Israel Oil & Gas Exploration Boom Continues

Haaretz

Israel has natural gas fever, to judge by the line at the National Infrastructure Ministry’s oil board. “Even when they discovered the Heletz field in the south [in 1955] people weren’t lining up here, but this time even leading financial institutions have been backing all kinds of searches,” a member of the ministry’s oil board told TheMarker. The board member, Ron Nahman, who is also mayor of Ariel, said, “We haven’t had this many requests and inquiries in the past nine years. There’s never been interest like this.” Nahman and the other eight board members are responsible for allocating drilling and exploration rights within Israel and off the country’s shores. (Avi Bar-Eli)

Virtual Jerusalem

The Oil Law advisory council at the Ministry of National Infrastructures met on Monday to review and discuss applications for oil and natural gas exploration licenses and oil production licenses. The council reviewed many applications for oil and natural gas licenses, including oil shales and the transfer of rights.

The council approved six applications:

• A license for Modiin Energy LP for the Yam Hadera prospect.
• A preliminary permit with forward rights for Zerah Oil And Gas Explorations LP and Ginko Oil Exploration LP for the Gulliver offshore prospect.
• A license for Ginko for the land Orly prospect.
• A license for Swiss-based Rig Builders Contracting SA for the land Gurim prospect.
• A license for Dr. Baruch Drin Consultants and Services Ltd. and Griffin Strategic Investments Ltd. for the land Yahel prospect.
• A license for ACC Resources Ltd. for land Shemen prospect (in the Med Ashdod area).

The initial permit is for a maximum of 18 months for an unlimited area, during which preliminary surveys are conducted, including the collation of all current material as well as new material to fill in the information gaps. When the permit period expires, the licensee must apply for a drilling prospect.

A license is for three years, with an option for renewal, and requires drilling a well. An extension is for a maximum of seven years.

If and when commercial quantities oil or gas are discovered, the license is for a maximum of 50 years. The holding will not be granted for more than 30 years in the first stage, and only subject to justifying the reservoir’s potential.

Bontan Announces Two More Huge Israeli Gas Fields

Canada’s Bontan Corporation Inc. (Bulletin Board: BNTNF) subsidiary Bontan Oil and Gas Exploration today announced that its Mira and Sarah prospects offshore from Israel have up to 6 trillion cubic feet of natural gas, worth up to $7.54 billion, at current prices.

The Mira and Sarah prospects are located just south of the Tamar and Dalit prospects, where Delek Group Ltd. (TASE: DLEKG) and its partners, Noble Energy Inc. (NYSE: NBL), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd found natural gas last year, which some sources estimate to be worth up to $40 billion. The prospects are north of Yam Tethys’ Mary prospects offshore from Ashkelon, BG Group plc’s (NYSE; LSE: BG) undeveloped fields offshore from Gaza, and East Mediterranean Gas Co. (EMG) fields offshore from El Arish in Sinai.

Bontan’s prospects are just north of the Gabriella prospect, which Modiin Energy LP (TASE:MDIN.L) acquired 70% of from Canada’s Adira Energy Corporation (XETRA: AORLB8; Bulletin Board: AMGOF) subsidiary Adira Energy Israel Ltd. last week.

The Evaluation Report prepared by Chapman Petroleum Engineering Ltd. estimates that the Mira prospect has 3.03-5.45 trillion cubic feet of gas, with the best estimate of 4.24 trillion cubic feet. The Sarah prospect has 1.05-1.89 trillion cubic feet of gas, with a best estimate of 1.47 trillion cubic feet.

According to Chapman, the present value of gas in the Mira prospect is $2.54-5.37 billion, with $3.96 billion as the most likely amount. The value of gas in the Mira prospect is $1.02-2.17 billion, with $1.59 billion as the most likely amount. The probable value of the gas at the two prospects is $5.55 billion.

Bontan indirectly owns 71.625% of the Mira and Sarah prospects through its 75% stake in Israel Petroleum Company, which owns 95.5% of the drilling licenses.

