"We have excellent licenses, both Myra and Sarah, and we strongly believe in them and in the potential of the oil and gas-bearing strata. That is why we've invested, and we will invest a lot more money, to offer these prospects. We received an excellent report from NSAI, an independent consultant," Israel Land Development Company Energy Ltd. (TASE: IE) CEO Ohad Marani said at a press conference today to clear the air about the Myra 1 well.
Marani said, "Breakdowns happen at wells. It's part of this business and of the drilling world. Obviously, the market doesn’t like it, and we don't either, but it's part of this of this business, and you have to be prepared for it. Our breakdown was known to everyone, and there is nothing that can't be fixed. I must state that there were breakdowns at all the recent well in the Mediterranean Basin, and they did not prevent discoveries. We're talking about a breakdown that is known, and resulted in the sidetrack well. We're not drilling the difficult point."
"Our problem is due to the structure we encountered, and not because of the rig equipment. At a depth of 4,600 meters, we encountered a kind of cave or cavern, with the result that there was no resistance to the drill bit. There were several options, and we chose the best option in the operator's opinion. We believe in the well, and we decided on the diagonal side-tracking to the east. We want to reach the target strata in the reservoir's eastern slopes."
IPC CEO Muli Ravina said, "The problems we encountered are neither mechanical nor geological, and they do not change the geology of the licenses or the quality of the target. There is replacement and supplementary equipment for quickly dealing with these kinds of situations."
In a notice to the TASE today, the partners ILDC Energy, Modiin Energy LP (TASE:MDIN.L), IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC), and well operator GeoGlobal Resources Inc. (AMEX: GGR) said that GGR will continue the sidetracking, a proven drilling method, to reach the target strata. GGR currently believes that the target sands are at (vertical) depth of 5,000 meters, and that the well is planned to reach a depth of 4,800-5,200 meters. GGR will examine the effect of these facts on the drilling to the target strata and how to reach them.
Share prices of the Myra licensees are correcting upwards in morning trading today, after plummeted after they announced a breakdown at the Myra 1 well, and following reports that it might be a dry hole. ILDC Energy's share price rose 12.5% by midday today to NIS 0.45, giving a market cap of NIS 440 million, Modiin Energy's share price rose 5.4% to NIS 0.235, giving a market cap of NIS 540 million, and IPC's share price rose 7.9% to NIS 0.205, giving a market cap of NIS 40 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2012
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