, on such date (which was subsequently orally communicated to the full Board of Directors of the Company will be voted(excluding Haim Tsuff, who recused himself from the process because of his membership in accordancethe Purchaser Group)) that, as of such date and based upon and subject to the assumptions, qualifications and limiting conditions contained in the opinion and discussed with the directions given therein, but if no direction is given, such shares willSpecial Committee, the Merger Consideration to be voted in accordance with the Board’s recommendations.

All voting rights are vested exclusively inreceived by the holders of Common Stock. Only holders ofStock (other than the Purchaser Parties), other than (i) Common Stock atto be cancelled pursuant to Section 3.1(c) of the closeMerger Agreement, (ii) Common Stock owned by NHL or Parent, and (iii) dissenting shares in the merger was fair, from a financial point of view, to such holders (without giving effect to any impact of the merger on any particular stockholders other than in its capacity as a stockholder).

The full text of Duff & Phelps’ opinion is attached as Annex B to this proxy statement and is incorporated herein by reference. The full text of the opinion sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations in rendering the opinion. We urge you to read Duff & Phelps’ opinion carefully and in its entirety.

Duff & Phelps’ opinion was furnished solely for the use and benefit of the Special Committee in connection with its consideration of the merger. The opinion (i) did not address the merits of the underlying business decision to enter into the merger versus any alternative strategy or merger; (ii) did not address any transaction related to the merger; (iii) was not a recommendation as to how the Special Committee or any stockholder should vote or act with respect

to any matters relating to the merger, or whether to proceed with the merger or any related transaction; and (iv) did not indicate that the Merger Consideration received is the best possibly attainable under any circumstances. The decision as to whether to proceed with the merger or any related transaction may depend on an assessment of factors unrelated to the financial analyses on which the opinion is based. The opinion should not be construed as creating any fiduciary duty on the part of Duff & Phelps to any party. Duff & Phelps did not review or advise the Special Committee with respect to any alternative transaction.

In connection with its opinion, Duff & Phelps made such reviews, analyses and inquiries as it deemed necessary and appropriate under the circumstances. Duff & Phelps also took into account its assessment of general economic, market and financial conditions, as well as its experience in securities and business valuation, in general, and with respect to similar transactions, in particular. Duff & Phelps’ procedures, investigations, and financial analyses with respect to the preparation of the opinion included, but were not limited to, the items summarized below:

1.     Reviewed the following documents:

In its analyses, and rendering its opinion with respect to the merger, Duff & Phelps, with the Company’s and the Special Committee’s consent:

In Duff & Phelps’ analyses and in connection with the preparation of its opinion, Duff & Phelps has made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the merger.

Duff & Phelps delivered its written opinion on May 13, 2016, (the “Record Date”) are entitled20, 2019. The opinion was necessarily based upon the information made available to receive notice of and to vote at the Annual Meeting. AsDuff & Phelps as of the Record Date, there weredate of the opinion and market, economic, financial and other conditions as they existed and could be evaluated as of such date, and Duff & Phelps disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion which may come or be brought to the attention of Duff & Phelps after the date of the opinion, or to update, revise, or reaffirm the opinion after the date of the opinion.

Duff & Phelps did not evaluate the Company’s solvency or conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise). Duff & Phelps was not requested to, and did not, initiate any discussions with, or solicit any indications of interest from, third parties with respect to the sale of all or any part of the Company or any other alternative transactions to the merger.

Duff & Phelps did not express any opinion as to the market price or value of the Common Stock (or anything else) before or after the announcement or the consummation of the merger. Duff & Phelps’ opinion should not be construed as a totalvaluation opinion, credit rating, solvency opinion, an analysis of 2,717,691the Company’s credit worthiness, as tax advice, or as accounting advice. Duff & Phelps has not made, and assumes no responsibility to make, any representation, or render any opinion, as to any legal, tax, or accounting matter.

In rendering its opinion, Duff & Phelps did not express any opinion with respect to the amount or nature or any other aspect of any compensation to any of the Company’s officers, directors, or employees, or any class of such

persons, relative to the Merger Consideration to be received by the holders of shares of Common Stock outstanding. Each holder of Common Stock entitled to vote at(other than the Annual Meeting is entitled to one vote for each share held.

Shareholders representing a majority of the Common Stock issued and outstanding as of the Record Date, present in personPurchaser Parties), or by proxy at the Annual Meeting, will constitute a quorum for the transaction of business at the Annual Meeting or any adjournment(s) thereof. Abstentions and shares held of record by a broker for which the broker has discretionary authority or instructions to vote the shares are counted as shares that are present at the Annual Meeting for purposes of determining a quorum.

Abstentions occur when Shareholders are present at the Annual Meeting but fail to vote or voluntarily withhold their vote for any of the matters upon which the Shareholders are voting. There are also non-discretionary matters for which brokers and other nominees do not have discretionary authority to vote unless they receive timely instructions from you. For Proposal 1 (Election of Directors), to be voted on at the Annual Meeting, you must provide timely instructions on how the broker or other nominee should vote your shares. When a broker or other nominee does not have discretion to vote on a particular matter, you have not given timely instructions on how the broker or other nominee should vote your shares and the broker or other nominee indicates it does not have authority to vote such shares on its proxy, a “broker non-vote” results. Although any broker non-vote will be counted as present at the meeting for purposes of determining a quorum, it would be treated as not entitled to vote with respect to non-discretionary matters.

Assuming a quorum is present at the Annual Meeting, the following is a summary of the vote required to approve each proposal, as well as the effect of broker non-votes and abstentions.

Proposal 1 (Election of Directors):  To be elected, each nominee for election as a director must receive the affirmative vote of a majority of the votes of the Company’s Common Stock, present in person or by proxy at the meeting and entitled to vote on the proposal.  Abstentions may not be specified as to the election of directors, but you may withhold your vote as to any nominee.  Votes that are withheld from a director’s election will be counted toward a quorum, but will not affect the outcome of the vote on the election of a director.  Broker non-votes will be counted toward a quorum, but will not be taken into account in determining the outcome of the election. 

Proposal 2 (Ratify Appointment of Outside Auditors):To ratify the appointment of Malone Bailey, LLP as the company’s independent Public accounting firm for the year ending December 31, 2016. To be ratified, Malone Bailey, LLP must receive the affirmative vote of a majority of the votes of the Company’s Common Stock, present in person or by proxy at the meeting and entitled to vote on the proposal. Broker non-votes will not be taken into account in determining the outcome of the election.

How Can I Vote Without Attending the Annual Meeting?

There are three methods for registered Stockholders to direct their vote by proxy without attending the Annual Meeting:

•   Vote by Internet. You can vote via the Internet. The website address for Internet voting is provided on your Notice or proxy card. You will need to use the control number appearing on your Notice or proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 P.M. Eastern Time on Sunday, June 26, 2016. Internet voting is available 24 hours a day. If you vote via the Internet you do NOT need to vote by telephone or return a proxy card.

•   Vote by Telephone. You can also vote by telephone by calling the toll-free telephone number provided on the Internet link on your Notice or on your proxy card. You will need to use the control number appearing on your Notice or proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone up until 11:59 P.M. Eastern Time on Sunday, June 26, 2016. Telephone voting is available 24 hours a day. If you vote by telephone you do NOT need to vote over the Internet or return a proxy card.

