Welcome to ‘Isroil’?

April 8, 2010 by · 1 Comment 

Welcome to Isroil
US expert Fred Zeidman sees big names joining an oil (and gas) rush in Israel.
Ron Steinblatt 7 Apr 10 16:21

The oil and gas exploration scene in Israel, a year after the “Tamar” and “Dalit” discoveries in the Mediterranean, is making the likes of Nochi Dankner’s IDB group and Ofer Nimrodi’s Israel Land Development enter the sector.

But according to Fred Zeidman, a US energy industry expert, and Adam Meislik, who has advised oil and gas companies on investment for ten years, it is highly likely that in the future we will hear about far bigger names, as more international companies, in addition to Noble Energy (the partner in the discoveries with Delek and Isramco), join the exploration efforts on Israeli territory.

“It happens all the time,” says Zeidman, “We see in the US that the moment a company discovers oil or gas that can be transported, there’s a crazy rush to the region by other companies, and that’s a function of the size of the reserves found. Around the world, as soon as Noble goes to a place, many other companies follow in its wake. The prospects here are amazing, and I have no doubt that we’ll see an economic boom, and a rush of more companies to Israel from overseas following Noble.”

Is there no concern at the political problems in the region?

“It’s true that there are political risks here, but we’ve seen it happen in much more hostile places. In Israel, there isn’t the risk that there is in Africa, and so the security issue isn’t too serious.”

Zeidman points to another economic sector that will benefit from the boom in the industry. “The field of services to energy companies will also develop. Beyond the daily needs, such as accommodation and food for the workers, the big companies need local help. For example, Schlumberger (the world’s largest exploration and drilling services company, R.S.), works with many small outfits around the world that help it with logistics and transporting equipment, which leaves a lot of room for enterprise”

Zeidman pins great hopes on Israeli enterprise, and thinks that the discovery of the gas reserves will even contribute to the global energy industry. “As long as oil prices were low, the industry was dormant. As soon as oil prices rose above $100 a barrel, the industry became interesting, and young people came in using new technologies that the veteran professionals didn’t use,” he says.

With the unconcealed pride of a Jewish-American, Zeidman says, “The State of Israel, which is considered a pioneer in science, can bring creativity to this field of oil exploration. This is an industry with a great deal of technology, and considering the Israeli mentality, we’ll see big results and new inventions, and thanks to the new technology there will be fewer dry drillings.”

According to Zeidman, the main problem in Israel is a small and limited consumer base, and so besides the option of exporting, additional uses for gas will be sought. He thinks it not inconceivable that in the future we will see vehicle projects that could damage Shai Agassi’s electric car dream.

The partners in the Tamar well have so far approached foreign investment banks in order to obtain assistance in financing the construction of a production infrastructure, reckoned to cost nearly $3 billion. Meislik thinks that assessing the risks of financing the projects is not very difficult, and that the local banks can also participate. “It’s something that can be learned,” Meislik says. “The US and Canadian banks have no problem in coming to Israel and lending money to the projects, but the Israel banks should train teams overseas, that will learn how gas projects are financed and bring that knowledge to Israel.”

Published by Globes [online], Israel business news – www.globes-online.com – on April 7, 2010

Offshore Gas Field is a ‘Monster’

March 9, 2010 by · 1 Comment 

Noble Energy chairman and CEO Charles Davidson expressed optimism that there will be more gas fields discovered at a press conference in Tel Aviv today.

He said, “We conducted a 3D seismic survey, which will provide very sophisticated information enabling us to know whether there are more reservoirs. We believe that there are other reserves adjacent to the Tamar and Dalit reservoirs. We’re now analyzing the results of the seismic survey. I hope that we’ll continue to find natural gas in this country. I’m optimistic about more reservoirs, whether at Leviathan or elsewhere.”

Davidson added, “Israel was the land of milk and honey in Biblical times, but in the modern era, its milk and honey and natural gas. In Israel’s deep waters, in virgin territory, a monster natural gas discovery has been made.”

Noble Energy Inc. (NYSE: NBL) is a partner in the Tamar and Dalit offshore gas fields, together with Delek Group Ltd. (TASE: DLEKG) subsidiaries Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd. It is also a partner with Delek Group in the Yam Tethys partnership, which owns a natural gas field offshore from Ashkelon, and in the Leviathan prospect, west of Tamar, with Delek Group Ratio Oil Exploration (1992) LP (TASE:RATI.L).

