"The quantities of gas measured in the mud of the Meged 5 well is ten times the amount in all other wells in the Meged field," Givot Olam Oil Exploration LP (TASE:GIVO.L) announced today in a presentation ahead of Tuesday's partners meeting. At the meeting, the general partner will try to get the investors' approval to issue NIS 25 million worth of partnership units and options.
Givot did not disclose the actual quantity of gas measured in the well, or its significance for the quantity of oil at the site, which will only be known when the production tests are completed.
Givot's general partner added that the drilling cost of the Meged 5 well is $12.6 million, more than the $7.7 million originally planned. The general partner attributed the higher cost to "two serious breakdowns during the drilling and adjustments to the drilling plan".
The presentation added that the Meged 5 has reached the Upper Mohila strata at a depth of 3,879 meters, and that the well is due to reach a depth of 3,950 meters. The partnership estimates the cost of the production tests at $6 - 7.5 million and they will last for two more months. The partnership has just $3.7 million in cash left, hence the need to raise more capital.
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2010
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