•   Vote by Mail. If you received a printed copy of the proxy card, you can vote by marking, dating and signing it, and returning it in the postage-paid envelope provided. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information, as of the Record Date, concerning the ownership of the Company’s Common Stock by (a) each of the Company’s directors, (b) the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel & Corporate Secretary, and former Legal Counsel and Corporate Secretary (the “Named Executive Officers”), (c) all current directors, executive officers of the Company as a group; and (d) each person who beneficially owns more than five percent of the Company’s Common Stock.

(1) Unless otherwise specified, the address of such person is c/o Isramco, Inc., 2425 West Loop South, Suite 810, Houston, Texas 77027.

(2) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the “SEC”) and generally includes voting or investment power with respect to securities.  In accordance with SEC rules, shares of Common Stock issuable upon the exercise of options or warrants which are currently exercisable or which become exercisable within 60 days of the Record Date are deemed to be beneficially owned by, and outstanding with respect to the holderfairness of any such optioncompensation. In addition, the opinion did not address the fairness to, or warrant.  Except as indicated by footnote, and subject to community property laws where applicable, toany other consideration of, the knowledgeholders of any class of securities, creditors or other constituencies of the Company, each person listed is believed to have sole voting and investment power with respect to all sharesother than the holders of Common Stock owned by such person.

(3) Haim Tsuff, the Company’s Chairman of the Board, Chief Executive Officer and President, holds directly 61,679 shares of the Company.  Also, as described in Notes 4, 5, and 6 below, he may be deemed to control an additional 1,930,321 shares of Common Stock.

 (4) Naphtha Israel Petroleum Corporation Ltd. (“Naphtha PetroleumSummary of Financial Analyses by Duff & Phelps”), an Israeli public company whose shares are listed

Set forth below is a summary of the material analyses performed by Duff & Phelps in connection with providing its opinion to the Special Committee. This summary is qualified in its entirety by reference to the full text of the opinion, attached hereto as Annex B. While this summary describes the analyses and factors that Duff & Phelps deemed material in its May 20, 2019 presentation to the Special Committee, it is not a comprehensive description of all analyses and factors considered by Duff & Phelps. The preparation of a fairness opinion is a complex process that involves various determinations as to appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances. Therefore, neither the opinion nor Duff & Phelps’ underlying analysis is susceptible to partial analyses or summary description. In arriving at its opinion, Duff & Phelps did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Duff & Phelps’ analyses must be considered as a whole and selecting portions of its analyses and of the factors considered by it in rendering the opinion, without considering all analyses and factors, could create a misleading or incomplete view of the evaluation process underlying the opinion. The conclusion reached by Duff & Phelps was based on all analyses and factors taken as a whole, and also on the Tel Aviv Exchange, holds allapplication of Duff & Phelps’ own experience and judgment.

Duff & Phelps’ analyses were prepared using the Isramco Projections provided by management of the outstanding voting shares of Naphtha Holding Ltd. (“Naphtha Holding”), a private Israeli company.  Haim Tsuff, the Company’s Chairman of the Board, Chief Executive Officer and President, may be deemed to beneficially own any shares held by Naphtha Holding within the meaning of Rule 13d-3 of the Exchange Act, by virtue of the control that he exercises over Naphtha Petroleum.  The nature Mr. Tsuff’s control over Naphtha Petroleum is described in the succeeding paragraphs. The address of Naphtha Petroleum and Naphtha Holding is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel.

Mr. Tsuff holds all of the outstanding voting shares of United Kingsway Limited (“United Kingsway”), a Bahamian private company.  He also servesCompany as the sole directorbasis of United Kingsway.  United Kingsway holds 74%its opinion. For more information regarding the use of the outstanding membership interests in each of YHK Investment L.P. (“YHK LPprojections, please see “Special Factors—Projected Financial Information”), an Israeli limited partnership and YHK General Manager Ltd. (“YHK Manager”), a private Israeli company that serves as the general partner of YHP LP.   YHK LP holds 44.5% of the outstanding voting securities of Equital Ltd. (“Equital”), an Israeli public company listed beginning on the Tel Aviv Exchange. The address of United Kingsway is Spaarneweg 14, Cruquius 2142 EN, The Netherlands. The address of YHK LP and YHK Manager is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel. The address of Equital is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel.

Equital holds 37% of the outstanding voting securities of Jerusalem Oil Exploration Ltd. (“J.O.E.L.”), an Israeli public company.

J.O.E.L. holds 65% of the outstanding voting securities Naphtha Petroleum which, as noted above, holds all of the outstanding voting securities of Naphtha Holding and also controls Israel Oil Company Ltd., an Israeli private company (“I.O.C.”). The address of J.O.E.L. is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel.page 47.

The 1,592,841 sharesfinancial analyses summarized below include information presented in tabular format. In order for Duff & Phelps’ financial analyses to be fully understood, the tables must be read together with the text of Common Stock notedeach summary. The tables alone do not constitute a complete description of the financial analyses undertaken by Duff & Phelps. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Duff & Phelps’ financial analyses.

Sum-of-the-Parts Analysis

Based on its professional experience, Duff & Phelps performed a sum-of-the-parts valuation analysis of the Company using various valuation methodologies, as described below.

Tamar Royalties

Isramco, through its fully-owned subsidiary, Tamar Royalties, owns an ORRI from Isramco Negev 2’s 28.75% working interest in the table above are heldTamar Field, equivalent to 1.5375%, which will increase to 2.7375% after payout, in each case subject to wellhead adjustment. An ORRI is an ownership interest in the nameoil and gas leasehold estate equating to a certain percentage of Naphtha Holdingproduction or production revenues, calculated free of the costs of production and 329,676 shares are helddevelopment of the underlying lease(s), but subject to its proportionate share of certain post production costs. An ORRI is a non-possessory interest in the nameoil and gas leasehold estate and, accordingly, Isramco has no control over the operations, drilling, expenses, timing, production, sales, or any other aspect of I.O.C.  None of United Kingsway, YHP LP, YHK Manager, Equitaldevelopment or J.O.E.L. holds, directly, any sharesproduction of the Company’s Common Stock. However, due to the controlling ownership structure described above, each of these entities may be deemed to beneficially own such shares.Tamar Field.

(5)  Haim Tsuff, the Company’s Chairman of the Board, Chief Executive Officer and President, may be deemed to control the 7,804 shares of the Company’s Common Stock held directly by Naphtha Exploration LP., an Israeli limited partnership listedDuff & Phelps performed a discounted cash flow analysis based on the Tel Aviv Exchange, through controlTamar Royalties Projections,specifically excluding selling, general, and administrative (“SG&A”) expenses, using the projected unlevered free cash flows of its general partner, Naphtha Partnerships Management Ltd. The address of Naphtha Exploration LP is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel.

(6)  Haim Tsuff,Tamar Royalties for the Company’s Chairman of the Board, Chief Executive Officer and President, may be deemed to control the 329,676 shares of the Company’s Common Stock held directly by I.O.C.- Israel Oil Company Ltd., an Israeli private companyfiscal years (“I.O.C.”FY”) through control of J.O.E.L. and Naphtha Petroleum, which in turn control I.O.C. The address of I.O.C. is 8 Granit Street, P. O. Box 10188, Petach Tikva, 49002 Israel.  Mr. Tsuff’s control of J.O.E.L. and Naphtha Petroleum is more particularly described in footnote (4) above.

(7)  Mr. Ram resigned from the Board of Directors in 2014.

(8)  Mr. Hasson was appointed to the Board of Directors in 2014.

(9)  Mr. Koltovskoy joined the Company in September 2012 as Director of Finance and was named Chief Accounting Officer in December 2012.

