The share price of Globe Exploration LP (TASE: GLEX.L) collapsed after the company announced that its Ofek 2 well near Ramle was a dry hole. The share price was down 39.2% by mid-afternoon, to NIS 0.03, giving a market cap of NIS 9 million.
Globe Exploration said that production tests in the borehole in Permian strata found no substantial flow of hydrocarbons. It added, however, "On the basis of findings to date from the production tests and in view of the signs of substantial hydrocarbons in Permian strata found by the drilling and electrical log, the partnership's consultants advise continuing the production tests using selective acid techniques for the relevant area in order to improve the flow (fracture stimulation) of hydrocarbons to significant quantities."
Globe Exploration plans to carry out the expanded production tests, but will need $5 million to finance them. "The company has not yet drawn up a detailed plan, timetable, or budget for the additional production tests," it said.
Globe Exploration lacks the money for the tests, and will have to raise capital. The tests to date cost an estimated $2.5 million. It began drilling the Ofek 2 well in early June, after its Ofek 1 well failed to find oil, losing the company $6.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 4, 2013
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