Today's announcement by Delek Drilling Limited Partnership (TASE: DEDR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Noble Energy Inc. (NYSE: NBL) about Israel's largest ever natural gas discovery at the Tamar prospect offshore from Haifa, has set capital market analysts abuzz.
Clal Finance Batucha analyst Gal Reiter raised his recommendation for Delek Drilling's parent, Delek Group Ltd. (TASE: DLEKG), to "Outperform" from "Market perform". He said, "The net average value (NAV) of Delek Group is NIS 292 per share, compared with the market price of NIS 180." He added, "The potential added value from the Tamar prospect is NIS 90 per share, or a loss of NIS 50 per share."
Delek Group's share rose 52% by mid-afternoon to NIS 273, and Delek Drilling's share rose 43% to NIS 3.17.
Reiter added that the next step at the Tamar 1 well is production tests, which will cost $20 million, and should take about three weeks.
Leader Capital Markets analyst Yoav Burgan said, "Preliminary indications show substantial natural gas reserves at the well, which amount to at least early predictions from before the drilling. We believe that it's possible to see some indication of long-term potential deals at Tamar in view of the current global low price for natural gas. We're potentially talking about $15.5 billion altogether."
Burgan reiterated its "Buy" recommendation for Delek Group at a target price of NIS 300.
Published by Globes [online], Israel business news - www.globes-online.com - on January 18, 2009
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