Israel Opportunity Energy Sources LP (TASE: ISOP.L), controlled by investment bankers Rony Halman and Uri Aldubi, has bought 10% of six offshore licenses from Pelagic Exploration Company for $2.5 million. The six licenses - Aditya, Aila, Ishai, Lela, Yahav, and Yoad - are located near the Leviathan lease.
The deal gives the leases an aggregate value of $25 million, compared with their previous valuation of $20 million.
Israel Opportunity beat Modiin Energy LP (TASE:MDIN.L), controlled by Nochi Dankner and Tzahi Sultan through IDB DT Energy (2010) Ltd., to the punch. Last week, Modiin confirmed a "Globes" report that it was in talks with Pelagic to acquire Pelagic's licenses.
Pelagic's licenses became hot property after Leviathan partner Noble Energy Inc. (NYSE: NBL) announced the results of the 3D seismic survey on the structure in June, which indicated a very large natural gas reserve with a 50% probability of geological success. Leviathan's reserves are estimated at double the reserves of Tamar.
Pelagic's licenses are deep water licenses 170 kilometers west of Haifa. They are bordered by the Gal license to the northeast, owned by Leviathan partner Ratio Oil Exploration (1992) LP (TASE:RATI.L), and other licenses owned by Ratio (collectively known as the Ratio Sea licenses) to the west. The Aila license covers 50,000 dunam (12,500 acres), and the other five are 400,000 dunam (100,000 acres) each.
Pelagic is incorporated in Wyoming. It is registered as the operator of the licenses. Pelagic and Israel Opportunities will sign an operating agreement ahead of the latter's general partnership meeting to approve the deal. The agreement is subject to the payment of 5% super-royalties to third parties.
The price of Israel Opportunities' partnership units rose 8.5% by early afternoon to NIS 0.204, giving a market cap of NIS 120 million. The price of Modiin Energy's partnership units fell 3.9% to NIS 0.049, giving a market cap of NIS 748 million.
Published by Globes [online], Israel business news - www.globes-online.com - on September 7, 2010
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