Modiin Energy LP (TASE:MDIN.L) and Israel Land Development Company Energy Ltd. (TASE: IE) today announced that they have approved the final budget timetable for the drilling of exploratory wells in the offshore Myra and Sarah licenses at a total cost of $157 million. Drilling of the first well, Myra 1, is scheduled to begin in the first quarter of 2012, and take 70 days. The companies expect results from the well during the second quarter. Drilling of the second well, Myra 2, will begin after the Myra 1 well is completed, and is due to take 50 days.
GeoGlobal Resources (India) Inc. is the well operator. The Homer Ferrington rig, owned by Noble Corporation (NYSE: NC) is due to drill the two wells.
The water depth at the Myra 1 well is 1,500 meters 60 kilometers west of Hadera and the water depth at the Myra 2 well is 1,300 meters, 80 kilometers west of the city. The Myra 1 well is targeting Upper Jurassic, Oligocene, and Miocene strata at a depth of up to 3,700 meters. The Myra 2 well is targeting Oligocene, and Miocene strata from the Tertiary Era at a depth of up to 2,400 meters.
The companies budgeted $21 million for production tests, if any, at the Myra 1 well and $22 million at the Myra 2 well.
The Myra and Sarah licenses have together 6.5 trillion cubic feet of natural gas, with a 54% chance of geologic success, and 150 million barrels of oil, with an 18% chance of geologic success. according to an analysis of the 3D survey by Netherland Sewell & Associates Ltd. (NSAI). The discovery is the third largest gas discovery offshore from Israel, after the 8.6 trillion cubic feet at Tamar and 16 trillion cubic feet at Leviathan.
ILDC Energy CEO Ohad Marani said, "The probability of success at the Myra and Sarah licenses is very high, and we intend to examine both the natural gas and oil potential at the licenses. The drilling plan was built to optimize the licenses, and we are progressing on schedule and on budget. We hope to find large commercial discoveries at these promising licenses, and notify investors as soon as possible."
Last week, ILDC Energy sold 7.6% of the two licenses to Modiin Energy for $30.5 million, reflecting a value of $400 million for them. Following the sale, ILD Energy's share in the Myra and Sarah licenses fell to 46.5% and Modiin Energy's share rose to 29.2%. Other shareholders in the licenses are ILD Energy's parent company Israel Land Development Company (TASE: ILDC), controlled by Ofer Nimrodi, with 5%, Modiin Energy shareholder IDB Holding Corp. Ltd. (TASE:IDBH) unit IDB Development Company, controlled by chairman Nochi Dankner with 5%; Israel Petroleum Company Inc. (IPC), with 13.61%, and GeoGlobal Resources Inc. (AMEX: GGR) unit GGR (India) Ltd., with 4%.
ILDC Energy's share price rose 3.6% in early trading today to NIS 0.96, giving a market cap of NIS 825 million, and Modiin Energy's share price rose 1.1% to NIS 0.365, giving a market cap of NIS 700 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2011
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