(10) Mr. James joined the Company in May of 2013 and was appointed Corporate Secretary in August of 2013.

(11) Curt L. Warnock resigned in 2013.

Performance Graph

The following graph compares the cumulative return on a $100 investment in our common stock fromending December 31, 2010,2019 through December 31, 2015,2058 to derive the estimated asset value for Tamar Royalties. Duff & Phelps defined “free cash flow” as cash that is available to distribute to all security holders of Tamar Royalties. The discounted cash flow analysis was used to determine the cumulative return on a $100 investment in the Standard & Poor’s 500 (“S&P 500”) index and the Dow Jones U.S. Exploration & Production Total Stock Market indexnet present value of projected unlevered free cash flows utilizing an appropriate cost of capital for the same period. In calculatingdiscount rate, which reflects the cumulative return, reinvestment of dividends, if any, is assumed. This graph is not “soliciting material,” is not deemed filedrelative risk associated with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. This graph is included in accordance with the SEC’s disclosure rules. This historic stock performance is not indicative of future stock performance.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

Among Isramco, Inc., the S&P 500 Index and the Dow Jones U.S. Exploration &

Production Total Stock Market Index

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis is intended to provide you with a detailed description of the Company’s executive compensation philosophy and objectives, the compensation decisions that the Company’s Compensation Committee has made pursuant to those objectives and the factors considered in making those decisions. The Company’s compensation program for senior executives is governed by the Compensation Committee, which determines the compensation of all of the Company’s executive officers.  We note that the Compensation Committee does not tie compensation to any performance metric targets of the Company and, accordingly, sets compensation through a discretionary approach based on factors that are discussed herein below. This discussion and analysis focuses on the Company’s named executive officers – the Company’s (i) Chairman, Chief Executive Officer and President, (ii) Senior Vice President and Chief Financial Officer, (iii) Chief Accounting Officer, (iv) General Counsel

and Secretary, (v) former Legal Counsel and Secretary.

Compensation Philosophy and Objectives

The primary objectives of our market based compensation program for Haim Tsuff, Chairman of the Board, Chief Executive Officer and President; Edy Francis, Chief Financial Officer; Zeev Koltovskoy, Chief Accounting Officer; Anthony James, General Counsel and Secretary; and Curt L. Warnock, the Company’s former Legal Counsel and Corporate Secretary (collectively the  “Named Executive Officers”) were and are to attract and retain qualified and experienced executive talent, provide appropriate incentives for the Named Executive Officers to apply their efforts in such a way that supports our financial performance objectives and business strategy, and to align their incentives with enhancement of shareholder value. In particular, our compensation program for Named Executive Officers is designed to reward superior job performance and individual initiative to help increase the Company’s oil and gas reserves, production rates, earnings per share and to manage operating costs.  Approximately 96% of the shares of Common Stock present at the Company’s 2014 annual meeting of Shareholders voted in favor of the Company’s executive compensation. The Company believes that its compensation philosophy and objectives align with the latest shareholder advisory vote on compensation by incorporating the sentiment of the shareholder advisory vote into decision making regarding the objectives and goals of the Company’s compensation program. This consideration of the shareholder sentiment was utilized in determining discretionaryTamar Royalties Projections cash bonuses and setting salaries for Named Executive Officers.

The Compensation Committee is developing metrics by which executive cash incentives and stock-related incentives will be awarded through the Company’s incentive plans. In that effort, the Compensation Committee seeks to compensate the Company’s Named Executive Officers so that their aggregate cash and equity compensation is adequate to attract and retain skilled and competent executives. However, to date, the Company has not issued any stock-related incentives to its Named Executive Officers and instead relies solely upon cash compensation with respect to its Named Executive Officers.

Role of the Compensation Committee, its Consultants and Management

The Company’s Board has entrusted the Compensation Committee to carry out the Board’s overall responsibility relating to the compensation of our Named Executive Officers. Our Chief Executive Officer also plays an important role in the executive compensation process, in overseeing the performance and dynamics of the executive team and generally keeping the Compensation Committee informed of business objectives and the performance of the Named Executive Officers other than the Chief Executive Officer. All final approvals regarding the Named Executive Officers’ compensation remain with the Compensation Committee. Finally, the Company or the Compensation Committee may retain an independent consulting firm and/or legal counsel experienced in executive and overall compensation practices and policies to assist the Compensation Committee in calibrating the form and amount of executive compensation.  No such consulting firms or legal counsel were engaged by the Compensation Committee in 2015.

The Compensation Committee, together with the assistance and recommendation of our Chief Executive Officer, and other advisors deemed appropriate by the Compensation Committee, typically reviews and discusses each particular executive compensation component presented and approves the compensation of the other Named Executive Officers. In the case of our Chief Executive Officer, the Compensation Committee, together with the full Board and the Lead Independent Director (Max Pridgeon), reviews and discusses each compensation component (together with compensation consultants and any counsel, other advisors or members of management deemed appropriate by the Compensation Committee). Following this review, the Compensation Committee sets the salary and other compensation of our Chief Executive Officer.

Market Analysis

When making compensation decisions, the Compensation Committee considers comparative compensation information of select peer and industry companies as a reference in its review and approval of compensation for the Named Executive Officers. This review is done with respect to both the structure of our executive compensation programflows as well as the targeted amountrates of compensation.  The company has selected the following companies as peers for such review

return that investors could expect to realize on alternative investment opportunities with similar risk profiles to Tamar Royalties.

STONE ENERGY CORP

VANGUARD NATURAL RESOURCES

EXCO RESOURCES INC.

MEMORIAL PRODUCTION PARTNERS LP

TRANSGLOBE ENERGY CORP.

APPROACH RESOURCES

PETROQUEST ENERGY INC

GASTAR EXPLORATION LIMITED (USA)

CALLON PETROLEUM COMPANY

PRIMEENERGY CORPORATION

ABRAXAS PETROLEUM CORP

MID-CON ENERGY PARTNERS LP

SANCHEZ PRODUCTION PARTNERS LLC

FX ENERGYDuff & Phelps calculated Tamar Royalties’ projected unlevered free cash flows for each of its (i) Proved Reserves, (ii) Probable Reserves, and (iii) Possible Reserves by taking their respective projected ORRI revenues before petroleum levy, subtracting the petroleum levy to arrive at the projected ORRI revenues after petroleum levy, and subtracting corporate taxes at the Israeli statutory rate of 23.0%. The resulting unlevered free cash flows were discounted at a weighted average cost of capital (“WACC”) range of 7.25% to 9.25%, including a specific country risk premium attributable to Israel, and utilizing 14 publicly traded companies in the Oil and Gas Exploration and Production industry, consisting of Royalty Interest Public Companies and Israeli Public Companies, that Duff & Phelps deemed relevant to its analysis. The companies which were utilized in the calculation of the WACC for Tamar Royalties were:

Because the comparative compensation information is just one of the several analytic tools that are used in setting executive compensation, the Compensation Committee has discretion in determining the nature and extent of its use of any or all of the comparative companies. When exercising its discretion, the Compensation Committee may consider factors such as the nature of officer’s duties and responsibilities as compared to the corresponding position in the peer companies, the experience and value the officer brings to the role, the officer’s performance results, demonstrated success in meeting key financial and other business objectives and the amount of the officer’s pay relative to the pay of his or her peers within our company.

Elements of Executive Compensation

Setting Executive Compensation in 2015

Base Salary. The base salary of each Named Executive Officer is reviewed annually by the Compensation Committee. For our Named Executive Officers other than the Chairman, Chief Executive Officer and President, our the Chairman, Chief Executive Officer, and President recommends salary increases, which are reviewed and approved by the Compensation Committee.

