Pelagic gas field estimated at 6.7 TCF

Israel Opportunity estimates that the deeper strata at Pelagic might contain 1.4 billion barrels of oil or a further 13.5 TCF of gas.

Israel Opportunity Energy Resources LP (TASE: ISOP.L) today reported that the Pelagic licenses have unrisked resources of 6.7 trillion cubic feet (TCF) of gas composed of 0.5 TCF of contingent resources and 6.2 TCF of prospective resources, according to Ryder Scott Company LP. The estimated cost of an exploratory well is $100 million.

For the sake of comparison, Tamar has 9 TCF and Leviathan has 17 TCF.

Ryder Scott estimates the geologic probability of success at 28.5% in the Yoad prospect, ranging up to 76.7% in the Aphrodite prospect (which potentially has 3.7 TCF of natural gas). Ryder Scott also estimates that the deeper strata at Pelagic might contain 1.4 billion barrels of oil or a further 13.5 TCF of natural gas. The probability of success of recovering oil or gas from the deeper strata ranges from 5.3% to 12.3%.

Israel Opportunity chairman Ronny Halman says that the report's estimates are better than the estimates that the company had when it decided to acquire the Pelagic licenses. "The quantity of gas discovered in the licenses, and the high probabilities, make it the third largest offshore discovery to date. This quantity guarantees Israel's energy future for decades, and makes it possible to export Israeli gas, and boost the state's revenues without worrying about gas reserves for domestic consumption."

There are five deep-water Pelagic licenses - Aditya, Ishai, Lela, Yahav, and Yoad - covering two million dunam (500,000 acres) 170 west of Haifa, between Leviathan's Ratio Yam and Block 12, which includes the Aphrodite structure, in Cypriot waters. Israel Opportunity owns 10% of the licenses, Beny Steinmetz and Teddy Sagi each own 42.5%, and Norway's AGR Group Inc. owns 5%.

"We are preparing for the first well," Israel Opportunity CEO Eyal Shuker said. "For the logistics, we've rented port storage and operations space, we've begun ordering drilling equipment, including drill heads and casings, and we've secured most of the agreements with Israeli and foreign services and equipment providers for the well. The operator, AGR, has already brought a skilled team to Israel to manage the operation, and we expect that the Homer Ferrington rig will soon arrive at the Ishai licenses, after it successfully completes its missions at the Myra and Sarah licenses.

Israel Opportunity's share price rose 12% in morning trading but fell back strongly and ended the day down 12.9%.

Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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