The well, due to begin drilling in the second quarter, is targeting oil-bearing strata at a depth of 3,300 meters.
The Southern Regional Planning and Building Commission has approved the drilling of the Shahar 1 well, scheduled to begin in the second quarter of 2010. The well will drill to deep oil-bearing target strata.
Ginko Oil Exploration LP, which fully owns the license, has two positive opinions about the amount about the amount of oil in the license area: one by Dr. Haim Fliegelman, who estimates 260 million barrels of oil, and a second by UK consultancy firm Simco Petroleum (Management) Ltd., which estimates 9-138 million barrels of oil in the target strata.
At the current price of oil of $90 per barrel, the high-end estimate of 260 million barrels of oil is worth $23.4 billion, and the mid-range estimate of 41 million barrels of oil is worth $3.69 billion. Either way, the field has huge potential.
The Shahar license covers 389,000 dunam (97,250 acres) south of the Arava junction at the southern end of the Dead Sea valley. The Shahar 1 well will drill to 3,300 meters at a cost of $9 million. Lapidoth Israel Oil Prospectors Corporation Ltd. (TASE: LAPD) will probably be the well contractor.
Ginko, which owns the Shahar license, is in the final stages of merging with stock market shell Simcha Urieli & Sons Engineering & Construction Co, Ltd. (TASE: UREL), after Urieli’s shareholders approved the merger agreement last week.