For 2015, the primary factor in determining the amount of increase in base salary was the Compensation Committee’s subjective assessment of individual performance of each of our Named Executive Officers. The Compensation Committee also reviewed the comparative compensation data discussed above to assess the reasonableness of the base salary amounts in light of the officer’s duties and responsibilities as compared to similarly situated officers. The following table reflects annualized base salary amounts for the Named Executive Officers for 2015, 2014 and 2013:

Royalty Interest Public Companies:

Israeli Public Companies:

Annual Cash Incentive Compensation.  

In connection with its review ofDuff & Phelps’ discounted cash flow analyses indicated the performance offollowing asset values for each of the Named Executive Officers, the Compensation Committee specifically considered each executive’s leadership in the performanceProved, Probable, and Possible Reserves of his dutiesTamar Royalties, on both an unrisked and within the Company as a whole.  While no specific performance goals or metrics were set out for any Named Executive Officer with regard to annual cash incentive compensation, the Compensation Committee also considered the difficulty of each Named Executive Officer’s duties in light of the challenging and competitive nature the Company’s operations and the overall economy. The following is a discussion of the material factors the Compensation Committee considered in assessing each Named Executive Officer’s contribution and achievement in the performance of his or her individual duties:risked basis:

•              Haim Tsuff: In assessing Mr. Tsuff’s performance, the Compensation Committee, together with the Lead Independent Director, considered the leadership and strategic vision that Mr. Tsuff provides for the continued growth of the Company as Chief Executive Officer and President. As a result of his significant ownership position in the Company, the Company believes that Mr. Tsuff’s objectives are closely aligned with those of our stockholders.

•              Edy Francis: In assessing Mr. Francis’ performance, the Compensation Committee considered his role as Chief Financial Officer, including his management of financial restructuring and accounting management that impacted the Company’s business.

•              Zeev Koltovskoy: In assessing Mr. Koltovskoy’ performance, the Compensation Committee considered his role as Chief Accounting Officer, including his familiarity with Sarbanes-Oxley compliance procedures and accounting management that impacted the Company’s business.

•              Anthony James:  In assessing Mr. James’s performance, the Compensation Committee considered his role as in-house counsel, and his roles in Land and Human Resources, including his management of issues that impacted the Company’s business.

Accordingly, the following chart presents information about the awards earned by each of the Named Executive Officers:

For more information on total compensation paid to our Named Executive Officers, see “Executive Compensation and Related Information— 2015 Summary Compensation Table.”

Compensation Policies

Adjustment or Recovery of Awards upon Restatement of Company PerformanceTamar Arbitration. The Company does have a formal policy requiring its Named Executive Officers to return cash and equity incentive awards if the relevant metrics upon which the awards are based are ever restated or otherwise adjusted in a manner that would reduce the size of an award or payment.  The Company also has a provision in its employment contracts with Named Executive Officers allowing the company to force the return of any cash and equity incentive awards if the relevant metrics upon which the awards are based are ever restated or otherwise adjusted in a manner that would reduce the size of an award or payment.

Stock Ownership Guidelines. The Company has no stock ownership guidelines for its Named Executive Officers or for its Directors. 

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management. Based on the Compensation Committee’s review of and discussions with management with respectTamar Arbitration relates to the Compensation Discussion and Analysis, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee.

Frans Sluiter – Chairman

Nir Hasson

Joseph From

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Frans Sluiter, Nir Hasson and Joseph From served on the Compensation Committee in 2015. No member of the Compensation Committee has served as one of our officers or employees at any time.  None of our executive officers served, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on our Board of Directors or Compensation Committee.

The following table sets forth information for the fiscal years ended December 31, 2013, December 31, 2014, and December 31, 2015, and concerning compensation of the Company’s Named Executive Officers:

Summary Compensation Table

(1)          “All Other Compensation” is mainly composed of contributions to the Company’s 401(K) plan and contributions to employee benefit plans, such as medical, dental, vision, short term disability, long term disability, voluntary life, and dependent life. In addition, certain specific allowances (e.g., cellular phones, plane tickets) specifically identified in an Executive’s employment agreement with the Company are also included in this category.

(2)           In the category of “All Other Compensation,” in 2015 Mr. Francis received the following: $18,908 in medical insurance benefits; $20,165 as housing allowance; $3,736 as car allowance; $5,500 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de minimis Company contributions toward dental, vision and life insurance benefits. In 2014 Mr. Francis received the following: $15,864 in medical insurance benefits; $20,165 as housing allowance; $3,736 as car allowance; $7,500 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de minimis Company contributions toward dental, vision and life insurance benefits. In 2013, Mr. Francis received: $15,545 in medical insurance benefits; $20,165 as housing allowance; $3,736 as car allowance; $4,106 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de Company contributions toward dental, vision and life insurance benefits.

(3)          Mr. Koltovskoy joined the Company in 2012 and was named Chief Accounting Officer in December 2012. In the category of “All Other Compensation,” Mr. Koltovskoy received the following in 2015: $6,167 in medical insurance benefits; $14,052 as housing allowance; $7,800 as car and fuel allowance; $4,800 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de minimis Company contributions toward dental, vision and life insurance benefits. 2014: $6,348 in medical insurance benefits. In 2014, Mr. Koltovkoy received the following: $14,052 as housing allowance; $7,800 as car and fuel allowance; $3,979 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de minimis Company contributions toward dental, vision and life insurance benefits. In 2013 Mr. Koltovskoy received the following: $6,407 in medical insurance benefits; $14,052 as housing allowance; $4,800 as car allowance; $3,052 in employer contributions to the Company’s 401(K) plan; $1,200 as cellular phone service allowance; and de minimis Company contributions toward dental, vision and life insurance benefits.

(4)          Mr. James joined the Company in May 2013 and was named Secretary in August of 2013.  In the category of “All Other Compensation,” all benefits reflected for Mr. James are for employer contributions to the Company’s 401(K) plan and de minimis Company contributions life and disability insurance benefits.

(5)          Mr. Warnock joined the Company in November 2011 and resigned in June of 2013. In the category of “All Other Compensation,” all of the benefits reflected for Mr. Warnock are for medical insurance benefits.

EMPLOYMENT/CONSULTING AGREEMENTS

The base salary received by the Company’s Chairman, Chief Executive Officer, and President through May 1, 2014, was governed the Consulting Agreementdisagreement between the Company and Goodrich Global Ltd. (“Goodrich”),Isramco Negev 2 as to which costs should be included in the calculation of the payout of the Tamar Field, after the occurrence of which Isramco Negev 2 is entitled to a company ownedhigher percentage of the ORRI. The disagreement stems from the fact that the agreements governing the creation of the ORRI were formulated in the 1980s and controlled by Mr. Haim Tsuff,do not have a clear and unequivocal definition as to what costs should be included in the Company’s Chairman, Chief Executive Officercalculation of the payout.

