Leviathan partners find gas at Dolphin 1

In preliminary results, Noble Energy, Delek and Ratio found 15.7 BCM of natural gas in the license west of Haifa.

Dolphin 1 partners Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG) and Ratio Oil Exploration (1992) LP (TASE:RATI.L) have found clear signs of natural gas at the Dolphin 1 exploratory well in the Hanna license. The preliminary results found 550 billion cubic feet (15.7 billion cubic meters) of natural gas - about half the size of Yam Tethy's Mari B well, which has been in operation since 2004.

The Dolphin 1 discovery is Noble Energy and Delek's sixth straight natural gas discovery in Israeli waters: Noa in 1999, Mari B in 2000, Tamar and Dalit in 2008, and Leviathan in 2010.

The Dolphin 1 well is the most promising of the three geologic structures in the Hanna license. The gas bearing strata are located in a structure known as the Tamar sands at a depth of 4,440 meters in waters 1,560 meters deep. The prospect is located 110 kilometers west of Haifa.

Noble Energy owns 39.66% of Hanna, Delek Group units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio owns 15% - the same proportions as at Leviathan.

A decision by the Hanna partners whether the find is commercial depends on several still unknown factors, including the results of production tests and the cost of development. The cost of the well, excluding production tests, is about $51 million.

The Dolphin 1 well was drilling in two stages. The first stage, drilled by the Sedco Express rig, was carried out in September. The drilling of the second stage by the Pride Ensco 5006 rig (formerly Pride North America rig) began in October, and is scheduled to be completed in December. The success came after the rig had several breakdowns at the Leviathan 3 well, and was replaced.

Delek Group's share price rose 2.4% in morning trading to NIS 720.5-, giving a market cap of NIS 8 billion, Avner's share price rose 2.8% to NIS 2.10, giving a market cap of NIS 2.6 billion, Delek Drilling's share price rose 4.7% to NIS 12.06, giving a market cap of NIS 6.3 billion, and Ratio's share price rose 2.5% to NIS -/367, giving a market cap of NIS 2.7 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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