Chapman concludes, “Based on our analysis, after consideration of risk, we have concluded that the potential of these prospects is of sufficient merit to justify the work program being proposed, and we therefore recommend and support the company’s participation.”

The Mira and Sarah Drilling Licenses are adjoining 154-square mile blocks located 50-100 kilometers offshore from the Netanya-Hadera area. No exploratory drilling has been done on either block to day. A 3D seismic survey was completed on both blocks in late 2009 and is currently undergoing analysis.

Bontan CEO Kam Shah said, “The company is very pleased with the results of the Evaluation Report on these offshore Israeli prospects. This independent technical assessment confirms that these exploration blocks are indeed world class assets and completely justify the company’s investment of time and capital in this highly significant project. A review of global exploration discoveries in 2009 just published by the American Association of Petroleum Geologists also reported that the recent offshore Israel natural gas discoveries were among the most significant in the world. This independent technical report places the company’s prospects in the same geological setting as the 2009 offshore Israel discoveries. Our next step is the completion of the processing and interpretation of the 3D geophysical survey acquired over the Mira and Sarah drilling licenses. Firm drilling locations can then be selected on both prospects and application made to the Government of Israel to commence an exploratory drilling program.”

Oil Discovered Near Dead Sea

JERUSALEM, Jan 24 (Reuters) – An Israeli oil exploration group said on Sunday it has found indications of oil in drilling near the Dead Sea.

But the group said it was not yet clear if there were commercial quantities of oil at the Tzuk Tamrur 4 site.

“A preliminary analysis found the target with oil-bearing sandstone,” it said in a statement to the Tel Aviv Stock Exchange.

The site was drilled to a depth of 2,040 metres and the group plans to drill further to 2,150 metres.

When drilling is complete the group will then decide whether it was viable to pursue production tests, it said.

Zerah Oil and Gas Exploration (ZRAHp.TA) owns half of the exploration group, with Delek Drilling (DEDRp.TA) and Avner Oil Exploration (AVNRp.TA) owning 25 percent each. Delek and Avner are units of conglomerate Delek Group (DELKG.TA).

Zerah’s shares were up 14.7 percent in afternoon trading. Delek Drilling’s shares were 0.2 percent lower and Avner’s shares were down 1 percent, compared with losses of 2.3 percent on the broader Tel Aviv bourse. (Reporting by Steven Scheer; Editing by Greg Mahlich)

Special Report: Zion – The Movie

Special Report: Zion – The Movie

I traveled to Israel last week to work with Charter Films Limited, a UK film company. We (they) were doing preliminary shooting for a film about Zion Oil’s search for oil in Israel. Tom Boulting, Charter’s CEO met Richard Rinberg, Zion’s CEO on a flight to London a few months back and Richard shared the Zion Oil story with Tom. Tom was fascinated. As a filmmaker, Tom saw great possibilities for a documentary on Zion Oil; but after spending a few days with Richard and Zion Founder John Brown at Zion’s drilling sites in Israel he realized that a sixty minute documentary could only tell half the story. Tom started thinking ‘movie’.

As the ‘oil in Israel’ story teller up to this point, I was invited to spend last week with Tom and his cameraman, Jim, ‘on site’ while they filmed preliminary footage for both the documentary and a possible feature length film. I was able to share the ‘back-story’ with Tom and Jim, both on and off camera. They even christened me into the ‘film crew’ on location by letting me hold the boom mike during interviews and taught me some movie making lingo. It was a great experience personally, but more exciting was the realization that the world will soon witness the Zion Oil story through documentary on the small screen (TV) and (one day) on the big screen as a feature length movie.

There’s a lot of work to be done now by Charter Films, editing footage and preparing a short ‘promo’ piece to share with potential film partners. Speaking of ‘promo’ pieces, Charter Films is planning to join us at the 2010 National Religious Broadcasters’ Convention next February in Nashville to debut a sneak peek of “Zion – The Movie”.