Isramco Negev 2 estimates that the total scope of the ORRI, as at December 31, 2018, in disagreement is approximately $73 million, before taxes. Under the terms of the agreements creating the ORRI, the dispute is

subject to arbitration in Israel. The Company believes the claims of Isramco Negev 2 are contrary to generally accepted industry practice and President.  On November 17, 2008,expects that the matter will be resolved favorably through the arbitration process; however, the Company and Goodrich entered into an Amended and Restated Agreement,cannot be assured of a favorable result. Accordingly, Isramco continues to receive royalty payments at the lower rates as subsequently amended on November 24, 2008, and January 1, 2011 (the “Goodrich Agreement”).  The Goodrich Agreement replacedif the consulting agreement entered into in May 1996 between the Company and Goodrich which terminated on May 31, 2008, pursuant to which the Company paid $240,000 per annum in installments of $20,000 per month.  Under the Goodrich Agreement, as of June 1, 2008, the Company paid Goodrich $360,000 per annum in installments of $30,000 per month in addition to reimbursing Goodrich for all reasonable expenses incurred in connection with services rendered to the Company.  The Company’s payment of $360,000 per yearInvestment Repayment Date (as defined under the Goodrich Agreement is herein reflected as the salary of Haim Tsuff, the Company’s Chairman, Chief Executive Officer and President. The Goodrich Agreement had an initial term through May 31, 2011, and automatically extended by its terms for an additional three-year period.  The Goodrich Agreement contained certain customary confidentiality and non-compete provisions.  The Company and Goodrich entered into a Consulting Agreement dated effective June 1, 2014 (the “2014 Consulting Agreement”), which replaced the Goodrich Agreement. However, the 2014 Consulting Agreement will continue pay to Goodrich $360,000 per annum in installments of $30,000 per month, in addition to reimbursing Goodrich for all reasonable business expenses, including automobile expenses, incurred by Mr. Tsuff in connection with services rendered on behalf of the Company, in exchange for management services performed by Mr. Tsuff as the Company’s Chairman, Chief Executive Officer, and President. The 2014 Consulting Agreement has an initial term through May 31, 2017, and will be automatically extended by its terms for an additional three-year period unless the Company or Goodrich elects otherwise prior to such extension.  The Consulting Agreement also contains certain customary confidentiality and non-compete provisions which are identical to those contained in the Goodrich Agreement.  

On September 11, 2014, the Company entered into an employment agreement (the “Employment Agreement”) with its Chief Financial Officer, Edy Francis. The Agreement replaces the former employment agreement between the Company and Mr. Francis that expired on May 31, 2014, and has a term from June 1, 2014 through May 31, 2017. The Employment Agreement provides for the following compensation and benefits: (i) an annual base salary of no less than $110,000, subject to periodic review and adjustment by the Compensation Committee of the Board; (ii) eligibility for an additional bonus and to participate in any profit sharing, option or other similar plan to the extent and on the same basis as may be awarded other officers of the Company; and (iii) reimbursement of certain reasonable business expenses, together with certain allowances. The Company may terminate the term of employment of Mr. Francis under the Employment Agreement for any reason, or for Cause, Permanent Disability (each as defined in the Employment Agreement) or death, upon 120 days prior written notice to Mr. Francis (the “Required Notice Period”). Mr. Francis may terminate his term of employment only for Good Reason (as defined in the Employment Agreement) upon 120 days prior written notice to the Company. The Employment Agreement also includes certain customary representations, warranties and covenants, including non-disclosure covenants.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

Except as described under the agreements listed above, there are no payments or other obligations of the Company to the Named Executive Officers in the event of termination or change-in-control.

DIRECTOR COMPENSATION:

The following table sets forth information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2015:

For 2015, non-employee director annual compensation remained at the levels established in previous years. Compensation for all non-employee directors consists of (i) $1,500.00 per meeting attended by a non-employee director and (ii) $500.00 per special action taken by unanimous written consent by the Board or by a Committee on which the non-employee director is a member.  Isramco does not pay its employee directors for Board service in addition to such employee’s regular compensation.

RELATED PARTY TRANSACTIONS:

On May 18, 2015, Tamar Royalties LLC (“Tamar Royalties”), a newly formed, wholly-owned, special purpose subsidiary of the Company, entered into a term loan credit agreement (the “DB Facility”) with Deutsche Bank Trust Company Americas, (“Deutsche Bank”), as facility agent for the lenders and as collateral agent for the secured parties, and with the lenders party thereto. The DB Facility provides for borrowings inthereto), which is referred to as the payout date, has not occurred. Isramco believes the payout date to be around the middle of 2015, while Isramco Negev 2 believes it to be around early 2019.

Duff & Phelps did not make any assessment with respect to the likelihood of any particular outcome of the arbitration, and assumed a range of total potential proceeds to the Company from the arbitration of $0 to $56.2 million, after taxes, with a midpoint of $28.1 million, based on the estimated total amount of $120,000,000 on a committed basis and is secured by, among other things, an overriding royalty interest in the Tamar Field, a natural gas field in the Mediterranean Sea, equal to 1.5375%, but isORRI subject to increase to 2.7375% upon the Tamar project payout (the “Royalty Interest”). In connection with the DB Facility, and pursuant to a royalties sale and contribution agreement, the Company contributed the Royalty Interest to Tamar Royalties in exchange for alldisagreement of the ownership units of Tamar Royalties. Pursuant to the terms of its governing documents, Tamar Royalties will be managed$73.0 million provided by N.M.A. Energy Resources Ltd., a related party of the Company and an independent manager, Donald J. Puglisi. As consideration for its managementdeducting taxes at the Israeli statutory rate of Tamar Royalties LLC, the Company pays twenty thousand dollars ($20,000) per month to N.M.A. Energy Resources Ltd. As noted herein, Isramco Inc. owns all of the ownership interests in Tamar Royalties LLC, subject to its management by the aforementioned parties. All overriding royalty payments received in Tamar Royalties LLC are paid by Isramco Negev 2, LP, a company affiliated by common ownership.23.0%.

On June 27, 2015U.S. Oil and Gas Exploration and Production Segment

Duff & Phelps performed discounted cash flow analyses for each of Isramco Resources, Isramco Energy, and Jay Petroleum, which collectively comprise Isramco’s U.S. Oil and Gas Exploration and Production Segment, based on the Company used a portion ofIsramco Resources Projections, the proceeds secured from the DB Facility to repay the then-outstanding principal and interest balances of the related party debt discussed below. The final payment totaled $101,022,000 which included loan principal payments totaling $93,395,000 and interest payments totaling $7,267,000. The remaining portion of the payment equal to $360,000 repaid related party payables. As result, all such related party debt was repaidIsramco Energy Projections, and the outstanding balanceJay Petroleum Projections, respectively. The Isramco Resources Projections, Isramco Energy Projections, and Jay Petroleum Projections were based on the Company’s forecasts, as of December 31, 2015 is zero.2018, for future prices of oil, gas, and natural gas liquids (“NGL”), which fluctuate on both a long- and short-term basis. The discounted cash flow analyses were used to determine the net present value of projected unlevered free cash flows utilizing a cost of capital for the discount rate, which reflects the relative risk associated with these respective cash flows as well as the rates of return that investors could expect to realize on alternative investment opportunities with similar risk profiles to each of Isramco Resources, Isramco Energy, and Jay Petroleum.

