Leviathan 3 well operator Noble Energy Inc. (NYSE: NBL) has notified its Israeli partners that drilling of the well was halted at a depth of 2,600 meters (2,700 above the target strata), due to persistent technical problems in the Pride North America rig's blowout preventer (BOP) and peripheral equipment.
Noble Energy and the drilling contractor are trying to fix the breakdowns in order to resume drilling as soon as possible. They say that they cannot yet estimate the effect of the breakdown on the well's original budget or timetable, or if the costs will be material, assuming there are any.
The Israeli companies said that, after they obtain additional information about the drilling operation and an updated assessment about the budget and timetable from Noble Energy, they will announce it, as required.
The Israeli companies said that the technical breakdowns had no effect on the geological results of the well or on the natural gas reservoir at Leviathan.
The Leviathan 3 well is located 4.4 kilometers from the abandoned Leviathan 2 well, and 9.6 kilometers from the Leviathan 1 exploratory well. The Leviathan 3 well is due to reach a depth of 5,300 meters, and take three months. The well's estimated budget is $70 million, and the estimated budget for production tests, which will take 2-3 weeks, if the companies decide to carry them out, is $34 million.
In April, Noble Energy announced the breakdown at the Leviathan 2 well, and it announced a breakdown at the Leviathan 3 well in July.
Noble Energy owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.
Delek Group's share price fell 2.3% in morning trading to NIS 595.80, giving a market cap of NIS 6.9 billion, Avner's share price fell 2.7% to NIS 1.79, giving a market cap of NIS 6.1 billion, Delek Drilling's share price fell 1.8% to NIS 10.20, giving a market cap of NIS 5.6 billion, and Ratio's share price fell 4.7% to NIS 0.343, giving a market cap of NIS 2.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 5, 2011
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