Leviathan drilling begins

Drilling of the exploratory well got underway today and is due to take five months at a cost of $150 million.

Drilling of the Leviathan 1 exploratory well began today, at a cost of $150 million. The Israeli partners in the Leviathan licenses - Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L), as well as Ratio Oil Exploration (1992) LP (TASE:RATI.L) - announced that Noble Energy Inc. (NYSE: NBL) had informed them that the Sedco Express platform had begun drilling. The drilling is due to take five months.

The deep water well in the Rachel license, 135 kilometers west of Haifa, will be drilled to a depth of 7,200 meters, including 1,634 meters of water. The well will seek to locate the gas bearing structure, which the 3D seismic study conducted for Noble Energy indicated the presence of 453 billion cubic meters of natural gas with a geologic chance of success of 50%.

When the well reaches the target structure in about two months, the partners will decide whether to carry out production tests. After these are completed, the Sedco Express will carry out development drilling at the Tamar site, also owned by Noble Energy and Delek Group, together with Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) and Dor Gas Exploration Ltd.

Noble Energy owns 39.66% of the Leviathan licenses, Delek Drilling and Avner Oil each own 22.67%, and Ratio owns 15%.

A second platform, North America Pride, is due to arrive at Leviathan in January 2011 to drill to the deeper structures, where current information estimates the presence of three billion barrels of oil at a depth of 5,800 meters, with a geologic probability of 17%, and the presence of 1.2 billion barrels of oil at a depth of 7,200 meters, with a geologic chance of success of 8%.

Avner Oil's share price rose 1.8% to NIS 2.71, Delek Drilling's share price rose 1.9% to NIS 16.40, and Ratio's share price rose 4.6% to NIS 0.456, on the day's second largest turnover of NIS 105 million.

Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2010

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

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