I.O.C. - IsraelDuff & Phelps calculated unlevered free cash flows for each of Isramco Resources, Isramco Energy, and Jay Petroleum by taking estimated earnings before interest and taxes and subtracting capital expenditures, for (i) the period from FY2019 through FY2037 and (ii) a separate subtotal for “After”, based on the Cawley Reserve Report. Duff & Phelps utilized a tax rate of 0.0% as many of the prospective buyers for assets such as Isramco Resources, Isramco Energy, or Jay Petroleum are other pass-through entities and working capital requirements of 0.0%, as provided by Company management. The resulting cash flows were discounted at a WACC range of 8.25% to 10.25%, utilizing nine publicly traded companies in the Oil Company, Ltd. (“IOC”)and Gas Exploration and Production industry that Duff & Phelps deemed relevant to its analysis, which companies were:

On February 27, 2007,Oil and Gas Exploration and Production Public Companies:

The indicated asset value for Isramco’s U.S. Oil and Gas Exploration and Production Segment, inclusive of each of Isramco obtainedResources, Isramco Energy, and Jay Petroleum, resulting from Duff & Phelps’ discounted cash flow analyses is detailed below:

Production Services

Duff & Phelps performed a loanselected public company analysis for the Company’s Production Services operations. Although none of the selected public companies are directly comparable to the Company’s Production Services segment, Duff & Phelps analyzed the companies set forth below based on their relative similarity to the Company’s Production Services segment, primarily in terms of business model and primary customer end markets.

Oil and Gas Equipment and Services and Oil & Gas Drilling Industries:

The table below summarizes observed historical and projected financial performance of the Company’s Production Services segment and the selected public companies, as well as multiples of enterprise value to LTM EBITDA, estimated FY2019 EBITDA, estimated FY2020 EBITDA, and LTM Revenue for the selected public companies, in each case as of May 10, 2019. The revenue and EBITDA estimates for FY2019 and FY2020 in the principal amounttable below for the selected public companies were derived based on information for the twelve months ending closest to the Company’s FY2019 and FY2020 for which information was available. For purposes of $12,000,000its analysis, Duff & Phelps used certain publicly available historical financial data and equity analyst estimates for the selected public companies, and information provided by the Company for the Company’s Production Services segment. Duff & Phelps determined, in its professional judgment, that certain metrics were not meaningful (which is referred to as NM) with respect to the Company’s Production Services segment.

Duff & Phelps also reviewed the target companies involved in six selected merger and acquisition transactions listed in the below table. The selection of these transactions was based on, among other things, the target company’s industry, the relative size of the transaction compared to the merger, and the availability of public information related to the selected transaction. The selected transactions indicated (i) enterprise value to LTM EBITDA multiples ranging from IOC, repayable at4.1x to 18.8x, with a mean of 9.2x and a median of 8.0x, and (ii) enterprise value to LTM revenue multiples ranging from 1.50x to 5.92x, with a mean of 3.58x and a median of 3.10x.

Duff & Phelps applied multiples of 7.0x to 8.0x and 4.5x to 5.5x to the endestimated EBITDA of five years. Interest accrues at a per annum ratethe Company’s Production Services segment for FY2019 and FY2020 of LIBOR plus 6%. Principal is due$3.7 million and payable in four equal annual installments, commencing$5.8 million, respectively, based on the second anniversaryProduction Services Projections provided by the Company, which implied a value for the Production Services segment of $25.8 million to $29.5 million and $26.3 million to $32.1 million for FY2019 and FY2020, respectively. Duff & Phelps averaged these values to arrive, after rounding, at an estimated value for the Company’s Production Services segment of $26.0 million to $31.0 million.

Tamar and Corporate SG&A Expenses

Isramco’s SG&A expenses, consisting of both (i) Tamar Royalties’ SG&A expenses (which SG&A expenses were specifically excluded from the valuation of Tamar Royalties) and (ii) corporate functions, excluding estimated public company costs, which include part of the loan. Accrued interest is payable in equal annual installments. At any time Isramco can make prepayments without premium or penalty. The loan is not secured.Audit Fees, part of Sarbanes-Oxley Consultants, part of Legal Fees, Directors’ Fees, Directors’ Insurance, Nasdaq Fees, Public Company Accounting Oversight Board, and 10-Q Filing Fees, for FY2018 of approximately $4.0 million were provided to Duff & Phelps by management of the Company.

In July 2009,order to determine the ongoing value attributable to Isramco’s SG&A expenses, Duff & Phelps analyzed the below selected public companies, which are referred to herein as the “selected public companies,” in the Oil and Gas Exploration and Production and Integrated Oil and Gas industries.

Oil and Gas Exploration and Production and Integrated Oil and Gas Companies:

Although none of these selected public companies are directly comparable to the Company, entered intoDuff & Phelps analyzed these companies based on their relative similarity to the Company, primarily in terms of business model and primary customer end markets. Duff & Phelps, using publicly available historical financial data and equity research analyst estimates as compiled by Capital IQ, observed multiples of enterprise value to LTM EBITDA, estimated FY2019E EBITDA, estimated FY2020P EBITDA, and LTM Revenue, respectively, for each of the selected public companies. The table below summarizes such analysis.

Duff & Phelps applied a loanmultiple range of 5.5x to 6.5x to the Company’s FY2018A SG&A expenses of approximately $4.0 million, arriving at an implied value range of $22.0 million to $26.0 million for the Company’s SG&A expenses.

Summary of Sum-of-the-Parts Analysis

The range of indicated total asset values for the Company derived from Duff & Phelps’ sum-of-the-parts analysis was approximately $307,771 thousand to approximately $416,181 thousand, as detailed in the table below:

Based on the range of indicated total asset value, Duff & Phelps estimated the range of aggregate equity value of the Company to be approximately $271,842 thousand to approximately $380,252 thousand by adjusting the range of total asset values as follows:

Summary Conclusion

Based on the foregoing analyses and the number of outstanding shares of Common Stock as of May 20, 2019 of 2,717,648, as provided by the Company’s management, and subject to the assumptions, qualifications, and limiting conditions described in its opinion letter attached hereto as Annex B, the implied value of each share of Common Stock was $100.03 to $139.92, as compared to the Merger Consideration of $121.40. Duff & Phelps noted that the Merger Consideration to be received by the holders of shares of Common Stock (other than the Purchaser Parties, and other than (i) shares of Common Stock to be cancelled pursuant to Section 3.1(c) of the Merger Agreement, (ii) Common Stock owned by NHL or Parent, and (iii) dissenting shares) pursuant to the Merger Agreement was within the range of the per share value indicated by its analyses.

Duff & Phelps’ opinion and financial analyses were only one of the many factors considered by the Special Committee in their evaluation of the merger and should not be viewed as determinative of the views of the Special Committee.

Premiums Paid Analysis

Duff & Phelps provided a premiums paid analysis to the Special Committee as a supplementary analysis for informational purposes, and not as part of Duff & Phelps’ financial analyses that supported its opinion. Duff & Phelps reviewed the premiums paid by acquirers over the public market trading prices in merger and acquisition transactions involving a majority stockholder purchasing the remaining shares that were announced after January 1, 2016 and involved target companies with businesses deemed relevant by Duff & Phelps, based on the closing stock price one-day, one-week, and one-month prior to the announcement of the applicable transaction. The following table summarizes the results of the review:

Duff & Phelps noted that the premiums paid analysis indicated that the Merger Consideration of $121.40 per share to be received by the holders of Common Stock of the Company pursuant to the Merger Agreement implied a 18.9% premium to the Company’s Common Stock closing price of $102.10 per share on March 21, 2018, the trading day prior to the date of the filing of a Schedule 13D with the SEC announcing that the Reporting Persons (as defined in

the Schedule 13D) were in the preliminary stages of evaluating the possibility of pursuing a transaction involving the acquisition of the outstanding shares of Common Stock of Isramco not already owned by the Reporting Persons.

