After discovering that the Ofek 1 well, near Lod, was a dry hole, Globe Exploration LP (TASE: GLEX.L) is is beginning to drill Ofek 2. The partnership owns 100% of the rights to the 381/Ofek license.
Two weeks ago, Globe announced that its Ofek 1 well was a dry hole. Upon reaching the target layer for a second time, Globe carried out tests on the rock layer, and when signs of oil were not found, Globe decided not to perform production testing.
The GYP drilling tower was subsequently moved to the Ofek 2 site, which is only a few hundred meters from Ofek 1. Current drilling is actually a bypass of drilling at David 1, which was carried out at this location in the 1990s by Modiin Energy LP (TASE:MDIN.L).
The current drilling has two goals. The first is to locate the Triassic layer at a depth of 4,450 meters. The second, and main, goal is to locate natural gas in the Permian layer at a depth of 5,950 meters. According to a past prospective resources report prepared by US PeTech Enterprises for the partnership, there is a 21% chance of finding 4.15 million barrels of oil in the Triassic layer, as well as small amount of natural gas. As for the second goal, there is a 29.4% chance of finding 0.63 trillion cubic feet (TCF) of natural gas.
Drilling at Ofek 2 will last a month and a half and will cost about $5.2 million.
If Globe decides to perform production tests at Ofek 2, the budget will be increased by an additional $2.5 million. The partnership had $18 million in cash, according to the third quarter 2011 financial report, in which company data are updated through September 2011, before drilling in Ofek 2 began. Therefore, the company does not foresee any problems in financing the Ofek 2 drilling.
Published by Globes, Israel business news - www.globes-online.com - on March 11, 2012
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