IEC in first meeting with Sarah, Myra licensees

ILDC Energy told Israel Electric Corporation executives that the target date for the supply of gas is 2015-2016.

There has been a first meeting between the Israel Electric Corporation (IEC) (TASE: ELEC.B22) and the partners in the Myra and Sarah gas fields licenses. Israel Land Development Company Energy Ltd. (TASE: IE) CEO Ohad Marani has met with senior IEC executives to discuss the sale of gas from the Sarah and Myra wells.

Sources familiar with the meeting described it as "an opening shot" in the competition that is developing between Israel's natural gas suppliers. One of the participants in the meeting told "Globes" that, "Both sides were very serious and the quantities of gas talked about were significant."

Sources inform "Globes" that the target date for the supply of gas from Myra and Sarah presented to the IEC executives was 2015-2016.

Marani was invited to the meeting following publication last week of the findings of the 3D seismic survey by Netherland Sewell & Associates Ltd. (NSAI). NSAI found that the fields have a mean estimate of 6.5 trillion cubic feet of natural gas with a 54% probability of geologic success and 150.7 million barrels of oil with an 18% probability of geologic success. But there was a huge difference between the low estimate of 673 billion cubic feet of gas for Myra and Sarah and the 16.2 trillion cubic feet of the high estimate, while the best estimate is just 2.9 trillion cubic feet - 55% less than the gross mean reserve of 6.5 trillion cubic feet.

Because of this wide gap the license holders - Israel Land Development Company Energy Ltd. (TASE: IE), controlled by Ofer Nimrodi, Modiin Energy LP (TASE:MDIN.L) controlled by Nochi Dankner and Tzach Sultan, Premium (PIH) Holdings Ltd. (TASE: PIH), controlled by Yuli Ofer, fell 13.5% to NIS 1.23, and Shaldieli Ltd. (TASE: SHDL-M) - have seen their shares lose ground over the past week.

The meeting was seen as exploratory and no commitments were made regarding entering negotiations.

IEC declined to comment on the report.

The amount of gas in the Myra and Sarah fields will only be clear after exploratory drilling is completed in the first quarter of 2012.

The IEC is in the final stages of negotiations with the Tamar partners for a huge deal to acquire natural gas. The Tamar partners are headed by Noble Energy Inc. (NYSE: NBL) and Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG).

Published by Globes, Israel business news - - on July 7, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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