Homer Ferrington rig reaches Myra 1 license

The rig will drill the Myra 1 exploratory well for 70 days, and then drill the Sarah 1 exploratory well.

The Noble Homer Ferrington rig has reached the Myra license, where it will drill the Myra 1 exploratory well. The rig, owned by Noble Corporation (NYSE: NB) has begun preparations for the drilling (spud in), and will begin drilling in a few days.

The Myra and Sarah licenses are located 80 kilometers west of Hadera, south of the Dalit and Tamar gas discoveries. Netherland Sewell & Associates Ltd. (NSAI) estimates that the two licenses have a best estimate of 6.5 trillion cubic feet of natural gas, with a 54% probability of success, and 150 million barrels of oil with an 18% probability of success.

The Myra well is targeting strata at a depth of 3,700 meters in 1,500-meter deep water, and the Sarah well is targeting strata at a depth of 3,000 meters in 1,300-meter deep water. The Myra well is scheduled to take 70 days to drill and the Sarah well, 50 days. The licensees have budgeted $157 million to drill the two wells, and production costs, if approved, will cost an additional $43 million.

Israel Land Development Company Energy Ltd. (TASE: IE) and its affiliates own 41.6% of the Myra and Sarah licenses, and its parent company, Israel Land Development Company (TASE: ILDC), controlled by Ofer Nimrodi, owns 5%; Modiin Energy LP (TASE:MDIN.L) owns 29.2%, its shareholder IDB Development Corp. Ltd. owns 5.6%; IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC) owns 13.6% and GeoGlobal Resources Inc. (AMEX: GGR), the drilling operator, owns 5%.

Modiin Energy co-CEO Ron Maor said, "The start of drilling in the Myra license, to be immediately followed by drilling in the Sarah license, is an important milestone for the partnership and the Israeli energy industry, since the licenses have a high probability of success of finding substantial gas resources. We hope that, within a few months, we'll be able to provide a positive and clear picture to investors about the licenses' proven resources."

Modi'in Energy's share price was unchanged by midday today at NIS 0.347, giving a market cap of NIS 800 million, ILDC Energy's share price rose 2.6% to NIS 0.88, giving a market cap of NIS 850 million, and IPC's share price rose 3.7% to NIS 0.45, giving a market cap of NIS 80 million

Published by Globes [online], Israel business news - www.globes-online.com - on June 24, 2012

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

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