Leviathan as big as estimated

Noble Energy CEO Davidson: Leviathan is easily the largest exploration discovery in our history.

The natural gas reserves in the Leviathan structure total 16 trillion cubic feet of natural gas, based on preliminary results of the production tests received in the past few days. This is the amount estimated from the 3D seismic survey. The quantity is double the gas reserves at Tamar.

The results have been reported by Noble Energy Inc. (NYSE: NBL), which owns 39.66% of the prospect.

According to Noble Energy, "The well encountered a minimum of 220 feet (67 meters) of net natural gas pay in several subsalt Miocene intervals. Apparent reservoir quality is very good, and the intervals discovered are geologically similar to those intersected at Tamar."

Noble Energy CEO Charles Davidson said, "Leviathan is the latest major discovery for Noble Energy and is easily the largest exploration discovery in our history."

Noble Energy president and COO David L. Stover added, "This discovery has the potential to position Israel as a natural gas exporting nation. For nearly a year now, we have had a team evaluating market possibilities, which includes various pipeline and LNG options. It's our belief that the natural gas resources at Leviathan are sufficient to support one or more of the options being studied."

Leviathan's Israeli partners are Delek Group Ltd. (TASE: DLEKG) units 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) with 15%.

The results are from the electrical log tests, which were completed yesterday. The results almost precisely match the estimated announced on June 2, based on the 3D seismic survey. The results come exactly one month after the Israeli partners reported signs of natural gas in the first target strata at a depth of 5,100 meters.

The drilling of the Leviathan 1 exploratory well was delayed by several weeks, which added at least $20 million to the drilling costs. The original estimate cost of the well was $150 million, and the cost of leasing the Sedco Express drilling platform from Transocean Inc. (NYSE: RIG) is more than $1 million a day.

Trading in the shares of the Israeli partners in Leviathan was suspended just before 2 pm today ahead of an "important announcement". Shares in the three partnerships rose by over 4% before trading was suspended.

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

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

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