Following the failure of the Myra 1 well, which sent the share prices of its partners plummeting, the partners today notified the TASE that they began drilling the Sarah 1 exploratory well last Thursday. The Myra and Sarah licensees are Modiin Energy LP (TASE:MDIN.L) (with a 29.2% stake), Modiin parent company IDB Development Corp. Ltd. (5.6%), Israel Land Development Company Energy Ltd. (ILDC Energy) (TASE: IE) (41.6%, through subsidiaries Emanuel Energy Ltd. and Emanuel Oil and Gas Exploration LP), ILDC Energy parent company Israel Land Development Company (TASE: ILDC) (5%), IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC) 13.6%) and well operator GeoGlobal Resources Inc. (AMEX: GGR) (5%).
The well's budget is $70 million, and it is targeting strata are at a depth of 4,300 meters. The drilling is scheduled to take 50 days. The Sarah license is located south of the Dalit natural gas discovery. If signs of gas are found, the partners may decide to conduct production tests, at an estimated cost of $20 million.
Netherland Sewell & Associates Ltd. (NSAI) gives the Sarah license a best estimate of 1.5 trillion cubic feet of gas (TCF), slightly more than its estimate for the Myra license. NSAI estimated the chance of success at Sarah at 54%, which is fairly high, but less than the 63% chance estimated for Myra.
The Sarah partners said that the Homer Ferrington rig reached the Sarah well site, after leaving the Myra well, and began drilling on Thursday. The Homer Ferrington is a deep water rig owned by Noble Corporation (NYSE: NE).
ILDC Energy CEO Ohad Marani said, "We hope and believe that the extensive geological information and the data collected at the Myra well will help us achieve a commercial gas discovery at Sarah."
Commenting on the Sarah well two weeks ago, Marani said, "This well will be easier because we have data, and this is a simple dome structure with no complex or unknown structure, such as the mountain at Myra."
Published by Globes [online], Israel business news - www.globes-online.com - on September 23, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012