abarrelfull wrote on 11 Mar 2012 19:07
Tags: cyprus delek europe upstream
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Delek Group (TASE: DLEKG, OTCQX:DGRLY) (“the Company”) announced on March 06, 2012, according to the information provided to the subsidiaries Partnerships – Delek Drilling L.P. and Avner Oil & Gas Exploration L.P. (“the Partnerships”) by Noble Energy International Ltd. (“Noble” or the Operator”), the operator of the A-1 exploration well (“Aphrodite”) in Block 12 in Cyprus (the “Well” and “Block 12”, respectively) and according to the updated resource report as of March 5, 2012, prepared by Netherland Sewell and Associates, Inc. (“NSAI”), the Company respectfully notifies as follows:
Noble posted on its website, on December 28, 2011, a press release which included data pertaining to the Well, including data on the natural gas resources found in the Well, which were not prepared according to the Petroleum Resources Management System ("SPE-PRMS") guidelines, were not in accordance with the Israeli Securities Authority's Disclosure Directive concerning Gas and Oil Exploration and Production (as amended) (the "Disclosure Directive") and did not reflect the opinion of the Partnerships, the Company, its management or its controlling shareholders.
At the Partnerships’ request, Noble, in coordination with the Cypriot authorities, approached NSAI with the request to prepare an updated post-drill resource report in the format required by Section 13(a) of the Disclosure Directive (the “Updated Resource Report”).
In view of the aforesaid, and based on the data that were provided to the Partnerships and to NSAI by Noble, and based on the Updated Resource Report, the Company respectfully notifies as follows:
1. Natural Gas Discovery in the “A1” Well:
a.
The Operator performed various tests at the Well (as specified below) whose results, as provided by the Operator, satisfied the Partnerships as to the existence of natural gas in the Well. The Operator has further informed the Partnerships that in its estimation, the quantity of natural gas discovered in the Well, justifies estimating and evaluating the volume of natural gas in the Well, as well as estimating and evaluating the volume of economically-recoverable natural gas.
In view of the aforesaid, the "A-1" Well (“Aphrodite”) is a natural gas discovery.
According to the provisions of the Disclosure Directive, the Company clarified as follows: “A discovery is defined in the SPE-PRMS as ‘one petroleum accumulation, or several petroleum accumulations collectively, for which one or several exploration wells have established through testing, sampling, and/or logging the existence of a significant quantity of potentially moveable hydrocarbons. In this context, ‘significant’ implies that there is evidence of a sufficient quantity of petroleum to justify estimating the in-place volume demonstrated by the well(s) and for evaluating the potential for economic recovery.”
b.
Set forth below are details regarding the Well:
Name of Well: “A-1” ("Aphrodite").
Date of discovery of petroleum: December 28, 2011.
Depth of the target top: Approx. 5,137 (Top C) meters below sea level (including water depth).
Net layer thickness: The (net) thickness of the layer bearing natural gas is approx. 95 meters.
Type of petroleum: Natural gas.
Types of tests carried out to substantiate the information regarding the discovery of indications of petroleum: The tests conducted at the Well included, inter alia, Wireline Logs (including electrical, radioactive, magnetic and seismic tests), lithological tests (cuttings and core) and composition and pressure tests of gases and fluids.
The results on the basis of which the corporation gained satisfaction regarding the reliability of the indications: As aforesaid, the Operator performed various tests in the Well, whose results attest to the existence of natural gas in the target layers. This information, which was provided to the Partnerships by the Operator, as well as the Updated Resource Report as specified below, satisfied the Partnerships regarding the existence of natural gas in the Well.
2. The Updated Resource Report
According to the Updated Resource Report of March 5, 2012, which is attached hereto by way of a referral, some of the resources in the reservoir included in the Block 12 area (the “Aphrodite Reservoir”) were proved-up by the Well, and therefore are classified as Contingent, while other resources, in fault blocks adjacent to that where A1 was drilled, were not proved-up and therefore remain Prospective. Accordingly, the Updated Resource Report is divided into a Contingent Resource Section ("Contingent Resources Section"), and a Prospective Resource Section ("Updated Prospective Resources Section"), as specified below.
NSAI listed in the Resource Report, pertaining to both Contingent and Prospective sections, inter alia, several assumptions and reservations, including that:
1) The evaluations were not adjusted to reflect commercial risk;
2) The Evaluator did not perform any field inspection of the discovery, and did not examine the mechanical operation or condition of the Well;
3) The Evaluator did not examine possible environmental liability related to the discovery; however, the Evaluator is not aware of any possible environmental liability that would have any material effect on the resources quantities estimated in the report or the commerciality of such resources estimates.
4) The resources shown in the report are for an undeveloped location; therefore the evaluation is based on an estimate of the reservoir volume and recovery efficiencies, while drawing an analogy to reservoirs with similar geological and reservoir characteristics.
