After its share price rose sharply yesterday, gas and oil exploration partnership Modiin Energy LP (TASE:MDIN.L) announced this morning that it has signed a non-binding letter of intent with a US company to purchase onshore oil rights in California. Modiin will purchase the rights and the parties will work together to find gas and oil on the land of the California prospect.
Modiin said that the prospect is on land in a region in which there have been significant oil discoveries and the seller of the stake has major experience in the region and has been involved in many drillings in the region and will continue as a partner in the holding and as its operator.
Modiin added, "The cost of the land drilling is relatively low and the region already has an infrastructure of pipelines to refineries. Range and production in the event of a discovery are relatively short. Drilling has been previously performed in the area of the project and there were traces of hydrocarbons. The drill was halted before production tests were performed due to technical failures."
Modiin co-CEO Ron Maor said, "The fall in oil prices has led to opportunities for acquiring attractive assets in oil and gas in the US. The fact that we are talking about drilling on land close to a pipeline infrastructure to refineries and teaming up with an experienced operator that knows the area well gives the deal interesting potential for us. It is our intention to continue operating in oil and gas outside of Israel and we hope that this current agreement will bear fruit."
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2016
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