IPC: Myra and Sarah gas fields worth $10b

The valuations are extrapolated from the average valuation of $6.5 billion given to the nearby Tamar field.

Israel Petroleum Company (IPC) has announced that the value of its 13.6% stakes in the Myra (Mira) and Sarah offshore licenses is $2 billion. The valuation was made in a call to investors to become partners in the company's rights to the licenses.

IPC is owned by Canada's Bontan Inc. (Bulletin Board: BNTNF). IPC owns the stakes in the two licenses through IPC Oil and Gas LP. Its partners in the Myra and Sarah licenses are Tzahi Sultan's Modiin Energy LP (TASE:MDIN.L) (19.3%), Emanuelle Energy Ltd. (43.3%), owned by Ofer Nimrodi's Israel Land Energy Ltd., and four other companies, including the operator, GeoGlobal Resources (India) Inc.

Calgary-based consultancy firm Chapman Petroleum Ltd. made the valuations for Bontan, based on a net present value of $677 million for Sarah and $1.43 billion for Myra. These valuations give a valuation of over $10 billion for the two licenses altogether.

The fantastical valuations are extrapolated from the average valuation of $6.5 billion given to the Tamar field, nearby to Myra and Sarah, by Israeli analysts. Tamar is estimated to have 7.7 trillion cubic feet of natural gas.

In February, Chapman Petroleum estimated that Myra could have 3.03-5.45 trillion cubic feet of gas, and estimated Sarah's potential at 1.05-1.89 trillion cubic feet. However, in contrast to the estimate for Tamar, the estimates for Myra and Sarah are only very preliminary, and there is a long way to go to an actual discovery.

IPC also cites a US Geological Survey report from April as saying, "estimated a mean of 1.7 billion barrels of recoverable oil and a mean of 122 trillion cubic feet of recoverable gas in the Levant Basin Province."

IPC also disclosed the work plan for Myra and Sarah, as per the terms of the licenses. The 3D seismic survey for the Sara and Myra licenses has been completed and results are due this week. Determination of a drilling prospect on each license and engineering for those prospects is due by December 31, a contract with the drilling operator will be signed by March 31, 2011, and the drilling should begin by the third quarter of 2011.

Bontan owns 77% of IPC, and Three Crowns International Inc., controlled by Howard Cooper, owns the rest.

Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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