US study finds huge gas potential in Israel

Energy stocks in Tel Aviv are sharply higher after the US Geological Survey report.

Participation units in oil and gas exploration partnerships traded on the Tel Aviv Stock Exchange has risen sharply today. Isramco (Nasdaq: ISRL; TASE: ISRA.L), Delek Drilling Limited Partnership (TASE: DEDR.L), Yahash, Avner Oil and Gas (TASE: AVNR.L), Ratio Oil Exploration Ltd. (TASE:RATI.L), and Modiin Energy Ltd. (TASE:MDIN.L) are all up substantially.

The reason for the rises, apart from the positive general market trend, apparently lies in a US government report published on Thursday after trading in Tel Aviv had closed. According to the report, in a region of which Israel and its economic zone form a considerable proportion, there is potential for finding huge quantities of natural gas, amounting to about seventeen times the reserves discovered in the Tamar field 90 kilometers west of Haifa.

"An estimated 122 trillion cubic feet (tcf) (mean estimate) of undiscovered, technically recoverable natural gas are in the Levant Basin Province, located in the Eastern Mediterranean region," the US Geological Survey said in an announcement accompanying the report.

"The Levant Basin Province is comparable to some of the other large provinces around the world and its gas resources are bigger than anything we have assessed in the United States,” said USGS Energy Resources Program Coordinator Brenda Pierce.

In addition, the report finds that in the same region, there is potential for finding some 1.7 billion barrels of oil.

However, although the numbers look big, and have the backing of a US body, a look at the sources of the report reveals that the data on which it is based are not new, and were gathered in 2000-2008. Some actually came from Israeli sources, among them Dr. Michael Gardosh, a researcher at the Geophysical Institute of Israel, and Dr. Yehezkel Druckman, who until a few years ago was Petroleum Commissioner at the Ministry of National Infrastructures.

Although the report is only about potential, and it could be that the exploration partnerships now have more up to date information, investors flocked to their participation units. Ratio, which has been a focus of attention recently, since in the next few weeks it is due to publish the results of the three dimensional seismic survey it carried out at the end of 2009, rose 14.5%. Zerah, which has an exploration permit in an area close to shore, rose 9.7%. Modiin rose 10.7%, while Israel Land Development Company (Nasdaq: ILDCY; TASE: ILDC), which only recently bought the Mira and Sara exploration licenses in the Mediterranean, rose 6.9%.

Published by Globes [online], Israel business news - - on April 11, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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