Noble Energy convened the press conference at the Tel Aviv Hilton not only to wax poetic about biblical Israel, but to outline its program to develop its natural gas reserves in Israel. Investors are eager for any scrap of information about the Leviathan lease, where 3D seismic survey is underway, whose results are due later this month. If gas is found, the prospect’s partners will begin drilling toward the end of the year, at an estimated cost of $100 million.

Davidson said, “The company expects to drill into another large structure during the second half of the year, and to drill in the two discoveries already made during 2011.”

The statement reiterates what Noble Energy said in the conference call following the publication of its financial report for 2009 last month, without explicitly mentioning “Leviathan”. “As for Tamar, the immediate challenge is to reach an agreement with the government on how to bring the gas to shore, since seafront real estate in Israel is very expensive. One possibility is to build a new terminal, another is to use Yam Tethys’ existing infrastructure,” Davidson said.

Davidson promised that the company would meet its timetable for the Tamar well. The well’s partners are due to publish their development plan for the reservoir in the second half of the year. The plan will reportedly cost more than $2.6 billion, with gas production beginning in early 2012.

“We’ve been here for over ten years already,” said Davidson. “Noble Energy won’t be here for years, but for decades. I can’t imagine a better place to be than here.”

Noble Energy will invest $140 million in gas exploration in Israel in 2010, almost 10% of its budget.

Shares of Israeli gas and oil exploration partnerships on the Tel Aviv Stock Exchange (TASE) have skyrocketed by hundreds and even thousands of percent in the past year, as investors seek the next Isramco. Davidson, however, sends a clear message to investors: Be careful. “Oil and gas exploration shares were hyped last year, and I urge caution,” he said. “There is no sure thing in the energy industry, and in the end, only a few companies will succeed. There’s an upside potential in the shares of Noble Energy. I’m a long-distance runner, and I don’t comment about the market’s response over the next week or two. We’re managing projects that will last us decades. In this business, you don’t plan for days, but for the long haul.”

Published by Globes [online], Israel business news – www.globes-online.com

Langotsky Suing For His Share

January 22, 2010 by · Leave a Comment 

Yossi

Last month we reported on Yossi Langotsky, “Israel’s Unlucky Oil Man”. Yossi has been part of Israel’s search for oil for fifty years. He played an integral role in last year’s natural gas discovery off the coast of Haifa; so much so that the two gas fields were named after his  daughter ‘Dalit’ and his granddaughter ‘Tamar’. But Yossi wasn’t a part of the planned profits from his discovery. The reason is that his financial partner, Benny Steinmetz, pulled the plug on their involvement two months before drilling began.

Now Yossi wants what he believes is his. Israeli newspaper Haaretz reported today:

“Geologist Joseph Langotsky is on a crusade to reclaim his rights in the Tamar and Dalit gas field exploration, which he himself initiated.

Langotsky will shortly be suing his former partner, mining tycoon Benny Steinmetz, over the loss of his rights to the Tamar and Dalit fields, where large reserves of natural gas were discovered last year. The fields are named for Langotsky’s daughter, Dalit, and granddaughter, Tamar.

Langotsky and Steinmetz had been the owners of a limited partnership, STX, which had a 5% stake in the exploration rights. But Steinmetz dropped out of the exploration partnership two months before drilling began and Langotsky, who was unable to find an investor to replace him in time, lost his rights.

Langotsky is believed to be seeking compensation equal to 1% of the project’s value – $60 million, based on the project’s assessed value of $6 billion.” (read more …)

Tamar partners to raise large sums for development

September 3, 2009 by · 2 Comments 

Noble Energy will buy $230 million worth of equipment and services.
Ron Steinblatt1 Sep 09 18:02

Dalit RigThe partners in the Tamar and Dalit offshore natural gas fields are preparing to raise capital to develop Israel’s largest natural gas field. Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Energy Systems Ltd. (TASE: DEOL) has published a shelf prospectus to raise hundreds of millions of shekels in the coming weeks and is currently working on the structure of the offering.

Delek Energy controls Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), which each own 15.625% of the Tamar and Dalit prospects. Last week, both companies, authorized Noble Energy Inc. (NYSE: NBL), which owns 36% of the prospect, to buy $230 million worth of equipment and services by 2011 to develop the gas fields. Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which owns 28.75% of the prospect approved purchases of up to $160 million.

