Israel Land Development Co. Energy Ltd. (IE), a natural-gas explorer, plans to drill early next month off the country’s Mediterranean coast and has funds needed to complete the testing work, its chief executive officer said.
The Tel Aviv-based company, which holds a 47 percent stake in the offshore Sara and Myra gas prospects, has finished raising the money it needs to drill test wells there, Ohad Marani said in an interview. Israel Land Energy said on May 20 that the Swiss VNG Capital Fund agreed to invest $20 million in exchange for a 9.33 percent share of the company.
“I am very optimistic about starting to drill in the first days of June,” Marani said yesterday. “We believe we have very substantial blocks with huge potential, mainly for natural gas, but also for oil.”
The Sara and Myra prospects may hold 6.5 trillion cubic feet of gas, according to a June 30 report prepared by U.S.- based consultant Netherland, Sewell & Associates, Inc. The Tamar and Leviathan gas deposits discovered off Israel since 2009 together hold an estimated 30 trillion cubic feet, more than triple the U.K.’s remaining reserves. These finds are sufficient to meet Israel’s domestic needs and may enable it to export gas, industry executives and government officials have said.
If drilling is successful, Israel Land Energy will decide later how to transport the gas for sale.
“We will move forward very fast, and we will do very successful well tests,” Marani said. “Then we will deal with exports. In the long-run we will probably sell one-third of our products to the domestic market and export about two-thirds.”
Israel Land Energy said on May 12 that a unit submitted a bid in a Cyprus government tender for exploration and production rights for oil and gas at a site off the island’s coast. The Levant Basin, a triangular slice of the ocean floor between Israel and Cyprus, may hold 122 trillion cubic feet of gas, according to U.S. Geological Survey estimates.
“The Israeli market is a little crowded now, and if we want to expand we need to diversify the risk and operate in several places,” Marani said. “If we win the Cyprus tender, we will need to raise more money through the capital market via a stock issue.”
At the beginning of this year, the company said a unit entered into agreements with Albania’s government for oil and gas rights at three blocks in the Adriatic Sea.
“Natural gas is very important and a real asset, but it’s a little bit more of the same,” he said. “Oil is a real game- breaker, and hopefully we will be the first to find oil, which would be a huge upside.”
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