Next week we’ll have http://zionthemovie.com online. By the time you’re about done with that left-over turkey, you’ll be able to visit the new website for great pictures, meet the director and stay up to date on the making of “Zion – The Movie”. Of course we’ll always give you the latest news here at http://oilinisrael.net.

Oh Christmas Tree!

Since the holidays are quickly approaching I thought I’d include a short article on Christmas trees. Normally, you’d think Christmas trees and Israel wouldn’t go together. But there’s a Christmas tree already up at Zion Oil’s Ma’anit-Rehoboth #2 site. It’s not green (it’s kind of a dirty gray) and it doesn’t have needles, but there are a good many valves.

The Ma’anit-Rehoboth #2 Christmas tree is installed on the wellhead. I’ll leave it to Wikipedia to explain why it’s there and what it does.

From: http://en.wikipedia.org/wiki/Christmas_tree_(oil_well)

Note that a tree and wellhead are separate pieces of equipment not to be mistaken as the same piece. For clarity, a wellhead must be present in order to utilize a Christmas Tree and a wellhead is used WITHOUT a Christmas Tree during drilling operations, and also for riser tie-back situations which would then have a tree included at riser top. Producing surface wells that require pumps (pump jacks, nodding donkeys, etc.) frequently do not utilize any tree due to NO pressure containment requirement.

Tree complexity has increased over the last few decades. They are frequently manufactured from blocks of steel containing multiple valves rather than made from multiple flanged valves.

The primary function of a tree is to control the flow into or out of the well, usually oil or gas. A tree often provides numerous additional functions including chemical injection points, well intervention means, pressure relief means (eg annulus vent), tree and well monitoring points (such as pressure, temperature, corrosion, erosion, sand detection, flow rate, flow composition, valve and choke position feedback, connection points for devices such as down hole pressure and temperature transducer (DHPT), etc.

When the operator, well, and facilities are ready to produce and receive oil or gas, valves are opened and the release of the formation fluids is allowed to flow into and through a pipeline. The pipeline then leads to a processing facility, storage depot and or other pipeline eventually leading to a refinery or distribution center (for gas).

A tree may also be used to control the injection of gas or water injection application on a producing or non-producing well in order to sustain economic “production” volumes of oil from other well(s) in the area (field).

On producing wells, injection of chemicals or alcohols or oil distillates to prevent and or solve production problems (such as blockages) may be used.

A typical sophisticated surface tree will have at least four or five valves, normally arranged in a crucifix type pattern (hence the endurance of the term “Christmas tree”). The two lower valves are called the master valves (upper and lower respectively) because they lie in the flow path, which well fluids must take to get to surface. The lower master valve will normally be manually operated, while the upper master valve is often hydraulically actuated, allowing it to be a means of well control while an actuated wing valve is normally the primary well remotely (from control room or control panel) controlled valve. Hydraulic tree wing valves are usually built to be fail safe closed, meaning they require active hydraulic pressure to stay open.

If you’re lucky enough to visit Zion’s well site one day, you’ll know why that complicated combination of valves and gauges is there and what it’s called – a Christmas tree!

Zion Oil Founder John Brown on Jewish Voice TV

Zion Oil Founder & Chairman John Brown will appear on the Jewish Voice television show with host Jonathan Bernis during the week of November 9. The Jewish Voice airs on networks and independent television stations in the United States and internationally.

