Shemen Oil and Gas Resources Ltd. (TASE: SOG) and its partners have abandoned the Yam 3 well, offshore from Ashdod, after it was declared a dry hole Sunday evening.
"Analysis of the findings at the well, and on the basis of information from the well operator, nshowed o producible quantities of oil were found in the strata in which the production tests were conducted," stated Shemen Oil in a notice to the Tel Aviv Stock Exchange (TASE) today.
The Yam 3 well reached a depth of 5,700 meters, including the water depth, and cost $170 million. Shemen Oil's share of the cost was $138 million. Although the well's partners could theoretically resume drilling, the estimated cost of rehabilitating the borehole is $500,000.
The production tests were only carried out in the oil-bearing strata, not the gas-bearing strata, but Shemen Oil said that there was no timetable for carrying out production tests in the gas-bearing strata.
Shemen Oil owns 77.7% of Yam 3, Zerah Oil And Gas Explorations LP (TASE: ZRAH) owns 7.15%, Zmiha Investment House Ltd. (TASE: TZMI) 5%, and Azerbaijan's Caspian Drilling Company, the well operator, owns 10%.
Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2013
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