Zion Oil & Gas Newsletter February 19, 2010
February 26, 2010
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State of Israel Updates Petroleum Rights List
February 26, 2010
Israel’s Ministry of National Infrastructures has updated their list of companies that own oil and gas exploration rights in Israel. If a company isn’t on this list it does not have the right to explore for oil and gas in Israel. The exploration rights list (PetroleumRights170210a-1) and exploration rights map (PetroleumRights15_10_09Geogr.jpg) go together to show rights ownership and the location of the rights territory.
The Israeli Petroleum Law states that “petroleum resources belong to the State.” These State owned resources extend beyond the land itself to include Israel’s territorial waters.
The Law governs all exploration and production of all petroleum products. It provides three types of permits to explore for or produce petroleum in the country. The first “preliminary permit” allows the holder to conduct initial prospecting in the permit area with the exception of drilling. This eighteen month permit also gives the holder the privilege of requesting a “priority right” on the permit area. The priority right prevents awarding the area’s petroleum rights to anyone else during the term of the permit. The second permit stage is a three to four year “exploration license.” This license allows the drilling of test wells in an area of not more than 400,000 dunam (100,000 acres). If and when a prospector discovers oil in economically retrievable quantities under the exploration license he may apply for a “production lease.” The production lease term is thirty years, extendable to fifty years.
Just because a company has been granted an exploration or production license in an area doesn’t mean it is granted physical access to the area. Once issued a permit, license, or lease, the holder must also secure permission from other State agencies and property owners to actually conduct activities in the license area. The holder is also required to submit regular progress reports and final reports to Ministry of Infrastructure. All research, test results, studies and any other information produced through exploration efforts are to be submitted to the Ministry as the property of the state.
The production lease gives the lessee the right to market any petroleum produced, subject to the State of Israel preempting the petroleum for its own use. Israel also collects a 12½% royalty on all petroleum produced. All in all, Israel’s petroleum law effectively allows outside commercial entities (the licensees) to finance the exploration and production of oil in the country. Israel benefits by having access to all the exploration data and 12 ½% of all the oil produced.
Related posts:
- Zion Oil Files for New Rights Offering
- Israel Oil & Gas Exploration Boom Continues
- Zerah and Ginko get Negev gas exploration license
Noble Energy plans $530m investment in Israel
February 26, 2010
The company plans to resume exploration in the Eastern Mediterranean.
Oil and gas exploration company Noble Energy Inc. (NYSE: NBL) will invest $530 million in natural gas exploration in Israel and in development of its current reserves at Yam Tethys and Tamar, said company executives during a conference call on Friday.
During the conference call, which followed the publication of Noble Energy’s financial report for the fourth quarter of 2009, Noble Energy chairman and CEO Chuck Davidson said, “Late in the year, we anticipate resuming exploration in the Eastern Med, looking to build on our tremendous success that we’ve had already there in Israel.”
The reference is to economic zones of Israel and Cyprus, probably at the company’s Leviathan license, west of Tamar. Leviathan is jointly owned by Noble Energy, Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L). Drilling will probably begin after the recently completed 3D seismic study of the strata structure is analyzed.
Noble Energy said that its capital program in 2010 will total $2.5 billion, $1 billion for major projects, most of which will be directed to projects in the Gulf of Mexico, Equatorial Guinea in West Africa, and Tamar.
Noble Energy said that natural gas sales in Israel were 25% lower in 2009 than in 2008. Sales are from the Yam Tethys field offshore from Ashkelon, in which Noble Energy owns 47.1%, with Delek (4.44%) and its subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) (23%) and Delek Drilling LP (TASE: DEDR.L) (25.5%) owning the rest.
Davidson said, “Internationally, we had tremendous exploration success in Israel, with our largest discovery ever at Tamar and subsequent Dalit find. We announced signed letters of content covering $10.5 billion in gross expected revenue, with less a third of resources committed. And we immediately moved forward with the development plans that should lead to the sanction of Tamar this year.”