Below is a full listing of times and networks/stations:

Jewish Voice with JB  Weekly Schedule
Market		800#	TV Station	Affiliate	Time Period
National	MON	800-509-9588	TCC-Church Chan		Mon 7:30am (PT)
Tampa, FL	MON	800-514-4588	WCLF-TV 22	Ind	Mon 11:30am (EST)
Dallas	MON	800-514-4588	KTAQ – TV 47	Ind	Mon 1:00pm (CST)
Orlando, FL	MON	800-514-4588	WACX – TV 9	Ind	Mon 7:30pm (EST)
National	TUES	800-588-9722	Angel One		Tue 8:30am (EST)
Bellingham, WA/Vanouver BC	TUES	800-514-4588	KVOS-12	Ind	Tues 9:30am (PST)
National	TUES	800-305-7140	Daystar		Tue 10:00am (CST)
El Paso, TX	TUES	800-514-4588	KSCE-TV 38	Ind	Tue 7:30pm (CST)
Tampa, FL	TUES	800-514-4588	WCLF-TV 22	Ind	Tue 11:30pm (EST)
National	WED	800-509-9588	TCC-Church Chan		Wed 4:30am (PT)
Orlando, FL	WED	800-514-4588	WACX – TV 9	Ind	Wed 3p (EST)
National	WED	800-306-0162	WHT Network	LeSea	Wed 6:30 PM (EST)
Ft Myers FL	WED	800-514-4588	WRXY TV 49	CTN	Wed 10pm (EST)
National	WED	800-902-6346	NRB Network		Wed 11:00pm (EST)
National	THUR	800-509-9588	TCC-Church Chan		Thu 8:30a (EST)
National	THUR	800-588-9722	Angel One		Thu 8:30a (EST)
Phoenix, AZ	THUR	800-514-4588	KPAZ-TV 21	TBN	Thu 9:30am (AZ local time)
National	THUR	800-588-0249	Cornerstone		Thu 5:30 PM (EST)
National	FRI	800-306-0162	WHT		Fri 3:30a (EST)
National	FRI	800-902-6346	NRB Network		Fri 4:00a (EST)
Orlando, FL	FRI	800-514-4588	WACX – TV 9	Ind	Fri 11:00a (EST)
National	FRI	800-588-0249	Cornerstone		Fri 11:30a (EST)
Orlando, FL	FRI	800-514-4588	WTGL	Ind	Fri 12:30p
National	FRI	800-509-9588	TCC-Church Chan		Fri 4:00p (PST)
National	FRI	800-588-9722	Angel One		Fri 6:30p (EST)
National	SAT	800-902-6346	NRB Network		Sat 5:00 PM (EST)
National	SAT	800-588-0249	Cornerstone		Sat 7:30 PM (EST)
Orlando, FL	SUN	800-514-4588	WACX – TV 9	Ind	Sun 12:30am (EST)
Orlando, FL	SUN	800-514-4588	WTGL	Ind	Sun 7:00am (EST)
National	SUN	800-588-9588	Cornerstone		Sun 9:00am (EST)
National	SUN	800-588-9722	Angel One		Sun 10:00am (EST)
Philadelphia PA	SUN	800-514-4588	WFMZ	Ind	Sun 9:30 am (EST)
Orlando, FL	SUN	800-514-4588	WTGL	Ind	Sun 12:00pm (EST)
El Paso, TX	SUN	800-514-4588	KSCE-TV 38	Ind	Sun 5:00pm (CST)
National	SUN	800-306-0162	WHT		Sun 12:00p EST
Orlando, FL	SUN	800-514-4588	WTGL	Ind	Sun 7 pm (EST)
National	SUN	800-902-6346	NRB Network		Sun 7:00 PM (EST)
National	SUN	800-588-9722	Angel One		Sun 8:30pm (EST)
Cleveland, OH	SUN	800-514-4588	WGGN-TV 52	Ind	Sun 9:30pm (EST)
International		800-306-0161	Miracle (CJIL)		Tue 9:00pm (MST)
Canada					Thurs 5p
					Fri 5a (MST)
					Fri 6p (MST)
					Sun 2:30p (MST)
International		800-2200-2401	GOD TV  UK		Thurs 12p
UK		800-2200-2401	GOD TV  UK		Wed 12:30p
		800-2200-2401	GOD TV  UK		Sun 11:30a
International		800-305-7527	GOD TV  US		Wed 12:30p EST
International Outreach – Not on Media Reports:
CNL Russia
		Wednesday 10am
		Sunday 11:55am
Life TV  Russia		Tuesday 8pm
		Wednesday 12pm
		Wednesday 3am

Adira Energy Awarded Offshore License

(source: Scandinavian Oil & Gas Magazine)

AMG Oil says that the Israeli Petroleum Commissioner’s office has notified the Company that, during the most recent sitting of the Israeli Petroleum Board, the Company, through its wholly-owned subsidiary Adira Energy Corp., was awarded a second petroleum license in offshore Israel (the “Yitzhak License”).

