Last week, Shemen Oil and Gas Resources Ltd. (TASE: SOG) announced the final abandonment of the Yam 3 well offshore from Ashdod, after the $170 million well was declared a dry hole. Shemen Oil's share price fell 90% following the announcement, but it now seems that the company's shareholders do not agree about its future.
"Shemen Oil has not reached the end of the road," said one of the company's controlling shareholders, Jackie Ben-Zaken last week, after the disappointing results. "I have no doubt that we will return to the same borehole to examine its natural gas potential."
Shemen Oil's share price fell 87% that day, and Ben-Zaken backed his words with deeds, buying NIS 3 million worth of shares at NIS 0.126 per share.
Shemen Oil's slide continued over the next two sessions, and the share price fell another 34%. For Ben-Zaken, this resulted in a 30% loss compared with the price at which he bought the shares, and he lost almost NIS 1 million on his investment (in addition to the millions of shekels he already lost in the well).
Ben-Zaken is apparently unconcerned about the loss. On Sunday, Shemen Oil announced that, on Thursday, Ben-Zaken bought more shares in the company at NIS 0.09 per share, valuing the company at NIS 47 million. He bought shares to the tune of NIS 225,000, making him the largest shareholder in the company, with a 14% stake.
For another Shemen Oil shareholder, Eden Energy Discoveries Ltd. (TASE: EDN), the results of the production tests were enough for it to sell its stake at a heavy loss. Eden Energy's shareholders include some of Israel's leading businessmen, such as Nathan Hetz, Victor Shamrich, and the Wertheim family, as well as Kardan Technologies Ltd. and DS Apex Holdings Ltd. Last week, it announced that it had sold its entire stake in Shemen Oil (about 3%) for NIS 1.9 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2013
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