Givot Olam Meets with Investors

Haaretz August 24, 2010

Givot Olam at investors assembly: Meged-5 is like granting of Torah

Fossil fuel company attempts to allay investor uncertainty with confident claims of oil abundance.

The people at Givot Olam Oil Exploration presumably were tired of being excoriated by investors and the press over the opacity of their announcements, and called a shareholders assembly on the premise of explaining their results at the Meged-5 drill.

Hundreds of investors convened yesterday at the International Convention Center in Jerusalem to hear Tuvia Luskin, the partnership’s geologist, expand on the topic. At the entrance to the building, investors were greeted with a modest holiday present: a jar of the crude oil extracted from the site, and a matching jar of honey.

Luskin and the members of the board of directors were accompanied by legal counsel Arik Harari, whose function was to supervise Luskin, given his penchant for making “forward-looking statements.”

The geologist began the meeting by reviewing the company’s results (in English ), and compared the Meged-5 exploration to the Israelites’ exodus from Egypt.

“For years we were in the dark, with ‘signs of oil’ but no light,” he said. “Meged 5 is like the granting of Torah for us. It’s a revelation.”

Luskin called for patience, however: It will take years to produce the oil, he said.

Production tests at Meged-5, a field by Rosh Ha’ayin, were held at 8 segments, at the end of which Givot stated that it had produced 480 barrels of oil, which disappointed investors relative to expectations.

Last week the partnership’s participation units soared after it stated that the estimated potential of Meged-5 was 1.53 billion barrels. On September 15, the partnership is scheduled to receive a final report from its consultants, detailing how much the segments 1 to 6 are likely to produce, he said.

Luskin counseled shareholders to differentiate between “static oil” found on the site and extractable oil, which isn’t the same thing, he said.

He expanded on how many barrels each segment is believed to contain, and qualified that the estimates would change as testing proceeds. Only after all that will be it possible to begin estimating how much the field could be worth, the geologist said.

One shareholder commented that based on Luskin’s statements, Meged-5 should be able to produce more than 2,000 barrels of oil a day. “Is that really the number?” he inquired. Luskin responded, “You have no patience.”

That said, he himself told the shareholders, “The press tells you that this is just another Heletz [a field in southern Israel that has been eking out miserly amounts of oil since the 1950s.] Pay no attention to them,” Luskin urged. “We have a lot more wells to drill and a lot more oil to produce. We have a lot more to do,” to which Nogah Ben David, director and Jerusalemite businessman, added, “With the help of God.”

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