Yitzhak License The Yitzhak License area is centered approximately 17 km off the Israeli coast and stretches from Netanya in the South to Hadera in the North (about 11 km). The Yitzhak License covers a total license area of 127,700 Dunam (approximately – 127.7 square kilometers or 31,555 acres). The Yitzhak License is directly to the North of, and contiguous to the company’s Gabriella License.

The license area is in shallow water with a depth of approximately 150 meters, which the Company believes will make drilling more cost efficient. The Yitzhak License has been granted for an initial period of three years commencing October 15, 2009.

Stephen Pierce, AMG’s Senior Vice President of Geology, said, “During early 1970 an oil well located in the area covered by the Yitzhak License called “Delta-1″ was drilled. The total depth of Delta-1 was 4423m, and ended in the Upper Jurassic. However, this depth is above the oil encountered in the Jurassic Bathonian age limestones in the Yam Yafo-1 (4894m – 4955m) and Yam-2 wells (5315m). It remains unclear as to why drilling stopped at this depth. However, the Delta-1 well was drilled in 1970 before the later discoveries of Yam Yafo-1 and Yam-2. Subsequent to Delta-1 being drilled, seismic mapping demonstrated a structural high extending from Delta-1 to the oil discoveries at Yam Yafo-1 to Yam-2. We believe that we have a good prospect that is an attractive target for hydrocarbon exploration.”

The Company’s successful application for the Yitzhak License expands AMG’s portfolio of petroleum licenses from its current two licenses (“Eitan” and Gabriella”) to include a prospective offshore area within a region that is known to host significant evidence of hydrocarbons.

AMG’s Chief Executive Officer, Ilan Diamond stated, “We are very pleased to have been successfully granted the Yitzhak License, the second block in the region. Both the Company’s offshore licenses, “Gabriella” and “Yitzchak” are within the broader region of the Nobel/Delek Tamar gas discoveries, which are 60 km west of Hadera (Dalit) and 90 km west of Haifa (Tamar). Evaluation work on our ‘Gabriella’ license has recently commenced and we are excited to continue work on this license. In addition, we continue to plan for the start of our exploration and drilling program on our “Eitan” license in the Hula Valley, northern region of Israel. We have completed the purchase of the drill rig and associated equipment, and are in the process of moving the rig to site. We have contracted the services of a full time drilling team who have significant experience operating rigs of similar nature and who have worked in the area previously.”

Zerah teams with Delek to expand Dead Sea oil exploration

GLOBES

Thu. October 15, 2009

Zerah teams with Delek to expand Dead Sea oil exploration: In 1995, a 2,000-meter well was drilled in the Halamish section, which found oil and gas.

Zerah Oil And Gas Explorations LP (TASE: ZRAH) is expanding its activity in the Dead Sea. The company has bought the 335-square kilometer Zurim license from Fore Group Ltd. subsidiary Ginko Oil Exploration Ltd., which abuts Zerah’s license. Delek Group Ltd. (TASE: DLEKG) units owns half of a 35 square kilometer section of the Zurim License, known as the Halamish section through Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L).

Zerah will pay for the Zurim license out of future revenue from oil or gas production, if any. Zerah will pay Ginko a 2.5 percent royalty of revenue and provide it a $2 million grant, provided that an independent expert determines that the oil and gas reserves in the license are worth at least $250 million. In addition, the Supervisor of Oil at the Ministry of National Infrastructures will have to declare a discovery at the license, and the partnerships’ revenue from a discovery at the Zurim license will exceed $100 million.

