Sources inform ''Globes'' that drilling of the Shemen Oil and Gas Resources Ltd.'s (TASE: SOG) Yam 3 well resumed over the weekend, after it was suspended in mid-April, due to a breakdown. Drilling was resumed after the company widened the borehole and overcame the problem of high pressure in it, which had halted work.
In mid-April, Shemen Oil announced that it had halted drilling at the Yam 3 well, offshore from Ashdod, because of high pressure, which exceeded the original estimates, in the borehole. Shemen Oil's most prominent shareholders are Israel Financial Levers Ltd. (TASE:LVR), controlled by Avraham Nanikashvili, and his former partner in it, Jackie Ben-Zakan.
Shemen previously announced that, due to high pressure in the borehole in a well drilled in the area by Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) in the 1990s, "The company intends to drill the Yam 3 well using equipment and drilling machinery which will suit the high pressures and temperatures."
Shemen Oil's budget for the well is estimated at $128 million, including production tests. The company, chaired by former IDF chief of staff Gabi Ashkenazi, has raised financing for the drilling in two ways so far: an allocation of shares to external parties in exchange for a capital injection; and the sale of rights in the licenses, which has reduced the company's share in the drilling costs.
Shemen Oil declined to comment on the report.
Published by Globes [online], Israel business news - www.globes-online.com - on June 16, 2013
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