Monthly Update - June, 2013

Regulatory Developments

  The Cabinet approved natural gas export
       The Cabinet approved naturl gas export while keeping 540 (BCM) of natural gas to the Israeli economy.        
       According to the The Natural Gas Inter-ministerial Committee, the Israeli economy consumes 7 billion cubic meters of gas
       every year; thus, even in keeping with forecasts of a significant increase in gas consumption, the 540 BCM that the cabinet
       approved for the local consumption will suffice for at least 25 years. The cabinet approved the export of natural gas discovered
       within Israel's territory and EEZ subject to several terms and to the Petroleum Commissioner approval. Prime Minister Benjamin
       Netanyahu said, "The State of Israel has received a gift from nature – gas in vast quantities. Thanks to the decision we made
       today, every Israeli citizen will enjoy this gift. We will lower the cost of living in the electricity sector via the gas that will flow into the
       Israeli economy, and we will invest in the public welfare thanks to the profits that will go into the state coffers from gas exports.
       Any delay in implementing this decision will endanger the state's ability to realize the benefits of our gas resources.Gas must
       not stay in the ground under layers of bureaucracy and populism."

Industry Updates
  "Yam 3" exploration drill resumes
      After facing technological limitations due to high pressure, the operator, Caspian Drilling Company, informed the partners that
      drilling can be resumed and continue towards the target strata. The partners updated the drilling budget to $138 million and
      announced that the drilling that commenced on December 3rd 2012 is expected to take about 9 months, including production
      tests. In addition, Shemen Oil and Gas Ltd reported that the Petroleum Commissioner approved the transfer of 5% of the
      petroleum rights of "Shemen"/387 license to Caspian Drilling Company.

  Globe Exploration to start drilling onshore well "Ofek 2" targeting for gas
      The Partnership announced that on June 7, 2013, it began drilling the exploration well "Ofek 2" in the "Ofek" / 381 license.
      According to the resources report, there are estimated 0.63 TCF (best estimate) of natural gas with 29.4% chance of success.
      The drilling is expected to reach 5950 meters. 

  Exploration drill begins in 'Meged 6', targeting for oil
      Givot Olam Oil Exploration LP announced that it has began the onshore exploration well drilling, "Meged 6" in June 20, 2013.
      The well is located 1 km from "Meged 5", where more than 300,000 barrels of oil have been produced. According to the
      resources report conducted by NSAI, there is anestimated 2 million barrels of oil. 

Regional Events

  Cypriot government signs a Memorandum of Understanding with Delek Drilling and Noble Energy
       for the development of a Liquefied Natural Gas (LNG) Terminal
      The Cypriot government signed a non-binding Memorandum of Understanding (MOU) with Delek Drilling, Avner oil exploration
      and Noble Energy  with regards to negotiations towards signing of a binding contract involving the development of the LNG
      project by the parties by December 31, 2013. The project
  agreement, if and when signed, is expected to regulate, inter alia,
      the terms of commercial development and structure of the LNG project, if it produced from Block 12, and other terms, including
      the possible inclusion of third parties that may participate in the LNG project and the possible expansion of the LNG project to cover
      the territories of other license discoveries in Cyprus and / or in neighboring countries. According to the West Australian publication,
      Woodside, the Australian energy company is considering joining the consortium to build a LNG plant in Cyprus instead of in Israel.