Givot Olam Oil Exploration LP (TASE:GIVO.L) today announced, "After successful fracing (hydraulic fracturing), the general partner plans to conduct at least seven days of production tests in zone 8 (of the Meged 5 well). Afterwards, the general partner, with the assistance of its consultants, will decide on further actions for cleaning and production in zones 6 and 7."
Givot will conduct fracing in zone 8 of the borehole this week.
Regarding the short-term importance of the fracing and other operations, Givot said, "If the time and cost needed to try and clean and produce from zones 6 and 7 are reasonable, we will try to complete this, and only afterwards continue the long-term production tests in all the zones." However, it cautioned, "If this activity in zones 6 and 7 is unsuccessful, we can begin long-term production tests in the other zones. We believe that even without zones 6 and 7, the quantity of oil in Meged 5 is commercial."
As for the medium term, Givot said, "The general partner believes that the partnership can conduct long-term production tests at Meged 5 in the coming months. The November 2011 date for the start of systematic and regular production is unchanged. At this time there is no reason to change the plan to begin drilling the Meged 6 and Meged 7 wells in February and August 2012, respectively."
As for the long term, Givot said, "The reserves report published by the partnership, as well as the economic analysis are unchanged as far as we are concerned. There is certainly no reason to change the assessments regarding the Meged 6 and Meged 7 wells, or with regard to the entire core area of the field (where 13 more wells are due to be drilled). Obviously, when we can accurately estimate the quantity of oil that can be produced daily from Meged 5, we will be able to make the necessary adjustments."
Givot's share price rose 3.6% in morning trading today to NIS 0.058, giving a market cap of NIS 592 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 30, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011