Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) today notified the TASE that they have begun gas flow tests from the Pinnacles 1 well to the Mari B well. The Pinnacles field is a satellite field of Yam Tethys, which Delek jointly owns with Noble Energy Inc. (NYSE: NBL).
The decision to conduct the flow tests was taken yesterday on the basis of information from the well operator, Noble Energy. The tests will examine the composition of the natural gas in the well and the methods for handling the gas. Afterwards, the companies will draw up plans for further operations. The flow tests will begin in a few days, and will cost $5 million.
Delek owns 52.9% of the Pinnacles license through Avner and Delek Drilling, and Noble Energy owns 47.1%, the same stakes as in Yam Tethys
Gas production at Yam Tethy's Mari B was been falling and its partners are developing the Noa and Pinnacles satellite fields to make up for Israel's natural gas shortage caused by the halt in gas deliveries from Egypt. Minister of Energy and Water Uzi Landau ordered Delek and Noble Energy to develop the satellite fields.
In 2011, Yam Tethys increased production of the Mari B well by 50%, but the over-pumping depleted the reservoir more quickly than planned. According to a presentation to the government, Yam Tethys expects to produce 2.4 billion cubic meters (BCM) of gas in 2012, down from 4.3 BCM produced in 2011.
The drop in gas flow from Mari B is due to the falling gas pressure in the reservoir, rather than the depletion of its reserves. Production at the reservoir, 30 kilometers offshore from Ashkelon, is being boosted with compressors. Energy sources believe that Mari B's lower production could send electricity rates higher later this year, at least until the Tamar production well comes on line in 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2012
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