Previous Presentations to the Special Committee

In addition to the May 20, 2019 financial presentation to the Special Committee summarized above, in its capacity as financial advisor and in connection with IOC,assisting the Special Committee in negotiating the best price, Duff & Phelps also made preliminary presentations to the Special Committee on each of November 26, 2018, January 10, 2019, January 27, 2019 (using a related party, pursuantpresentation dated January 25, 2019), January 28, 2019, February 17, 2019 (using a presentation dated February 14, 2019), March 12, 2019, and April 2, 2019. A summary of these preliminary presentations is also provided below. Copies of these preliminary presentations, as well as a copy of the May 20, 2019 presentation, are attached as exhibits to the Schedule 13E-3. The summaries of the presentations made to the Special Committee set forth in this proxy statement are qualified in their entirety by the full text of such materials. None of these presentations, alone or together, constitute or form the basis of an opinion of Duff & Phelps with respect to the adequacy or fairness, from a financial point of view, of the Merger Consideration.

The preliminary financial analyses included in the January 25, 2019, February 14, 2019, March 12, 2019 and April 2, 2019 presentations were based on the proposed terms of the proposed transaction (including the consideration proposed to be paid to holders of Common Stock), the Company’s capitalization, and financial, economic, market, tax and other conditions and circumstances as in effect on, and the information made available to Duff & Phelps as of, the respective dates of such presentations. The preliminary financial analyses contained in the presentations made to the Special Committee on each of January 27, 2019, January 28, 2019, February 17, 2019, March 12, 2019 and April 2, 2019 were based on preliminary iterations of the Isramco Projections, and the financial analyses contained in the May 20, 2019 presentation were based on the Isramco Projections. Accordingly, the results of such preliminary financial analyses differ from the financial analyses contained in the May 20, 2019 financial presentation as a result of, among other things, the Isramco Projections relied upon and interim changes in the proposed terms of the proposed transaction, the Company’s capitalization and financial, economic, market, tax and other conditions, circumstances and information.

The primary preliminary financial analyses presented in the January 25, 2019, February 14, 2019, March 12, 2019 and April 2, 2019 presentations were sum-of-the-parts analyses of the Company, utilizing discounted cash flow analyses for each of Tamar Royalties and the Company’s U.S. Oil and Gas Exploration and Production Segment, which is comprised of Isramco Resources, Isramco Energy, and Jay Petroleum, and a combined selected public companies / M&A transactions analysis for the Company’s Production Services segment, both on a pre-Tamar Arbitration estimated proceeds and post-Tamar Arbitration estimated proceeds basis, substantially similar to the sum-of-the-parts analysis based on the projections contained in the Isramco Projections and contained in the May 20, 2019 presentation summarized above.

The preliminary sum-of-the parts analysis contained in the January 25, 2019 presentation yielded the following ranges of implied equity value and per share value of the Company’s Common Stock: (i) $280,044 thousand to $349,923 thousand and $103.05 to $128.76, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and excluding the potential proceeds from the Tamar Arbitration; and (ii) $334,714 thousand to $404,593 thousand and $123.16 to $148.88, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $71.0 million pre-tax estimated proceeds from the Tamar Arbitration.

The preliminary sum-of-the parts analysis contained in the January 28, 2019 presentation yielded the following ranges of implied equity value and per share value of the Company’s Common Stock: (i) $286,456 thousand to $356,335 thousand and $105.41 to $131.12, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and excluding the potential proceeds from the Tamar Arbitration; and (ii) $341,126 thousand to $411,005 thousand and $125.52 to $151.24, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $71.0 million pre-tax estimated proceeds from the Tamar Arbitration.

The preliminary sum-of-the parts analysis contained in the February 14, 2019 presentation yielded the following ranges of implied equity value and per share value of the Company’s Common Stock: (i) $311,712 thousand to $410,712 thousand and $114.70 to $151.13, respectively, including the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and excluding the estimated potential proceeds from the Tamar Arbitration; (ii) $339,047 thousand to $438,047 thousand and $124.76 to $161.19, respectively, including the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $35.5 million pre-tax estimated proceeds from the Tamar Arbitration, (iii) $366,382 thousand to $465,382 thousand and $134.82 to $171.24, respectively, including the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $71.0 million pre-tax estimated proceeds from the Tamar Arbitration, (iv) $282,712 thousand to $359,712 thousand and $104.03 to $132.36, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and excluding the potential proceeds from the Tamar Arbitration; (v) $310,047 thousand to $387,047 thousand and $114.09 to $142.42, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $35.5.0 million pre-tax estimated proceeds from the Tamar Arbitration, and (vi) $337,382 thousand to $414,382 thousand and $124.14 to $152.48, respectively, excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets and including $71.0 million pre-tax estimated proceeds from the Tamar Arbitration.

The preliminary sum-of-the parts analysis contained in the March 12, 2019 presentation yielded the following ranges of implied equity value and per share value of the Company’s Common Stock, in each case excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets: (i) $302,712 thousand to $370,712 thousand and $111.39 to $136.41, respectively, excluding potential proceeds from the Tamar Arbitration; and (ii) $330,047 thousand to $398,047 thousand and $121.00 to $146.00, respectively, including $35.5 million pre-tax estimated proceeds from the Tamar Arbitration.

The preliminary sum-of-the parts analysis contained in the April 2, 2019 presentation yielded the following ranges of implied equity value and per share value of the Company’s Common Stock, in each case excluding the hypothetical tax benefit of a step-up in basis to a purchaser of the Company’s assets: (i) $308,003 thousand to $366,003 thousand equity value of the Company, excluding potential proceeds from the Tamar Arbitration; and (ii) $335,338 thousand to $393,338 thousand and $123.00 to $145.00, respectively, including $27.3 million pre-tax estimated proceeds from the Tamar Arbitration.

In addition to the preliminary sum-of-the part analyses summarized above, each of the January 25, 2019, February 14, 2019, March 12, 2019, and April 2, 2019 presentations included, for reference only, (i) a preliminary analysis of the historical trading range of the Common Stock, and (ii) a preliminary analysis of the premiums paid in selected merger and acquisition transactions announced since January 1, 2016, involving a majority stockholder acquiring the remaining shares in the applicable company, in each case, as of the date of such presentation.

Miscellaneous

The issuance of Duff & Phelps’ opinion was approved by its fairness review committee.

Duff & Phelps is a premier global valuation and corporate finance advisor that is regularly engaged to provide financial advisory services, including fairness opinions, in connection with mergers and acquisitions, leveraged buyouts, going-private transactions and recapitalization transactions. Since 2005, Duff & Phelps has rendered over 865 fairness opinions in transactions aggregating more than $335 billion and is regularly engaged in the valuation of businesses and securities in the preparation of fairness opinions in connection with mergers, acquisitions and other strategic transactions.

Pursuant to the Special Committee’s engagement letter with Duff & Phelps, in connection with Duff & Phelps’ financial advisory services, the Company agreed to pay, Duff & Phelps, a nonrefundable upfront retainer of $175,000 payable upon its engagement by the Special Committee and a transaction fee, which is contingent upon the merger of approximately $492,000. As compensation for Duff & Phelps’ services in connection with the rendering of its opinion, the Company agreed to pay Duff & Phelps a fee of $250,000, consisting of a nonrefundable retainer of $125,000 payable upon its engagement by the Special Committee and $125,000 payable upon Duff & Phelps informing the Special Committee that it was prepared to render and deliver the opinion. No portion of Duff & Phelps’ professional fee for the opinion was refundable or contingent upon either the conclusion expressed in the opinion or whether or not the merger is successfully consummated. The Company also agreed to pay Duff & Phelps’ reasonable out-of-pocket expenses and to provide customary indemnification. The terms of the fee arrangements with Duff & Phelps, which the Company borrowed $6 million (the “IOC Loan”). Amounts outstandingbelieves are customary in transactions of this nature, were negotiated at arm’s length, and the Special Committee is aware of these fee arrangements.

