Israel: AGR reports significant gas shows in the Aphrodite-2 well offshore Israel

Global services and technology company AGR (‘the Operator’) reports that the Aphrodite-2 well, currently being drilled offshore Israel, has reached a depth of 5 652 meters from sea level (including water depth of about 1 707 meters). Based on examinations performed during the drilling of the well, ‘significant signs of hydrocarbons’ (natural gas) were found in the lower Miocene sands.

AGR reports additional information with respect to the well, in line with Israeli regulations:

Name of the Well: Aphrodite-2
Date of the finding of the hydrocarbons signs: 02.01.2013
Dept of the target top: 5187 meters below sea level.
Net layer thickness: The thickness of the natural gas bearing layer is approx. 15 meters.
Types of the hydrocarbons: Natural gas
The types of tests (types of logs) that were performed for establishing the information regarding the existence of the significant hydrocarbons signs: The tests conducted at the Well included MWD (measurements while drilling) as well as Wireline Logs (including electrical, radioactive, magnetic and seismic tests), lithological tests (cuttings and side wall cores) and composition and pressure tests of gasses and fluids.
The indications on how the corporation has reached its conclusion with respect to the credibility of the signs: The Operator has performed various tests as above-mentioned and whose results attest that the said layers contain natural gas. These preliminary results and their analysis clearly indicate the existence of natural gas in the Well.

AGR further stated that ‘It is clarified that the production tests have not been performed in the well. The natural gas signs do not evidence an existence of the discovery in its meaning according to PRMS rules or of the discovery in its meaning pursuant to the Petroleum Law.’

The rig drilling the Aphrodite-2 well has completed drilling the well and is expected to plug and abandon the well in the upcoming 2 weeks. After completing the well, the operator will perform processing and evaluation of the information collected while drilling and logging.

Background

The Aphrodite-2 well is the first well in the ‘Pelagic licences’ and is located in the Ishai Licence, the licence closest to Cyprus. Pre-drilling, the Aphrodite Prospect was estimated to have the potential for 3.7 TCF of natural gas in contingent and prospective resources, based on a resources report compiled by Texas-based petroleum consultant Ryder Scott in 2012, with a 76.7% probability of success. The Noble Homer Ferrington rig is drilling the well, after completing drilling the wells at the Myra and Sarah licenses. The rig previously drilled the Leviathan 1 well.

There are five deep-water Pelagic licences - Aditya, Ishai, Lela, Yahav, and Yoad (licences 370-374) - covering two million dunam (500,000 acres) 170 kms west of Haifa, between Leviathan’s Ratio Yam and Cyprus’s Block 12, which includes the Aphrodite structure. The Pelagic fields are in the same area as the Tamar field, with some 9 tcf of gas, and Leviathan, which was the world’s largest deep-sea find of the past decade with an estimated 17 tcf of natural gas. Israel Opportunity owns 10% of the licenses, Beny Steinmetz and Teddy Sagi each own 42.5% through various private companies, and AGR Group owns 5%.