As the Yam Tethys natural gas reservoir, Israel's sole reservoir, is becoming depleted, Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) today announced approval of the development plan for the Pinnacle 1 exploration well. In late March, the companies announced the presence of small satellite reserves near the Mari B well.
Avner and Delek Drilling and Noble Energy Inc. (NYSE: NBL) will develop the Pinnacle 1 well and begin gas deliveries from it in July 2012. This should help Israel's energy market get through the summer, which will reportedly be accompanied by electricity price hikes and/or initiated blackouts due to problems in the electricity supply during peak demand.
Avner and Delek Drilling said that Noble Energy updated them that the drilling work and the production well would completed be within days. After completion, the ENSCO 5600 rig will go to third parties.
The aim of the Pinnacle 1 well, as mentioned, is bridge the gas shortage in Israel until the Tamar discovery comes on line in 2013. According to Netherland Sewell & Associates Ltd. (NSAI), the Pinnacle reserve has 1.3 billion cubic meters of gas.
Avner's share price fell 0.1% by midday to NIS 2.56, giving a market cap of NIS 8.5 billion, but Delek Drilling's share price rose 0.7% to NIS 14.27, giving a market cap of NIS 7.8 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on April 16, 2012
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