A group of businessmen headed by Moshe Hirschberg acquired 32.5% of the onshore Heletz-Kokhav license from Avenue Group Inc. (Pink Sheets: AVNU) subsidiary Avenue Energy Israel Ltd. for $5 million. The price tag reflects a value of $15 million for the longstanding license, where Israel's first large oil discovery was made.
Avenue Group has owned 75% of Heletz-Kokhav license since August 2007 and Lapidoth Heletz LP. (TASE: LPHL), controlled by Yaakov Luxembourg, has owned 25%. Hirschberg and Luxembourg are partners with Teddy Sagi in the offshore Benjamin license.
Sources inform ''Globes'' that Heletz-Kokhav partners plan to shortly begin drilling new wells, based on an engineering and geological study which found a 50% chance of production of 4.5 barrels of oil, currently worth a gross $350 million.
The estimate is higher than previous estimates of the Heletz-Kokhav license, located between Ashkelon and Sderot, which has been steadily producing oil since 1955. The well has produced over 17 million barrels of oil to date, however production has fallen from 400 barrels a day in its heyday to a few dozen barrels a day today.
The new study prepared for Avenue Energy found that new production methods and technologies could greatly boost production from the oil field.
Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2010
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