Amid reports that the Sedco Express drilling rig is due to reach the region of the Leviathan field today to begin exploratory drilling, "Globes" asked leading analysts and traders for their recommendations about holding the shares of Israel's three leading gas explorations partnerships - Avner Oil and Gas Ltd. (TASE:AVNR.L), Delek Drilling Limited Partnership (TASE:DEDR.L), and Ratio Oil Exploration Ltd. (TASE:RATI.L).
The aim of the exploratory drilling is to verify the findings of the 3D seismic survey.
IBI Investment House Ltd. (TASE:IBI) energy analyst Gil Bashan told "Globes," that all the value of all the gas partnerships is very high and there are some elements that investors are not taking into account at all such as tax risk that could rise. Bashan said, "At the moment, the price of the partnerships completely ignores the matter of tax and that is a dangerous situation."
Bashan added, "It is very difficult to understand Ratio's price. Whoever is interested in purchasing exposure to Leviathan can do so via the other partnerships - Delek Drilling and Avner - that are priced more sensibly."
Clal Finance Ltd. (TASE:CLFN) energy analyst Yaron Zer said, "The results of the Leviathan drilling will decide regarding Ratio's share. The arrival of the rig in Israel has created great interest among speculators but it is only sticking to the original timetable and is not news. Ratio's investors are expecting to find oil in Leviathan as well as gas, because otherwise the alternatives offered by other gas shares is preferable. But a 17% chance of finding oil s not a great chance and only appropriate for those who like risk."
Migdal Capital Markets Ltd. energy analyst Eran Unger said, "The market does not price the risk according to Ratio's price on the stock exchange. The market believes in a high likelihood of 70-75% in finding gas."
Published by Globes, Israel business news - www.globes-online.com - on October 11, 2010
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