The Yam 3 reservoir off the coast of Ashdod is showing significant signs of a hydrocarbon presence – likely containing considerable amounts of natural gas, condensate and possibly light oil, Shemen Oil and Gas Exploration announced on Monday.

Shemen made the announcement after receiving the results of exploratory drilling works conducted by Caspian Drilling at Yam 3, located within the Shemen/387 license area, about 16 km. west of Ashdod.

While drilling within the target layers is still ongoing, a preliminary analysis gathered during drilling thus far has indicated that the uppermost of these layers – with a thickness of about 90 meters – may contain a significant presence of natural gas, condensate and also perhaps light oil, according to Shemen.

The $138 million drilling process began in December, occurring on the Atwood Beacon ocean rig that has operated in both India and South America previously. A Netherland, Sewell and Associates (NSAI) study commissioned by the company estimates that there are 120 million barrels of oil, a quantity that industry veteran and Shemen CEO Yossi Levy has estimated could net $20 billion to $24b.

Chairing the company is former IDF chief of staff Gabi Ashkenazi, who in July stressed the economic and strategic importance of creating an “energy independent” Israel, during a tour of the rig.

While Shemen is the largest stakeholder in the reservoir – holding 77.6904% – the other partners include Zerah Oil and Gas Exploration (7.5%), Caspian Drilling (10%) and Zmicha Investment House (4.8096%).

After penetrating the target prospect layers at a depth of 5,175 meters, the explorers drilled down to a total depth of about 5,510 m., the company said. The drilling operator performed electrical measurements while drilling, that calculated the resistivity and logged low gamma ray values, both of which indicate to experts the existence of hydrocarbons in the targeted layers, a report from Shemen explained.

Because drilling is still ongoing and only initial indications have been accumulated, it is still impossible at this point to determine the size and quality of the reservoir, the company acknowledged. Drilling should be complete within the next few days, after which full electrical tests will occur. Only after these analyses are complete will the license partners be able to make a decision on whether to proceed with production tests, the report from Shemen said.

Niv Elis contributed to this report.

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