A gas platform seen from Israel's coast.
A gas platform seen from Israel's coast. Photo by Yaron Kaminsky
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The Shimshon offshore gas field has the potential for about 15.6 billion cubic meters of natural gas, less than a quarter of the preliminary estimates made in July, before drilling commenced, the partners said Tuesday.

According to an evaluation prepared by Texas-based consultants Netherland, Sewell & Associates, 15.6 BCM is the best estimate of gross contingent resources for the field, located off the Mediterranean coast. The low estimate is 8.4 BCM, while the high estimate is 27.6 BCM.

Shimshon was previously thought to contain 65 BCM.

Market sources told TheMarker that the revised estimate likely lowers the value of the field by about NIS 1 billion, which would bring it down to NIS 250 million. If so, the partners won't be able to justify the cost of developing the field commercially unless they can share a delivery pipeline with other gas fields.

"Contingent on further seismographic work and actual drilling, it's possible that we will be able to find additional resources in the license area," said Ron Maor, CEO of Modiin Energy, which has a 10% stake in Shimshon. "We are talking about a proven reservoir, and Modiin has an option to purchase 15% of the Daniel East license as well as the adjacent Daniel West."

The Shimshon results mark the second great energy disappointment for Modiin, which also has a 29% stake in the Myra and Sara wells. In early September, the partners in those drillings reported that Myra had no commercially significant amounts of gas. The well was consequently closed, and the partners, which are led by ILDC Energy, are now developing Sara.

The Shimshon license, located 92 kilometers west of Ashkelon, was declared a gas find in August. The American company ATP Oil & Gas Corporation, which filed for Chapter 11 bankruptcy protection in the United States in August, holds a 40% working interest in the well. Other partners include Isramco, with a 29% stake; Israel Oil Co., with 11%; and Naphtha, with 10%. Isramco is also a partner in the much larger Tamar field.

Last week, ATP signed an agreement giving Moncrief Oil International a 90-day option to buy its working interests in its Mediterranean Sea properties. ATP East Med owns 35% of the Shimshon, Daniel East and Daniel West oil and gas exploration licenses, and ATP directly owns an additional 5%.