After its success in drilling for oil in Vietnam, Delek Energy Systems Ltd. (TASE: DEOL), part of the Delek Group Ltd. (TASE: DLEKG) controlled by Yitzhak Tshuva, announced today that its subsidiary Matra Petroleum (AIM: MTA) had found oil in a drilling in Orenburg in Russia. The company said that an economic assessment of the drilling based on the price of oil for internal use within Russia, which is $58 a barrel, indicates that it is worth $172 million.
The $58 price was used as a basis because the cot of transporting oil out of Russia is high, and sometimes not worthwhile. Nevertheless, given current international oil prices, it seems likely that the oil will be exported.
A survey that Matra carried out at the beginning of the year found that the deposit holds some 13.7 million barrels of oil. A further drilling at the site is expected to provide a more accurate picture of the deposit's size. Under the terms of the drilling license, Matra must carry out the drilling by August 2009.
The daily rate of oil production at the drilling is currently 250-320 barrels. Production is projected to reach a maximum of 8,500 barrels a day in 2012.
Matra operates in Russia and Hungary via two subsidiaries. Delek Energy is the largest shareholder in Matra, with a 29.9% stake.
Published by Globes [online], Israel business news - www.globes.co.il - on July 2, 2008
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