Givot Olam Oil Exploration LP (TASE:GIVO.L) today notified the Tel Aviv Stock Exchange (TASE) about the operations planned for completing the production tests in the remaining sections of the Meged 5 oil well and to bring the well to long-term production tests and further development wells by 2012.
Givot said that it plans to complete the production tests at Meged 5 by August 2011, and assuming that they are positive, to begin commercial production in November 2011. After raising more capital, the partnership will drill more development wells, initially two, six months apart, by the end of 2012.
The partnership disclosed timetables, the sequence of operations, and their estimated budgets.
Givot's general partner said that most of the upcoming operations depend on third parties and contracts that have not yet been signed. The timetable and budgets are therefore the partnership's own estimates.
Givot's Ministry of Defense permit is due to expire at the end of November 2010, and the partnership plans to schedule meetings with ministry officials within a few days. Another important milestone will be to frac sections 2 through 6 of Meged 5, which the partnership believes will begin in December at an estimated cost of $1.5 million. Production tests of the well's sections 7 and 8 are also scheduled for December, at an estimated cost of $2 million.
Poalim Sahar analyst Yoav Burgan told "Globes" today, "I don’t see anything negative in Givot's report. On the contrary, we definitely see an improvement or real effort to disclose the partnership's activity through detailed and full reports on all activity expected, including timetables, which appear to be reachable.
Givot's share price fell 10.8% by midday to NIS 0.074, giving a market cap of NIS 767 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 20, 2010
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