The Tel Aviv Stock Exchange (TASE) suspended trading in participation units of Givot Olam Oil Exploration LP (TASE:GIVO.L) just ten hours after the partnership released a midnight update about its Megad 5 well. The TASE demanded clarifications on the announcement, and stated that it will permit trading in the participation units only after the clarifications are published.
The price of Givot's participation units soared 34% to NIS 0.13 in premarket trading today.
Givot said that, based on the engineering report on the Meged 5 well near Rosh Ha'Ayin, it plans to adopt the report's recommendations. Givot says that it will publish the full report in mid-September. The partnership said that samples of oil taken from the bore-well were found to be high quality and with a low sulfur content. The various tests on the samples also found less than 10% water.
Givot said that its calculations, on the basis of the findings, show that the quantity of oil in the Meged structure for all the eight sections of the well was 19 million barrels of oil. The breakdown is as follows: nine million barrels of oil in sections 7 and 8 together; 4.6 million barrels of oil in section 6; 3.9 million barrels of oil in sections 2-5; and 1.5 million barrels of oil in section 1.
Givot cautions that production tests on sections 7 and 8 (which account for 47% of the total figure above) have not yet been conducted, so it is premature to determine whether the sections contain oil or free gas. The calculation assumed that these two sections contain oil.
Givot said that, extrapolating from the geological considerations to the 175-square kilometer Meged structure, there are 1.525 billion barrels of oil in place in the reservoir. "This estimated quantity should be considered, at this stage, as the maximum quantity as the general partner believes that the chances are low that the quality of the reservoir in these areas will be better than the quality in the area of the Meged 5 well."
Givot's share price closed yesterday at NIS 0.097, giving a market cap of NIS 770 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2010
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