Ofer Nimrodi has sold 7.6% of the rights to the Myra and Sarah offshore licenses, held through Israel Land Development Company Energy LP (TASE: IE) subsidiary Emanuel Energy Ltd., to his partner Modiin Energy LP (TASE:MDIN.L), controlled by Nochi Dankner and Tzahi Sultan, for $30.5 million. The deal reflects a value of $400 million for the two licenses.
Modiin Energy's share of the development costs of the Myra and Sarah licenses will increase by $14 million.
ILD Energy's share in the Myra and Sarah licenses fell from 54.2% to 46.5% and Modiin Energy's share rose from 21.6% to 29.2%. Other shareholders in the licenses are ILD Energy's parent company Israel Land Development Company (TASE: ILDC), with 5%, Modiin Energy shareholder IDB Holding Corp. Ltd. (TASE:IDBH) unit IDB Development Corporation with 5%; Israel Petroleum Company Inc. (IPC), with 13.61%, and GeoGlobal Resources Inc. (AMEX: GGR) unit GGR (India) Ltd., with 4%.
The sales of the rights enables ILD Energy to greatly reduce the expected cost of developing the licenses, including drilling two exploratory wells, which will cost $150-200 million. ILD Energy raised $25 million in its IPO last year, and its share of the wells' cost, following the sale, is $50-75 million.
ILD Energy is continuing to seek Israeli and foreign strategic investors, and it plans to increase its public float by 4% in order to be listed on the Tel Aviv 100 Index.
The Myra and Sarah partners plan to begin drilling the first exploratory well in February 2012, using the Homer Ferrington rig owned by Noble Corporation (NYSE: NC), which is currently drilling an exploratory well at Block 12 in Cypriot waters for Noble Energy Inc. (NYSE: NBL). The Block 12 well is due to be completed in mid-November, and is then due to drill another well, probably at Leviathan, which is jointly owned by Noble Energy, Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L).
ILD Energy's share price rose 4.9% in early trading today to NIS 1.01, giving a market cap of NIS 850 million, and Modiin Energy's share price rose 0.8% to NIS 0.394, giving a market cap of NIS 751 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011