The Tamar partners today announced that they have signed a third letter of intent for the sale of natural gas to Dimona Silica Industries Ltd. The 17-year contract is worth $500 million. Noble Energy owns 36% of the Tamar prospect, alongside Delek Drilling, Avner Oil, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) subsidiary Dor Alon Energy Exploration Ltd.
Noble Energy attributed the lower than expected natural gas sales in Israel to warmer than normal weather, increased imports of competing Egyptian gas (from East Mediterranean Gas Company (EMG), which began deliveries in early 2009), and because the company’s customer, Israel Electric Corporation (IEC) (TASE: ELEC.B22) had some downtime on one of their power plants.
Investment house Barclays Capital reiterated its “Overweight” rating on Noble Energy stock, and kept its target price for the share at $84. However, it cut its earnings per share estimate as production guidance figures ranged lower than Barclays analysts had expected. They nevertheless maintain that strong future production growth, beginning in 2012, will support the shares.
Related posts:
- Noble Energy Declares Dividend, Stock Upgraded
- Tamar partners to raise large sums for development
- Delek Energy seeks bigger stake in Avner Oil partnership
A Perfect Day
February 24, 2010
“See that you do not look down on one of these little ones. For I tell you that their angels in heaven always see the face of my Father in heaven. “What do you think? If a man owns a hundred sheep, and one of them wanders away, will he not leave the ninety-nine on the [...]Israel Oil & Gas Exploration Boom Continues
February 18, 2010
Ariel Mayor Ron Nachman with John & Dianna Haggee
Israel has natural gas fever, to judge by the line at the National Infrastructure Ministry’s oil board. “Even when they discovered the Heletz field in the south [in 1955] people weren’t lining up here, but this time even leading financial institutions have been backing all kinds of searches,” a member of the ministry’s oil board told TheMarker. The board member, Ron Nahman, who is also mayor of Ariel, said, “We haven’t had this many requests and inquiries in the past nine years. There’s never been interest like this.” Nahman and the other eight board members are responsible for allocating drilling and exploration rights within Israel and off the country’s shores. (Avi Bar-Eli)
The Oil Law advisory council at the Ministry of National Infrastructures met on Monday to review and discuss applications for oil and natural gas exploration licenses and oil production licenses. The council reviewed many applications for oil and natural gas licenses, including oil shales and the transfer of rights.
The council approved six applications:
- A license for Modiin Energy LP for the Yam Hadera prospect.
- A preliminary permit with forward rights for Zerah Oil And Gas Explorations LP and Ginko Oil Exploration LP for the Gulliver offshore prospect.
- A license for Ginko for the land Orly prospect.
- A license for Swiss-based Rig Builders Contracting SA for the land Gurim prospect.
- A license for Dr. Baruch Drin Consultants and Services Ltd. and Griffin Strategic Investments Ltd. for the land Yahel prospect.
- A license for ACC Resources Ltd. for land Shemen prospect (in the Med Ashdod area).
The initial permit is for a maximum of 18 months for an unlimited area, during which preliminary surveys are conducted, including the collation of all current material as well as new material to fill in the information gaps. When the permit period expires, the licensee must apply for a drilling prospect.
A license is for three years, with an option for renewal, and requires drilling a well. An extension is for a maximum of seven years.
If and when commercial quantities oil or gas are discovered, the license is for a maximum of 50 years. The holding will not be granted for more than 30 years in the first stage, and only subject to justifying the reservoir’s potential.
Related posts:
- Zerah and Ginko get Negev gas exploration license
- Bontan Announces Two More Huge Israeli Gas Fields
- Expect Stock Surge in US Oil and Gas Companies Exploring in Israel
Zerah and Ginko get Negev gas exploration license
February 18, 2010
The Orly prospect is north of Arad.
Globes Online: Mira Awwad 16 Feb 10 17:46
The Orly license covers a 102,400 (50,600-acre) area in the southern Judean Desert, above the Dead Sea.
Under the terms of the license, Zerah and Ginko will conduct a 2D seismic survey of the prospect by mid-October 2010, analyze the results and submit a drilling proposal by mid-February 2011. They will begin drilling a 2,000-meter well by mid-October 2011, and submit a report for further operations at the well within four months of the completion of the well.
