Leviathan partners: 4.2b barrels of oil beneath gas

Partners: It is premature to decide whether to drill wells into the two deep structures.

There are chances of finding 4.2 billion barrels of oil in deep structures beneath the natural gas structures at the Leviathan prospect, the Israeli partners stated in a notice to the TASE today.

The Leviathan partners said that there was a probability of geological success of 17% of finding 3 billion barrels gross unrisked mean resources available for production at a depth of 5,800 meters, and an 8% chance of finding a reserve of 1.2 billion barrels at a depth of 7,200 meters.

The two structures with oil are below a structure with a 50% probability of geological success of having 16 trillion cubic feet (453 billion cubic meters) of natural gas.

The Leviathan partners cautioned that it was premature to decide whether to drill wells into the two deep structures, and that a decision will be made after critical information is obtained during the drilling to Leviathan's natural gas structure. This well is scheduled for late October.

The partners also announced the development plan for the huge natural gas reserves located at a depth of 1,634 meters, 135 kilometers west of Haifa.

The day after the Leviathan partners announced the natural gas discovery at the prospect in June, Delek Group controlling shareholders Yitzhak Tshuva said that "signs of oil" had been found beneath the natural gas structure. It turns out that there is a lot more than just signs; albeit with a much lower probability of production than for the higher natural gas reserves.

The Leviathan partners are Noble Energy Inc. (NYSE: NBL) with a 39.66% holding, Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) (22.67% each), and Ratio Oil Exploration (1992) LP (TASE:RATI.L) (15%).

Delek Group's share price rose 3.4% in morning trading to NIS 931.90, Avner's share price rose 5.8% to NIS 2.18, Delek Drilling's share price rose 6.8% to NIS 12.43, and Ratio's share price rose 10.6% to NIS 0.377.

Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2010

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

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