Bontan has closed its previously announced non brokered private placement financing, pursuant to which it has issued 37,750,000 Units at a price of US $0.20 per Unit to raise aggregate gross proceeds of US $7,550,000. Each Unit consists of one common share of the Company and one five-year term purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at an exercise price of $0.35 per share. There is a call provision should the closing price of the Company’s common shares exceed US $1.00 for 20 consecutive business days. All securities issued in the financing are subject to a statutory hold period.
Certain proceeds from the offering have been used with respect to the Company’s 11% net working interest in the two drilling licenses in offshore Israel: Sarah and Myra. The Company’s ownership of theses licenses is held through its 76.8% owned subsidiary: Israel Petroleum.
The Company reported that all seismic data relating to the two licenses have now been fully acquired from Western Geco International Ltd, a Schlumberger group company, who were paid the balance of their fees of US$ 10.5 million. All of the seismic data is now being processed.
Bontan also reported that it is preparing an application to list on the Canadian National Stock Exchange. The CNSX is an innovative new stock exchange for trading the securities of public companies. The Company must meet all requirements of the Exchange prior to any approval.
Kam Shah, CEO of Bontan, commented, “We are very pleased with the progress our Company has made over the last seven months. We have met all of our financial obligations in relation to the offshore Israeli project and look forward to further developmental activities in both the Sarah and Myra licenses. We have received tremendous support from our existing shareholders as well as from new sophisticated investors who participated in our recent private placement. The recent reports from the US Geological Survey indicating that there are some 1.7 Billion barrels of recoverable oil and 122 Trillion cubic feet of gas in the 83000 square kilometer Levant Basin Province augurs well for our project. In addition the fact that the offshore area has also recently attracted the attention of various energy giants including Gazprom, bodes extremely well for our project. Identifying an international driller and operator will enable us and our joint venture partners to proceed with the plans to drill in both the licenses. It should be a very exciting year ahead for our company.
About the Project Area
The Offshore Israel Project comprises two Licenses – Sarah and Myra – covering approximately 310 square miles and is located in the Levantine Basin near the recent 6.3 TCF Tamar 1, Tamar 2, and the Dalit natural gas discoveries by Noble Energy Inc.
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.”