According to information supplied to the Company by Duff & Phelps, other than its engagement in connection with the merger, during the two years preceding the date of its opinion, Duff & Phelps has not had any material relationship with any party to the merger for which compensation has been received or is intended to be received, nor is any such material relationship or related compensation mutually understood to be contemplated. Duff & Phelps may seek to, in the future, provide financial advisory services to the Company or the Purchaser Parties or entities that are affiliated with any of them, for which it would expect to receive compensation.

Purchaser Group Members’ Purposes and Reasons for the Merger

Under the SEC rules governing “going private” transactions, each Purchaser Group Member is deemed to be engaged in a “going private” transaction and, therefore, is required to express his, her or its reasons for the merger to

the unaffiliated stockholders, as defined in Rule 13e-3 of the Exchange Act. Each Purchaser Group Member is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the IOC Loan bear interest at LIBOR plus 6.0%. The IOC Loan matures in five years, with accrued interest payable annually on each anniversary date of the loan. The IOC Loan may be prepaid at any time without penalty.Exchange Act.

Effective February 1, 2009,For each Purchaser Group Member, the loan from IOC was amended and restated to extend the payment deadlines arising on and after February 2009, by two years.

On March 3, 2011, the Company entered into a Loan Agreement with IOC pursuant to which it borrowed the sum of $11,000,000. The loan bears interest at a rate of 10% per annum and is payable in quarterly payments of interest only until March 3, 2013, when all accrued interest and principal is due and payable. The loan may be prepaid at any time without penalty. The loan is unsecured. During September 2011, Isramco paid $4,544,000 of principal pursuant to this Loan agreement with IOC leaving outstanding principle of $6,456,000.

Subsequently, in October 2011 the agreement with IOC, pertaining to the above mentioned loan in the outstanding principal amount of $6,456,000 was renegotiated. The payoff of principal amount was extended by 6 month to September 9, 2013. Interest accrued per annum was determined on LIBOR+5.5% from initial 10%.

On March 29, 2012, the Company entered into a Loan Agreement with IOC pursuant to which it borrowed $3,500,000. The loan bears interest at a rate of Libor + 5.5% per annum and matures on March 29, 2013, when all accrued interest and principal is due and payable. The loan may be prepaid at any time without penalty or premium. The loan was unsecured.

On April 29, 2012, the Company entered into another Loan Agreement with IOC, pursuant to which it borrowed $10,000,000. The loan bears interest of Libor+5.5% per annum and matures on April 30, 2013, when all accrued interest and principal is due and payable. The loan may be prepaid at any time without penalty or premium. The loan was funded by IOC in three monthly installments starting April 2012. The loan is unsecured. Theprimary purpose of the loan wasmerger is to provide fundsacquire, through Parent and NHL, all shares of Common Stock not owned by them to Isramco for the paymentbenefit from any future earnings and growth of amounts that were due to the Lenders under the Senior Credit Facility that was paid in full June 29, 2012.

On February 13, 2013, the Company enteredafter the merger of Merger Sub with and into another Loan Agreement with IOC, pursuantthe Company, making the Company a privately held subsidiary of Parent and NHL. The Purchaser Group believes that structuring the transaction in such manner is preferable to whichother transaction structures because (i) it borrowed $1,500,000. The loan bears interest of Libor+6% per annumwill enable Parent and matures on February 13, 2018, when all accrued interest and principal is due and payable. The loan may be prepaid at any time without penalty or premium. The loan is unsecured. The purpose of the loan wasNHL to provide funds to back up a Letter of Credit.

On March 1, 2013,directly acquire all of the above-mentioned Loan agreementsoutstanding shares of the Company at the same time, (ii) it will allow the Company to cease to be a publicly registered and notes with IOC exceptreporting company and (iii) it represents an opportunity for the $1,500,000 loan agreement enteredCompany’s stockholders other than the Purchaser Group to immediately realize the value of their investment in the Company. Further, the Purchaser Group believes that structuring the transaction as a merger transaction provides a prompt and orderly transfer of ownership of the Company in a single step, without the necessity of financing separate purchases of the Common Stock in a tender offer and implementing a second-step merger to acquire any Common Stock not tendered into any such tender offer, and without incurring any additional transaction costs associated with such activities.

The Purchaser Group also believes, in light of the risks and uncertainties relating to the Company’s prospects and the market, economic and other risks, that it is in the best interests of the Company to operate as a privately-held entity. As a privately-held entity, the Company will have greater operational and business flexibility to pursue alternatives, and management will be able to concentrate on February 13, 2013, were amended. long-term growth, reducing the focus on the quarter-to-quarter performance often emphasized by the public equity market’s valuation of Company Stock.

In addition, as a privately-held entity, the Company will be relieved of many of the other expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the federal securities laws of the United States, including the Exchange Act and Sarbanes-Oxley Act of 2002.

The Purchaser Group also considered a variety of potentially negative factors to it concerning the Merger Agreement and the merger, which are listed below, although not listed in any relative order of importance:

The foregoing discussion of the information and factors considered by the Purchaser Group is not intended to be exhaustive, but includes the material factors considered by the Purchaser Group. In view of the variety of factors considered in connection with their evaluation of the merger, the Purchaser Group did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching their determination. The Purchaser Group did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support their ultimate determination. The Purchaser Group based its determination on the totality of the information presented.

Position of the Purchaser Group as to Fairness of the Merger

Under SEC rules governing going private transactions, each of the Purchaser Group Member is required to express his, her or its belief as to the fairness of the merger to the unaffiliated stockholders. Each of the Purchaser Group Members is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

The Purchaser Group has interests in the merger that are different from those of the other stockholders of the Company by virtue of its continuing interests in the surviving corporation after the completion of the merger. The Purchaser Group attempted to negotiate with the Special Committee the terms of all these loansa transaction that would be most favorable to the Purchaser Group, and notes betweennot necessarily to the Company’s unaffiliated stockholders, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such unaffiliated stockholders. The Special Committee consists of three directors of the Company who are not affiliated with the Purchaser Group Members, are not employees of the Company or any of its affiliates and IOC were amended extendinghave no financial interest in the maturitymerger different from, or in addition to December 31, 2018. In addition the payment schedule was changedinterests of the Company’s unaffiliated stockholders other than their interests described under “Special Factors—Interests of Isramco’s Directors and Executive Officers in the Merger” beginning on page 54. Accordingly, the Purchaser Group believes that the members of the Special Committee are independent and disinterested directors of the Company.

The Purchaser Group did not participate in the deliberations of the Special Committee regarding, or receive any advice from the Special Committee’s independent legal or financial advisors as to, the substantive or procedural fairness of the merger to the Company’s unaffiliated stockholders. The Purchaser Group has not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the merger to the Company’s unaffiliated stockholders. No financial advisor provided the Purchaser Group with any analysis, opinion or appraisal with respect to the fairness of the Merger Consideration to the unaffiliated stockholders.

Based on its knowledge and analysis of available information regarding the Company, as well as the factors considered by, and the analyses and resulting conclusions of, the Special Committee and the Board discussed under “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 23, each Purchaser Group Member believes that the merger is substantively and procedurally fair to the unaffiliated stockholders based on its consideration of the following factors, which are not listed in any relative order of importance: