Modiin Energy LP (TASE:MDIN.L), controlled by Tzahi Sultan and Nochi Dankner, has signed a letter of intent with its Canadian partners in the Gabriella offshore license, Adira Energy Corporation (TSXV: ADL; Bulletin Board: ADENF; XETRA: AORLB8) and Brownstone Energy Inc. (TSX: BWN; Bulletin Board: BWSOF) that it will negotiate, on behalf of all the partners, with a well operator and sign a contract to drill a well in the license.
Modiin Energy owns 70% of the Gabriella and Yitzhak licenses, Adira Energy owns 15%, and Brownstone subsidiary Brownbarb (Israel) Inc. owns 15%.
Adira Energy and Brownstone promised to pay Modiin Energy in cash or by letter of credit, whichever the partners decide on, for their proportionate costs of the well. Adira also granted Modiin Energy an option to acquire its stake in the Yitzkak license through the end of 2012, or within 30 days after Adira notifies Modiin that an agreement has been signed to drill in the Yitzhak license, provided that Modiin has signed a drilling contract.
The 390-square kilometer Gabriella license is located 24 kilometers northwest of Tel Aviv in shallow water ranging from 100 meters to 450 meters deep.
In separate announcements, Adira Energy and Brownstone announced that the Ministry of Energy and Water Resources extended the companies' Gabriella and Yitzhak licenses by one year.
Modiin Energy's share price rose 1.4% in morning trading to NIS 0.35, giving a market cap of NIS 812 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2012
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