Drilling for oil begins at Dead Sea site

The Tamrur 4 well, owned by Zerah and Delek Group, will cost $4.5 million.

Three years after Zerah Oil And Gas Explorations LP (TASE: ZRAH) raised capital to drill for oil at the Tzuk Tamrur 4 site at the Dead Sea, drilling began at the site yesterday. Zerah, controlled byFore Group subsidiary Ginko Oil Exploration Ltd., owns 50% of the well, and Delek Group Ltd. (TASE: DLEKG) units Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) each own 25%.

The well is planned to reach a depth of 2,000 meters, and take two months at a cost of $4.5 million.

The Tzuk Tamrur 4 well follows the Tamrur 1, 2, and 3 wells drilled by Naphtha Israel Petroleum Corp. (TASE: NFTA) before it was privatized. The Tamrur 3 well, three kilometers south of the Tamrur 4 well, was considered a success. It produced 120,000 barrels of oil during its activity in the mid-1990s. The oil was sold to Oil Refineries Ltd. (TASE:ORL), a government company at the time, at $18-22 per barrel. Continued production was not worthwhile at that price.

The location of the Tamrur 4 well was picked on the basis of seismic tests found a closed structure where large quantities of oil might be found.

Investors were not overly impressed by the news, and Zerah's share fell 1.1% yesterday. The share has risen over 1,000% since the beginning of the year.

Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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