Following the failure of the Yam 3 well, Shemen Oil and Gas Resources Ltd. (TASE: SOG) chairman Gabi Ashkenazi has resigned as chairman, 18 months after his appointment.
In the announcement, Shemen Oil said that Ashkenazi thanked the company. He cited the completion of the well and the fact that no oil was found, as well as the need for immediate cuts in the company's costs as the reasons for his decision. "The board of directors expressed its great appreciation for Ashkenazi's efforts in achieving the well's final objective," the company's statement said.
At Wednesday's meeting, the board of directors appointed Michael Bar-Haim as acting chairman. He has served as a director, after previously holding senior positions at Bank Leumi (TASE: LUMI) and other public companies.
Since taking up his post as Shemen Oil chairman in November 2011, Ashkenazi earned a salary of NIS 100,000 a month, plus generous benefits. His total salary cost is estimated at NIS 3 million.
On October 13, the Yam 3 partners announced that the well was a dry hole, according to the well operator, Caspian Drilling Company Ltd., after it carried out production tests in two sections of the borehole. A few days later, Shemen Oil announced that the partners were abandoning the well, following the failure of the production tests. Shemen Oil's share price has fallen 92% since the announcement.
In the announcement at the time, Shemen Oil said, "Analysis of the findings at the well, and on the basis of information from the well operator, showed no producible quantities of oil were found in the strata in which the production tests were conducted." The 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.
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2013
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