Givot Olam’s Meged #5 Produces Oil
May 31, 2010 by admin
May 31, 2010
Givot Olam Oil Exploration LP (TASE:GIVO.L) announced plans to frac (pumping special fluids into the well bore to create enough pressure to crack or fracture a target formation within the well) section 1 of the Meged 5 well near Rosh Ha’Ayin, Israel, in order to stimulate oil production. Company officials stated that the necessary equipment and team were already in Israel, and that it had begun the preliminary activity for the procedure.
On May 27 Givot announced that the production test in Section 1 of its Meged 5 well yielded 33 barrels of liquid over eight hours, without the aid of accelerants.
The previous week Givot released a detailed report for the production tests, including the timetable. The tests will be conducted in eight sections of the well over 60-80 days. Givot has promised to issue a detailed report on the number of barrels of oil flowing at each section and the length of time of the flow, but cautioned that no conclusion could be drawn from these figures and implored investors to wait for the conclusion of the tests.
Givot said, “The partnership wishes to reiterate that data of these kinds do not reflect the rate of flow from the well or its viability, which will only be determined after completion of the tests by the experts who will process and analyze the date obtained from each of the tests, which will be disclosed in separate immediate notices.”
Givot has apparently learned the lesson of the Zerah Oil And Gas Explorations LP (TASE: ZRAH) at its Tamrur Cliff 4 well. A gas flare from the well caused investors to rush to buy the share, sending it skyrocketing. The share later crashed on disappointing production tests results. Givot is seeking to avoid a similar experience.
Excerpted (with editing) from: http://www.globes.co.il/serveen/globes/docview.asp?did=1000563138&fid=1725 and http://www.globes.co.il/serveen/globes/docview.asp?did=1000562385&fid=1725.