Givot Olam Oil Exploration LP (TASE:GIVO.L) today announced that the production test in Section 1 of its Meged 5 well near Rosh Ha'Ayin yielded 33 barrels of liquid 1 over eight hours. No accelerants were used. The company is continuing the test, and will report the number of barrels of oil that flowed during the test and their oil/water ratio.
Yesterday, production tests began at the company's Meged 5 well near Rosh Ha'Ayin. Shareholders are now waiting to see if, finally, the well has commercial quantities of oil.
Yesterday, Givot notified the TASE that production test at Section 1, the deepest part of the well, had begun. A video clip of the Meged 5 well on YouTube has had almost 2,000 hits since it went up on Tuesday.
Last week, Givot released a detailed report for the production tests, including the timetable. The tests will be conducted in eight sections of the well over 60-80 days. Givot has promised to issue a detailed report on the number of barrels of oil flowing at each section and the length of time of the flow, but cautioned that no conclusion could be drawn from these figures and implored investors to wait for the conclusion of the tests.
Givot said, "The partnership wishes to reiterate that data of these kinds do not reflect the rate of flow from the well or its viability, which will only be determined after completion of the tests by the experts who will process and analyze the date obtained from each of the tests, which will be disclosed in separate immediate notices."
Givot has apparently learned the lesson of the Zerah Oil And Gas Explorations LP (TASE: ZRAH) at its Tamrur Cliff 4 well. A gas flare from the well caused investors to rush to buy the share, sending it skyrocketing. The share later crashed on disappointing production tests results. Givot is seeking to avoid a similar experience.
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2010
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