Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) today announced that "substantial signs of petroleum (natural gas) have been found at the Shimshon 1 exploratory well."
Last week, "Globes" reported that drilling at the Shimshon well had reached the target strata and that initial tests had found signs of natural gas.
Today, Isramco said that the well reached the target strata at 3,302 meters in 1,103 meters of water. The target strata have a net thickness of 19 meters. All the well's partners have decided to go ahead with production tests, which are due to begin in a few days, and will take 35 days. The production tests will include gas flow at different rates from the target strata and measuring the well pressure and composition of the natural gas.
The estimated cost of the production tests and preparation work of the well for future production, assuming there is a gas discovery, is $33.7 million, of which Isramco's share is $13 million.
Drilling of the Shimshon 1 well began in April. The Shimshon prospect has an estimated 2.3 trillion cubic feet of natural gas with a probability of success of 20%. The size of the reservoir is less than a quarter of the Tamar discovery. If Shimshon is found to be commercial, it will be Israel's first large natural gas offshore discovery in which Noble Energy Inc. (NYSE: NBL) and Delek Group Ltd. (TASE: DLEKG) are not partners. Isramco and its affiliates own 60% of Shimshon and well operator ATP Oil & Gas Corporation (Nasdaq: ATPG) owns 40%. Isramco has contracted to sell 10% of Shimshon to Modiin Energy LP (TASE:MDIN.L).
Isramco's share price rose 3% in early trading today to NIS 0.483, giving a market cap of NIS 5.9 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2012
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