Leviathan partners drop on TASE as Noble suspends drilling

Noble Energy announced on Friday that it had suspended operations at the Leviathan 1 exploratory well.

By HILLEL KOREN, GLOBES STAFF
April 3, 2011 23:03
2 minute read.
Offshore Leviathan gas field.

leviathan gas drill. (photo credit: (Albatross))

 
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The partners in the Leviathan drilling project showed lower prices for their Tel Aviv Stock Exchange-listed securities on Sunday, as trading resumed after being halted on Sunday morning following Noble Energy’s announcement on Friday that it had suspended drilling operations at the Leviathan 1 exploratory well.

The Israeli partners did not report the announcement to the TASE until around 10:30 a.m. on Sunday, and trading in their securities was suspended.

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After resumption of trading, Ratio Oil Exploration dropped by the end of the day to its lowest point in almost two months, decreasing 8.6 percent to NIS 0.519. Delek Drilling-LP declined 2.5% to NIS 13.42 and Avner Oil Exploration-LP retreated 2.8% to NIS 2.41.

Noble Energy said on Friday that it had suspended drilling in the Leviathan natural-gas field to replace a worn wellbore casing, which requires additional material and equipment necessary to complete the drilling of the well. It added that it is working to secure the needed items, which are not available in Israel. Noble Energy is therefore preparing to move the Sedco Express rig to the Tamar field, where development drilling is anticipated to begin in about one week.

Noble is drilling the Leviathan 1 well to determine whether two rock formations about 2,000 meters (6,500 feet) below the initial discovery hold oil or gas, spokesman David Larson said on April 1.

Geologists have put the odds of commercial discovery at 17% for one formation and 8% for the other, he said. It is not clear when drilling at the Leviathan 1 well will resume, or if the suspension of drilling will affect the timetable for announcing preliminary results about the presence of oil in the second target strata (the first strata which contains oil), at a depth of 5,800 meters, which are due in May.

Sources involved with the drilling told Globes on Friday that the necessary parts may not arrive in Israel for several weeks.



Noble Energy owns 39.66% of Leviathan licenses, Delek Group units Avner Oil and Delek Drilling each own 22.67% and Ratio Oil Exploration owns 15%.

Delek and Noble Energy are also partners in Tamar.

Meanwhile, Modiin Energy LP and Israel Land Development Company Energy Ltd. have signed a letter of intent with an offshore drilling rig operator, who is a leading player in the field, and are in negotiations on a final contract to drill at the Myra and Sarah licenses.

The companies said that Petroleum Supervisor Dr.

Yaakov Mimran notified them that, in view of these negotiations, the deadline to sign a contract with the drilling contractor has been postponed until April 30. The companies expect to begin drilling the first exploratory well in December 2011.

ILDC Energy CEO Ohad Marani said, “The company is making progress in accordance with its plans to begin exploratory drilling at the Sarah and Myra licenses by the end of 2011.”

Modiin Energy’s share price fell 2% in early trading to NIS 0.048, giving a market cap of NIS 824 million, and ILDC Energy's share price fell 1.1% to NIS 0.775, giving a market cap of NIS 641 million.

Bloomberg contributed to this report.

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