Participation units in Navitas Petroleum (TASE: NVPT.L), led by Gideon Tadmor, were up 9% today and have risen 16% in the past three trading days.
The partnership searches for and develops oil and gas properties in North America. In the Buckskin project in the Gulf of Mexico, the operator, LLOG, has reported a successful conclusion to its work in completing its second development drilling, thereby finishing most of the work on its approved development program in preparation for oil production in the project.
The Buckskin discovery, in which Navitas holds 7.5% of the rights, contains 515 million barrels of oil. Following the completion of development drilling, which included production flow tests in which oil was successfully produced from all the layers completed for production in the project, the partners in the project will be able to continue their progress towards the commencement of production, scheduled for mid-2019. 70% of the budget in the project has been invested so far, as planned.
The remaining work before production in the project starts includes adjustments to the production platform and installing the production and undersea piping equipment purchased for the project. The projected production rate in the project is 30,000 barrels a day (11 million barrels a year).
The other main partners in the Buckskin project are Repsol E&P USA, a large oil company, and leading private equity funds Blackstone Energy Partners and Riverstone.
Following the surge in its price in recent days, the value of the Navitas Petroleum partnership has reached NIS 572 million. Since first listed for trading on the Tel Aviv Stock Exchange (TASE) just over a year ago, the price of the participation units has surged by over 140%.
Navitas, which raised NIS 530 million in an issue of bonds and participation units in the summer of 2017, focuses on searching for and locating projects, the development of existing licenses in the Gulf of Mexico, and initial work for processing information on these licenses.
The two bond series issued for the purpose of purchasing rights in the Buckskin project (Navitas Finance A and B) are currently trading at yields of 6.2-6.9%, after rising 20% in the past year.
Navitas is controlled by Tadmor, CEO Chanan Reichman, Koby Katz, and Chanan Wolf. Investors in the partnership include Oudi Recanati, Gil Agmon, Avinoam Finkelman, Israel Goren, Zvi Barak, Daniel Jusidman, and the teachers' advanced training funds.
Tadmor said today, "The rapid and excellent performance by LLOG in the development drilling in Buckskin, an extremely significant milestone in the project's development, is evidence of the highly developed professional capabilities of the operator. The imminent commencement of commercial production in the project will generate a strong cash flow for Navitas."
Published by Globes, Israel business news - en.globes.co.il - on October 28, 2018
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