In 1995, a 2,000-meter well was drilled in the Halamish section, which found oil and gas. However, no production was carried out because the price of oil at the time rendered the discovery uneconomical.

The Halamish partners intend to drill a new well at the site, which is about five kilometers from Tzuk Tamrur 4 site, where Zerah and Delek are due to begin drilling a well this month. The 2,000-meter well will cost $4-5 million. A seismic study of the structure found a closed structure with 6.6 million barrels of good-quality oil, currently worth a gross value of $470 million.

Zion Oil Rights Offering Declared Effective

Globes Newswire October 13, 2009

DALLAS and CAESAREA, Israel, Oct. 13, 2009 (GLOBE NEWSWIRE) — Zion Oil & Gas, Inc. (Nasdaq:ZN – News) announced today that the registration statement for its previously announced common stock rights offering was declared effective by the Securities and Exchange Commission on October 9, 2009. The offering will be open to all holders of record on October 19, 2009 (the “Record Date”).

Under the terms of the rights offering described in the prospectus contained in the registration statement, Zion will distribute to each person who own shares of Zion common stock on the Record Date non-transferable subscription rights to purchase shares of Zion’s common stock. Each shareholder of record on the Record Date will receive 0.23 of a subscription right for each share of common stock owned on the Record Date. This is equivalent to twenty three (23) subscription rights for every one hundred (100) shares of common stock owned on the Record Date. The Company will not distribute any fractional rights; fractional subscription rights will be rounded up to the next largest whole number. Each whole subscription right entitles the holder to purchase one share of common stock at a purchase price of $5.00 per share.

Shareholders who fully exercise their rights will be permitted to subscribe for additional shares of common stock, if available, that were not subscribed for by other rights holders. The subscription rights are non-transferable. The aggregate amount of stock available in the rights offering is 3.6 million shares.

As soon as possible after the Record Date, Zion plans to mail to holders of its common stock (as of the close of business on the Record Date) a prospectus and other items necessary for exercising the rights. Shareholders who hold their shares in a bank or broker name will receive the rights offering material from their bank or broker. The prospectus will contain a description of the rights offering and other information. The subscription rights will be exercisable until the close of business on November 30, 2009, unless Zion elects to terminate the offering prior to the scheduled expiration date by giving two business days notice or unless Zion elects to extend the offering.

Noble Energy Declares Dividend, Stock Upgraded

PRNewswire-FirstCall

HOUSTON, Oct. 27

Noble Energy, Inc.’s (NYSE: NBL) board of directors today declared a quarterly cash dividend of 18 cents per common share payable November 23, 2009 to the shareholders of record on November 9, 2009.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the United States, with significant international operations offshore Israel and West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Visit Noble Energy online at www.nobleenergyinc.com.

Associated Press

10/26/09

Noble upgraded to “Outperform” on increased oil focus, future accelerated production growth

NEW YORK — Shares of oil and gas producer Noble Energy Inc. have been dragged down too far by the plunging value of its natural gas assets as natural gas prices have fallen, said an analyst on Monday as he upgraded the stock.

Noble Energy’s shares are positioned to rise as the company sheds natural gas properties and shifts its investments to crude oil, which has rebounded significantly in price over the course of the year, said RBC Capital Markets analyst Leo Mariani. The move will boost shares of the company, due to better economics, given the recent rebound in oil prices, which outshine lagging natural gas prices.

Mariani said in a research note released before the start of regular trading that Noble’s share price is too-severe a discount for a company that is shifting so much of its operations to oil. He upgraded his rating on Noble’s shares to “Outperform” from “Sector Perform” and raised his price target to $90 from $85.

Mariani expects that 41 percent of Noble’s 2009 production will be based on crude, but should increase to over 60 percent by 2013.

“Noble’s best economics are in deepwater Gulf of Mexico, West Africa and Israel regions, and we expect it to devote most of its capital to these crude-weighted regions.”

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