"The important thing is that even though the Myra 1 well did not find hydrocarbons, we are ready to take the risk and invest more money from our own pockets to drill the Sarah well. That is the real story as far as I am concerned," IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC) chairman and president Howard Cooper told "Globes" today.
IPC owns 13.6% of the Sarah and Myra offshore licenses, alongside Israel Land Development Company Energy Ltd. (TASE: IE), Modiin Energy LP (TASE:MDIN.L), and well operator GeoGlobal Resources Inc. (AMEX: GGR). On Thursday, the companies announced that no hydrocarbons were found in the Myra well's target strata. The announcement sent ILDC Energy's share price down 50% to reflect a market cap of NIS 170 million, and sent Modiin Energy's share price down 28% to reflect a market cap of NIS 325 million.
The companies are now preparing to drill the Sarah 1 exploratory well, with a budget of $70 million. The well's target strata are at a depth of 4,300 meters. Drilling by the Homer Ferrington rig is scheduled to take 50 days.
Cooper, a Colorado resident, has 25 years experience in the oil and gas exploration industry, participating in wells in the US, Kazakhstan, and Siberia. He said that IPC acquired stakes in the Myra and Sarah licenses because they met the geological and legal criteria, but that he had an additional incentive. "You usually have only one chance. Here, we have two: two independent blocks," he says. "If both wells work, it would be fantastic, but even if just one of the works, it would be a success. According to Netherland Sewell & Associates Ltd. (NSAI) estimates, if the Sarah well succeeds, we can supply a lot of gas to Israel, and it will also be profitable."
One of the big questions was the decision to first drill in the Myra license, which has a more complex geological structure than the Sarah license. Cooper says that IPC is operating in the area because of Noble Energy Inc.'s (NYSE: NBL) discoveries. "We used the same method as Noble Energy. They first drilled at Tamar, which was supposed to be a big structure, before moving on to Dalit, while simultaneously analyzing the data from Tamar. On this basis, they returned to drill the verification well at Tamar."
Cooper is highly critical of the "Globes" report in August that the Myra well was a dry hole, but on the record, he will only say, "We did not know the results when this was published, because we hadn’t yet reached the target strata."
Cooper adds, "We wanted the public to make money, but it is important to remember that my partners and I own more than 80% of the company and we put a lot of our own money into it." He is implying that the Myra licensees, including IPC, would not have invested in the well if they thought that it was not to their advantage.
IPC's share of the financing of the Myra and Sarah wells is from IPC chairman: Sarah can still succeed Howard Cooper sound sanguine about the chances of success at Sarah, despite the Myra well's failure. Ron Steinblatt "The important thing is that even though the Myra 1 well did not find hydrocarbons, we are ready to take the risk and invest more money from our own pockets to drill the Sarah well. That is the real story as far as I am concerned," IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC) chairman and president Howard Cooper told "Globes" today.
IPC owns 13.6% of the Sarah and Myra offshore licenses, alongside Israel Land Development Company Energy Ltd. (TASE: IE), Modiin Energy LP (TASE:MDIN.L), and well operator GeoGlobal Resources Inc. (AMEX: GGR). On Thursday, the companies announced that no hydrocarbons were found in the Myra well's target strata. The announcement sent ILDC Energy's share price down 50% to reflect a market cap of NIS 170 million, and sent Modiin Energy's share price down 28% to reflect a market cap of NIS 325 million.
The companies are now preparing to drill the Sarah 1 exploratory well, with a budget of $70 million. The well's target strata are at a depth of 4,300 meters. Drilling by the Homer Ferrington rig is scheduled to take 50 days.
Cooper, a Colorado resident, has 25 years experience in the oil and gas exploration industry, participating in wells in the US, Kazakhstan, and Siberia. He said that IPC acquired stakes in the Myra and Sarah licenses because they met the geological and legal criteria, but that he had an additional incentive. "You usually have only one chance. Here, we have two: two independent blocks," he says. "If both wells work, it would be fantastic, but even if just one of the works, it would be a success. According to Netherland Sewell & Associates Ltd. (NSAI) estimates, if the Sarah well succeeds, we can supply a lot of gas to Israel, and it will also be profitable."
One of the big questions was the decision to first drill in the Myra license, which has a more complex geological structure than the Sarah license. Cooper says that IPC is operating in the area because of Noble Energy Inc.'s (NYSE: NBL) discoveries. "We used the same method as Noble Energy. They first drilled at Tamar, which was supposed to be a big structure, before moving on to Dalit, while simultaneously analyzing the data from Tamar. On this basis, they returned to drill the verification well at Tamar."
Cooper is highly critical of the "Globes" report in August that the Myra well was a dry hole, but on the record, he will only say, "We did not know the results when this was published, because we hadn’t yet reached the target strata."
Cooper adds, "We wanted the public to make money, but it is important to remember that my partners and I own more than 80% of the company and we put a lot of our own money into it." He is implying that the Myra licensees, including IPC, would not have invested in the well if they thought that it was not to their advantage.
IPC's share of the financing of the Myra and Sarah wells is from Ofer Investments Ltd., controlled by Leora Ofer, which acquired 6.8% of the two licenses, half of IPC's stake in them, for $28 million. Cooper says, "They are the best partners I've had in all my years in this business."
Cooper also has no complaints against his fellow licensees. "One of the reasons we acquired stakes in the licenses was that Israel is a country of law, and all the agreements we signed with the partners will be honored."
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012 controlled by Leora Ofer, which acquired 6.8% of the two licenses, half of IPC's stake in them, for $28 million. Cooper says, "They are the best partners I've had in all my years in this business."
Cooper also has no complaints against his fellow licensees. "One of the reasons we acquired stakes in the licenses was that Israel is a country of law, and all the agreements we signed with the partners will be honored."
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012