Gas and oil exploration partnership Lapidoth Heletz LP. (TASE: LPHL) today confirmed a "Globes" report on Tuesday that it was bidding on the Med-Ashdod well.
The Med Ashdod oil well is located 16 kilometers offshore from Ashdod. Lapidoth Heletz is teaming up in the bid with Modiin Energy LP (TASE:MDIN.L) and a third company, whose name has not been disclosed.
The share jumped 30% at the opening, but fell back to a gain of 16.3% by early afternoon to NIS 0.25, giving a market cap of NIS 250 million. The share soared 66.7% jump yesterday and 67.5% the day before. Modiin Energy's share rose 45% at the opening today, but fell back to a gain of 9.1% to NIS 0.036, giving a market cap of NIS 80 million. The share rose 17.9% yesterday and 7.7% the day before.
The Med Ashdod well aims to reach a depth of over 4,500 meters beneath the seabed, the same depth as the Tamar well offshore from Hadera. However, the water offshore from Ashdod is relatively shallow and the rock strata are thicker. This will prolong the drilling time, and raise costs. The Ministry of National Infrastructures estimates deep water drilling costs at $100 million (the Tamar well cost $140 million). If however, commercial quantities of oil are discovered at Med Ashdod, the development costs will be less than at Tamar, because of Med Ashdod's proximity to the coast.
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2010
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