Givot's Meged 5 well report disappoints

Givot Olam Oil Exploration Limited Partnership (TASE:GIVO.L) today published its final engineering report regarding potential production at the Meged 5 oil well near Rosh Ha'ayin.

On an initial reading the report finds that Givot cannot estimate the quantity of oil in the well. However, the most optimistic assessment talks about 13.2 million barrells of oil, which would be a disappointment, well below the original forecast of 150-300 million barrels. The pessimistic assessment is just 2.4 million barrels of oil.

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Moreover, the report cites fears that gas trapped in the well may make it not viable to extract oil from the well.

The report itself covers 12 pages and the Israel Securities Authority gave Givot permission to publish the report this afternoon three days after it suspended trading in the company's shares.

Data about section 6-1 is not in the report and Givot says that the assessment models have to be run again before this data can be prepared. This will not be available until early November.

Published by Globes, Israel business news - www.globes-online.com - on September 21, 2010