The article claims that the company will produce between 800 and 1,000 barrels of oil every day from this week, and each barrel is worth $150.
An enthusiastic article about Givot Olam Oil Exploration LP (TASE:GIVO.L) on Chabad website Blessings Materialize: Oil Production in Israel, sent the partnership's share price up 6.3% by early afternoon today to NIS 0.068, giving a market cap of NIS 676 million.
The article states, "The Givot Olam company, owned by Lubavitcher R' Tuvia Luskin, will begin to produce and sell oil next week. According to investors, starting next week, the company will produce between 800 and 1,000 barrels of oil every day. Each barrel is worth $150."
In notices to the TASE, Givot has stated that oil production during production tests at its Meged 5 well totaled a few hundred barrels a day at most. It never claimed a figure of 1,000 barrels of oil a day. The price per barrel mentioned by Chabad is also exaggerated. The current price per barrel on international markets is around $100, and to date, Givot has sold oil from the production tests to Oil Refineries Ltd. (TASE:ORL) at $50-60 per barrel.
Chabad notes that Givot founder Tovia Luskin began drilling in Israel after he received explicit blessings from the Rebbe. Luskin attributes the success of his company up until now to the Rebbe's foresight and spiritual guidance.
The English versions of the article says, "This will be the first time that a company has succeeded in producing oil in Israel, in such quantities. The company says it hopes to produce such quantities of oil, which will turn Givot Olam into a multi-billion dollar company. Earlier this year, Givot Olam succeeded in selling thousands of barrels from an experimental run."
The Hebrew version is more explicit: "It is expected that the current well, named Meged 5, and the additional wells that will be drilled soon will generate billions of dollars for Meged 5. It should be noted that, since the beginning of the year, the production tests at Meged have produced 16,000 barrels of oil which was sold for over NIS 4.5 million. The barrels were bought by oil refineries in Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
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