Ratio Petroleum IPO oversubscribed

Leviathan drilling photo: Channel 10


Ratio Petroleum engages in oil and gas exploration in Guyana, Malta, the Philippines, and Ireland.

In the first IPO of 2017, Ratio Petroleum has scored a success, raising NIS 48 million in an offering of participation units. Demand for the oversubscribed part of the offering for investment institutions totaled NIS 60 million. Ratio Petroleum is a subsidiary of Ratio Oil Exploration (1992) LP (TASE:RATI.L), which owns 15% of the Leviathan natural gas reservoir. Ratio Petroleum, which engages in oil and gas exploration outside of Israeli economic waters, holds exploration rights in Malta, Guyana, Ireland, and the Philippines. The company also engages in development and production, mainly of marine assets.

Leader Underwriters and Discount Underwriting led the IPO. The public part of the offering will take place next Monday, and the partnership expects to raise a total of NIS 100 million. Trading in Ratio Petroleum participation units and options will begin several days later.

Completion of the full offering was actually ensured yesterday, since over half of the amount was guaranteed in advance by three players. Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva (a partner with Ratio Oil Exploration in Leviathan), undertook to buy 17.5% of the offering at a 15% discount on the price to be set in the public part of the IPO. Ratio Oil Exploration will buy 20% of the offering on the same terms as Delek Group. 12% of the offering was allocated to managers and service providers in the partnership. The extent of the investment by Delek Group and Ratio Oil Exploration will become clear after the public phase of the offering is completed.

Oil and gas exploration in Guyana and Malta

The controlling shareholders in Ratio Petroleum (the general partner) are the Landau family (40% of the general partner), the Rotlevy family (40%), geologist Eitan Eisenberg (10%), Shibolet Trustees (5%), and Adv. Orit Marom Albeck (5%). The CEO is Itay Raphael, geologist Eisenberg is a senior advisor, the exploration manager is Dr. Gal Hartman, and the external legal advisor is Richard Roberts.

Ratio Petroleum's two important concessions are for oil and gas exploration in Guyana in northeastern South America and Malta. A substantial oil field was discovered not long ago in Guyana, and ExxonMobil has undertaken to perform exploration in Ratio Petroleum's field for the partnership; in return, if oil or gas deposits are discovered, ExxonMobil will develop them. Furthermore, Ratio Petroleum is in the process of obtaining oil and gas exploration rights in the Philippines, Surinam, and another region in Guyana. Ratio Petroleum also has an option to obtain an exploration license in Ireland.

The partnership says that the concession in Malta covers 8,800 sq.m. (equivalent to 22 licenses in Israel). The sea depth in the block is 70-700 meters, and there have been oil and gas discoveries, some of them significant, south and west of the block. A 3D seismic survey was conducted in the fourth quarter of 2016, and data from it is being processed and analyzed. The budget for all the work in the Malta concession at this stage is an estimated $3.5 million. According to the partnership, potential resources in the concession amount to 4.4 TCF and 865 million barrels of oil.

Ratio Petroleum says that there is currently no oil or gas production in the Guyana area, but that ExxonMobil discovered the Liza reservoir in 2015 in Guyana economic waters. Last week, ExxonMobil reported another significant oil discovery, the Payara field, after drilling a well at a depth of 5,512 meters 16 kilometers northwest of the Liza field. Drilling results show a 29-meter high-quality oil stratum in the sand under the sea.

The Liza reservoir is at a depth of 1,800 meters. Drilling results in the reservoir indicate a discovery of 800 million-1.4 billion barrels of oil that can be produced. Ratio Petroleum has rights in Block B adjacent to the Liza field (equivalent in area to 34 licenses in Israel). ExxonMobile joined last year by signing an agreement with the partnership, in which Ratio Petroleum owns 25% of the rights in the block and ExxonMobil 50%. ExxonMobil will be the operator. The US company will pay for Ratio Petroleum's share of the cost of the two drillings in the block.

A report by the US geologist indicates that Guyana's marine basin has the second largest prospecting potential of all the world's undeveloped basins, and is likely to contain over 12.5 billion barrels of oil.

Survey in Block B

A 3D seismic survey of a 4,000 sq. kilometer area in Block B is scheduled for 2017, and data from it will be processed and analyzed in 2018. A decision about drilling in the block is expected during 2019.

Ratio Petroleum says that the relevant basin for its exploration in Ireland is south of the Porcupine basin, located 100 kilometers southwest of Ireland on the edge of the Atlantic Ocean. While the edges of the basin are shallow, the southwestern part is over three kilometers deep. The area of the rights in Ireland covers 1,560 sq. kilometers in the southern Porcupine basin. The sea depth in this area is 1,800-2,300 meters.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 19, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Leviathan drilling photo: Channel 10
Leviathan drilling photo: Channel 10
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