Leviathan reaches first target strata

The Leviathan drilling is believed to have found signs of gas; Noble Energy CEO Charles Davidson will pay a two-day visit to Israel.

The Leviathan exploratory well has reached its first target strata. The well at the sight owned by Noble Energy Inc. (NYSE: NBL) of the US, Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L), and Ratio Oil Exploration (1992) LP (TASE:RATI.L), reached a depth of 5,100 meters. Sources inform ''Globes'' that signs of gas have been found. The Israeli partners in Leviathan announced that they were about to make an important announcement, and that trading in their shares has been suspended until afterwards.

Drilling of the Leviathan exploratory well began on October 18, on the basis of the 3D survey of the structure, which indicated the presence of 453 billion cubic meters of natural gas with a geologic chance of success of 50%. Over the next few days, additional tests (logs) will be conducted to obtain a more accurate picture of the strata and the quantities and quality of the natural gas.

The next stage of the exploratory well is to reach the second target strata, which may include oil. This will only become known in early 2011. The second strata, at a depth of 5,800 meters, have a geologic chance of success of 17% of finding three billion barrels of oil. If oil is found, it will have dramatic repercussions that would be at least as great as the Tamar natural gas discovery.

Noble Energy estimates that there is a small chance of finding very large quantities of oil beneath Leviathan's natural gas strata. The objective is to find the basement strata, which is not yet known to the drillers, and it is uncertain if the pressures at the depth will require replacing the drilling rig with another one.

The third target strata, at a depth of 7,200 meters, have a geologic chance of success of 8% of finding 1.2 billion barrels of oil. It is still uncertain whether the exploratory well will continue to the third target strata. A decision will only be made after reaching the second target strata.

Yesterday, "Globes" reported that Noble Energy CEO Charles Davidson is coming for an unexpected two-day visit to Israel. He will reportedly meet with Minister of Finance Yuval Steinitz, Minister of National Infrastructures Uzi Landau, and Governor of the Bank of Israel Prof. Stanley Fischer. He may also attend a public hearing of the Sheshinski committee. Rumors in the capital market claim a connection between the timing of Davidson's visit and the pending announcement of the preliminary findings of the Leviathan exploratory well, but no official confirmation of this has been obtainable.

Delek's share price rose 2.5% to NIS 970, before trading in the share was suspended, Delek Energy Systems Ltd. (TASE: DEOL) rose 5.7% NIS 1,480, Avner rose 1.4% to NIS 2.50, Delek Drilling rose 1.4% to NIS 14.30, and Ratio rose 12% to NIS 0.57.

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

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

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