The partners in the Tamar and Dalit offshore natural gas fields are preparing to raise capital to develop Israel’s largest natural gas field. Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Energy Systems Ltd. (TASE: DEOL) has published a shelf prospectus to raise hundreds of millions of shekels in the coming weeks and is currently working on the structure of the offering.

Delek Energy controls Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), which each own 15.625% of the Tamar and Dalit prospects. Last week, both companies, authorized Noble Energy Inc. (NYSE: NBL), which owns 36% of the prospect, to buy $230 million worth of equipment and services by 2011 to develop the gas fields. Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which owns 28.75% of the prospect approved purchases of up to $160 million.

Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Gas Exploration LP, which owns 4% of Tamar and Dalit, is also getting ready to raise capital. Dor Alon plans to split its holding in the prospects from its gas stations and convenience stores business, and create a partnership that will hold the Tamar stake. Dor Alon is working with the Israel Tax Authority on this new structure, which will make it possible for the new partnership to raise capital directly to develop the gas fields.

Dor Alon is meeting with institutional investors to hold a bond issue of up to NIS 250 million for this purpose.

Published by Globes [online], Israel business news – www.globes-online.com – on September 1, 2009

Haifa Gas Discovery Bumped to 5 Trillion Cubic Feet

February 10, 2009 by · 4 Comments 

News of last month’s natural gas discovery off the coast of Haifa just keeps getting better. Noble Energy announced today, that after flow testing of the Tamar well, they’ve increased potential natural gas production in the Tamar from 3.1 trillion cubic feet, originally estimated, to 5 trillion cubic feet. That’s a production rate of 30 – 150 million cubic feet per day!
Noble has already decided to keep the Atwood Hunter offshore drilling rig for two additional wells.
 
Noble Energy’s latest announcement is below:
 
HOUSTON, Feb. 10 /PRNewswire-FirstCall/ — Noble Energy, Inc. (NYSE: NBL) announced today flow test results from the Tamar natural gas discovery in the Matan license, offshore Israel. As previously reported, the Tamar #1 well, located in approximately 5,500 feet of water and drilled to a total depth of 16,076 feet, encountered more than 460 feet of net pay in three high-quality reservoirs. Testing procedures, which were performed over a limited 59-foot section of the lowest reservoir, yielded a flow rate of 30 million cubic feet per day (Mmcf/d) of natural gas. The flow rate was limited by testing equipment available on the rig. Performance modeling indicates the well can be ultimately completed to achieve a production rate of over 150 Mmcf/d.

The pre-drill gross mean resource potential for Tamar was originally estimated at 3.1 trillion cubic feet (Tcf) of natural gas. Immediately following discovery, we estimated the gross resource potential to be at least equal to the pre-drill mean estimate. After analysis of all the post-drill and production test data, the estimated gross mean resource potential of Tamar has now been increased to 5 Tcf.

The Company and its partners have elected to keep the Atwood Hunter, a semi-submersible drilling rig, offshore Israel for two additional wells. Subsequent to operations at the Tamar #1 well, the drilling rig will proceed to the Dalit exploration prospect in the Michal license. Dalit has a pre-drill gross mean resource of about 700 billion cubic feet of natural gas with an approximate 40 percent chance of success. Located in 4,500 feet of water and 28 miles offshore, the well has a proposed total depth of about 12,500 feet. Immediately after concluding operations at Dalit, the rig will be relocated to Tamar where it will drill an appraisal well to further define the resources of the structure.

Charles D. Davidson, Noble Energy’s Chairman, President and CEO, said, “The test results from the Tamar well confirm our initial analysis that the discovered reservoirs are very high quality. This discovery is clearly of a size for commercial development. We hope to extend the success in Israel by testing Dalit, our second prospect which is already covered by 3D. Discussions with our various partners are currently ongoing with plans to potentially conduct new seismic over our additional leads on other licenses in the area. Each incremental piece of information gathered is critically important as we continue to learn more about the potential of the Tamar discovery and this highly under-explored region. The implications of this discovery to Israel, Noble Energy, and our partners cannot be overstated, and we all have committed significant resources to better understand its scale and scope.”

Noble Energy operates both the Matan and Michal licenses with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent and Dor Gas Exploration with the remaining four percent.

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 key international operations offshore Israel, UK 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.