Delek Group Provides Update on Yam Tethys

abarrelfullabarrelfull wrote on 25 Jan 2012 13:23
Tags: delek israel upstream

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Delek Group (TASE: DLEKG, OTCQX:DGRLY) ("the Company") announced that Delek Drilling - Limited Partnership and Avner Oil Explorations - Limited Partnership (together: "the Partnerships") each published the below Immediate Report, regarding the ability to supply natural gas from the Mary-B Yam Tethys Project;

It should be mentioned that the Company, through the wholly-owned subsidiary Delek Investments and Properties Ltd., holds 4.441% of the Yam Tethys Project.

"Relating to the announcement of the Ministry of Energy and Water of yesterday and the publications in the press in connection with a decline in the ability to supply natural gas from the "Mary B" reservoir, the Partnerships wish to clarify as follows:

Recently there was a decline in the ability to supply natural gas from the "Mary B" reservoir ("the Reservoir"), and according to updated evaluations of Noble Energy Mediterranean Ltd., the project's operator, there will be an additional decline in the ability and level of supply from the Reservoir.

As a result, the partners in the Yam Tethys Project are examining the techno-economic consequences of this decline in supply, and also the methods of operation at their disposal in order to reduce this decline and moderate its consequences - and this while maintaining the propriety of the "Yam Tethys" project production system.

This decline in supply is expected to have a negative effect on the Partnerships' financial results - and this until commercial production from the "Tamar Project" which is expected to start in the first half of 2013; although at this stage, the Partnerships are unable to estimate, with a high level of certainty, the level of such an effect.

Today, the partners in the "Yam Tethys" project are promoting the development of the "Noa North" reservoir (as reported in the past), and are examining the technical, operative and economic feasibility, including the financial aspect, of drilling and developing the small "satellite reserves" in the Ashkelon lease which have not yet been drilled and which are likely to contain natural gas.

It should be clarified that, as stated in the Immediate Reports of January 16, 2012 (Document No. 2012-01-017259 and 2012-01-017259), correct as of that date, a decision has not yet been taken by the partners whether to drill and develop these satellite reservoirs. Should such a decision be taken, the Partnerships will publish an immediate report in accordance with the discovery directives concerning search operations and production of oil and gas.

It should also be mentioned that the partners in the "Yam Tethys" project are holding a current dialog with the authorities and with the project's customers - and this with a view to limit, as far as possible, the effects of the decline in supply of their operations.

The percentage holdings in the Yam Thetis project are as follows:

  • Noble Energy Mediterranean Ltd. - 47.059%
  • Delek Drilling, Limited Partnership - 25.5%
  • Avner Oil Explorations – Limited Partnership - 23%
  • Delek Investments and Properties Ltd. - 4.441%

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