Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG) subsidiaries Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L), together with Zerah Oil And Gas Explorations LP (TASE: ZRAH) will begin drilling at the "Tzuk Tamrur 4" site that they jointly own at the Dead Sea, beginning in October. The drilling was made possible after the companies reached an agreement with the Society for the Protection of Nature in Israel to protect areas of the Judean Desert Nature Reserve adjacent to the drill site and invest $500,000 to prevent damage to it.
Lapidoth Israel Oil Prospectors Corporation Ltd. (TASE: LAPD) will carry out the drilling at a cost of $4-5 million. The Tzuk Tamrur 4 well is slated to reach a depth of 2,000 meters.
Zerah owns half of the Zerah/321 license, and Delek Group's units Delek Drilling and Avner Oil each own 25%. The license covers a 400-square kilometer area on the northern shore of the Dead Sea. Seismic surveys indicate that the area has a closed structure with a reserve of 6.6 million barrels of high-quality oil. At the current price of crude oil of $71 per barrel, the value of the reserve is about $470 million. The value of the reserve will depend on the amount of recoverable oil and the price of crude at the time of production.
In the past few weeks Delek and Zerah carried out engineering work for the drilling in order to protect the Judean Desert Nature Reserve, including the building of a water pool outside the reserve and laying a six-kilometer pipeline from the pool to the drill site to provide the water needed for the drilling.
In mid-July, the Tel Aviv Stock Exchange (TASE) management removed Zerah from the restricted list, and continuous trading in the company's share and warrants resumed. The share rose 1.7% in morning trading today to NIS 0.12, giving a market cap of NIS 52.6 million. The share has risen 713% since the beginning of the year.
Delek Drilling's share rose 1.5% in morning trading today to NIS 5.73, and Avner Oil's share rose 2.4% to NIS 0.97.
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2009
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