Representatives of Israel Financial Levers Ltd. (TASE:LVR) told investors yesterday that the two structures of the Shemen block potentially have 270 million barrels of oil and 4.5 trillion feet of natural gas (almost half the gas at the Tamar gas field).
The Shemen license (formerly Med-Ashdod), offshore from Ashdod, is owned by Chaim Lebovits's ACC International Holdings Ltd., Financial Levers, and Financial Levers' controlling shareholders Jackie Ben-Zaken and Abraham Nanikashvilli. The companies are trying to raise hundreds of millions of shekels to finance a well.
"When you want to go public, every number wins," a top capital market source told "Globes", referring cynically to the numbers "bandied about", in order to "tempt" investors to participate in the offering. Although Financial Levers mentioned the mean oil resources in the Shemen block, it did not mention the actual potential for oil production.
The 400-dunam (100-acre) Shemen block is located in shallow water 16 kilometers west of Ashdod. Two previous exploratory wells into the structure found oil, but since two seismic surveys of the structure in 1994 and 1997, no activity has taken place. In the two decades since the exploratory well, which encountered technical problems, engineering capabilities now exists to carry out the drilling.
A new exploratory well at Shemen will reportedly be made by a jack-up rig, which is suitable for shallow water. Financial Levers estimates the cost of the well at $60-70 million, but if the licensees decide to drill more than one well, the exploration costs could rise by tens of millions of dollars. The drilling is scheduled to begin in early 2012.
Published by Globes [online], Israel business news - www.globes-online.com - on February 17, 2011
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