Last week, Zerah obtained the offshore Gulliver license.
Related posts:
- Zerah teams with Delek to expand Dead Sea oil exploration
- Natural Gas Exploration to begin off the Haifa Coast
- News Short – Zerah Oil Exploration
Zion Oil to Present at the NASDAQ-Oppenheimer Israeli Equities Conference in New York
February 18, 2010
Zion Oil & Gas, Inc. (Nasdaq:ZN) will be participating at the NASDAQ OMX and Oppenheimer 14th Annual Israeli Equities Conference in New York on February 23, 2010.
Richard Rinberg, Zion’s Chief Executive Officer, and Bill Ottaviani, Zion’s President and Chief Operating Officer, are scheduled to present at the conference at 3:05 p.m. EST on February 23, 2010. A copy of the presentation will be made available on Zion’s website after that date.
Zion’s common stock trades on the NASDAQ Global Market under the symbol “ZN” and Zion’s warrants trade under the symbol “ZNWAW”.
Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel, in areas located on-shore between Haifa and Tel Aviv. It currently holds two petroleum exploration licenses, the Joseph and the Asher-Menashe Licenses, between Netanya, in the south, and Haifa, in the north, covering a total of approximately 162,000 acres and the Issachar-Zebulun Permit Area, adjacent to and to the east of Zion’s Asher-Menashe license area, covering approximately 165,000 acres. Zion’s total petroleum exploration rights area is approximately 327,000 acres.
About the 14th Annual Israeli Equities Conference
NASDAQ OMX and Oppenheimer & Co. are pleased to present the upcoming 14th Annual Israeli Equities Conference to be held February 23-24, 2010 at Oppenheimer’s offices at 300 Madison Avenue in New York City.
This conference will bring together over 20 of Israel’s leading companies representing a variety of industries and a range of market capitalization. The format will consist of investor presentations and 1-on-1 and small group meetings. This setting offers both investors and company management intimate discussion on the business environment in Israel and globally.
About Oppenheimer
Oppenheimer & Co. Inc. (“Oppenheimer”) is a leading investment bank and full-service investment firm that provides financial services and advice to high net worth investors, individuals, businesses and institutions. For over 125 years, Oppenheimer has provided investors with the necessary expertise and insight to meet the challenge of achieving their financial goals.
Oppenheimer is a wholly owned subsidiary of Oppenheimer Holdings Inc., an integrated financial services holdings company. Oppenheimer Holdings Inc.’s other wholly owned subsidiaries include Oppenheimer Asset Management Inc., Oppenheimer Life Agencies Ltd., and Oppenheimer Trust Company.
Related posts:
- Zion Oil & Gas Rings the NASDAQ Bell
- Zion Oil Goes to NASDAQ
- Zion Oil CEO Richard Rinberg on NASDAQ CEO Signature Series
Everybody loves the Promised Land but nobody likes the trip
February 15, 2010
“The vision is always a fact. It is the reality that is often a fraud.” (G.K. Chesterton, Orthodoxy) I’ve been to Israel a half dozen times in the last few years. You’d think it would get old after so many visits … it doesn’t. There’s something about Israel, the Promised Land, that’s different from any [...]Brown & Spillman Radio Interview
February 13, 2010
Zion Oil Founder John Brown and Steve Spillman, author of Breaking the Treasure Code: the Hunt for Israel’s Oil will be discussing latest updates in the search for Israel’s oil with Jan Markell on her weekly radio program ‘Understanding the Times’. The show airs live on Saturday, February 13, 10:00 AM CST. Listeners in the greater Minneapolis/St. Paul area can hear the show live, broadcast from radio station KKMS-AM 980. Listeners outside the broadcast area can still catch the show live via internet at www.kkms.com.
For a complete broadcast schedule go to: http://www.olivetreeviews.org/radio/syndication.php.
Related posts:
- Steve Spillman on ‘The Jewish Voice’ Television Program
- John Brown Interviewed on Fox Business
- Zion Oil Founder John Brown on Jewish Voice TV
Zion Oil Update February 12, 2010
February 12, 2010
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