Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) today announced that the reprocessed results of a 3D seismic survey of the offshore Shimshon license found a relatively small likelihood of commercial success.
The news toppled Isramco's share price on the TASE, as the share fell 7% in morning trading to NIS 0.50, giving a market cap of NIS 5.58 billion.
Isramco said that the Oligocene-Miocene sand strata in the southern part of the prospect "are likely to contain gas similar to other prospects in the Nile Delta where gas has been found." The US consultant who reanalyzed the data estimates gas reserves at Shimshon at 1.5 trillion cubic feet (43 billion cubic meters). For comparison, the Tamar reserves offshore Israel have an estimated 8.6 trillion cubic feet, so Shimshon is 17% the size of Tamar.
However, the consultant estimates the chances of success at Shimshon at 15%. The chances of success at Tamar were estimated at 35%.
The 400-square kilometer Shimshon license is offshore from Ashkelon. Isramco owns 79% of the license, and its affiliates INOC-Dead Sea LP (TASE: HLDS.L) and Naphtha Explorations Ltd. (TASE:NFEX.L), own the rest. Isramco also owns, among other holdings, 28% of Tamar and Dalit.
BG Group plc (NYSE: BRG; LSE: BG) conducted the seismic survey on the Shimshon license in 2001, as part of a survey that also included the Tamar and Dalit licenses. Isramco recently asked for a new analysis of the survey's findings, using more up-to-date technology.
Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2010
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