Israel Opportunity: Signs of gas at Ishai well

The Ishai licensees will nevertheless not carry out production tests.

Israel Opportunity Energy Resources LP (TASE: ISOP.L) yesterday notified the TASE that substantial signs of gas were discovered at the Aphrodite 2 well in the Ishai license, located 160 kilometers west of Haifa. The company added, however, that the licensees would not carry out production tests.

Israel Opportunity said that the well reached a depth of 5,652 meters below sea level (including a water depth of 1,707 meters), and that the well operator carried out electrical logs and measurements while drilling, including tests of the composition of the natural gas, rocks, and liquids in the well.

"We are pleased that signs of natural gas were found in the well, but it is necessary to wait for the external assessor's report, which will be ready in two months, to confirm the size of the discovery," said Israel Opportunity CEO Eyal Shuker in response.

Shuker added, "A gas discovery at the Ishai license, which borders the Cypriot Aphrodite structure, is important for us, and when we receive the external assessor's report about the well, we intend to review the remaining stages. The ultimate goal is to bring Israeli gas to Israel and the Israeli people for domestic use and exports."

Israel Opportunity owns 10% of the five Pelagic licenses, Benny Steinmetz's Nammax Oil and Gas Ltd. owns 42.5%, two companies owned by Teddy Sagi, Frendum Investments Ltd. and Daden Investment Ltd. own 33.5%, and 9%, respectively, and well operator AGR Petroleum Services Holdings AS of Norway owns 5%.

In June, Ryder Scott Company LP estimated the potential gas reserves at Ishai at 3.7 trillion cubic feet (TCF), which would make it Israel's third largest gas discovery after Leviathan and Tamar. The Aphrodite reservoir in Cyprus's Block 12 has an estimated 7 TCF of gas.

However, preliminary estimates by industry sources are that the final tests will show that the quantity of gas at Ishai is less than previously estimated. Other industry sources said that if the gas estimates were reduced, it would probably not be worthwhile to develop the reservoir, which is at a depth of 6,000 meters.

Published by Globes [online], Israel business news - www.globes-online.com - on January 3, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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