Tamar Gas Field Gets an Upgrade

Israel's Delek Drilling published July 2 an updated report on natural gas reserves and the condensate in the Tamar lease, which includes the Tamar reservoir and the SouthWest Tamar reservoir. The report indicates an increase of 13% in the proven and expected gas reserves (P2) in the lease relative to the previous estimate.

The updated reserves report, which will also be published with Tamar Petroleum prospectus, was prepared by an independent appraiser, Netherland, Sewell & Associates and includes an analysis of the geological and engineering information from the Tamar 8 well, drilled just recently, as well as the updated data.

The previous reserves estimate by Netherland, Sewell, published in the 2016 financial statements indicated a proved and probable (P2) reserves of 282bn m³ and 13mn barrels of condensate. The updated report indicates reserves of 318bn m³ and 14.6mn barrels of condensate.

Tamar Petroleum is seeking to raise up to $1.8bn in the Israeli financial market, made up of $1.2bn in equity and up to $650bn in bonds. The money raised from the bonds will be used in order to redeem Tamar Bonds that were issued several years ago.

The new report will support the company's claim for Tamar enterprise value of over $12bn. The first part of the bonds issuance is expected to be completed this week, and the second phase, selling equity in Tamar Petroleum, is expected to be closed by next week.

(Credit: Delek)

"The updated reserves data indicate that the entire geological potential in the Levant basin has not yet been exhausted," said Delek Drilling CEO Yossi Abu (pictured, above). "The Tamar reservoir led to the energy independence of the state [of Israel] and the Israeli economy, but the natural gas revolution in Israel is still in its infancy. We will continue to act to assimilate natural gas as the main driver of the electricity sector and Israeli industry, as well as penetrate new target markets such as transportation."

In addition to his job as Delek Drilling with a compensation package of about NIS 7.6mn ($2.2mn) in 2016, Abu will serve as chairman of Tamar Petroleum and earn NIS 1.2mn. Tamar Petroleum's CEO will be Liami Wiseman. His salary will be NIS 1.2mn.

Ya'acov Zalel