The Partnership will complete two drillings this year, and two more next year # The cash flow from oil sales is expected within next year
Eyal Shuker, CEO of Israel Opportunity: The partnership has a large cash pool that will allow immediate development of the fields
The oil and gas exploration company Israel Opportunity is entering, for the first time, into oil drilling and production activity in the USA. The Partnership announced today the purchase of 10 oil wells, spread across an area of about 6,400 acres, in the oil-rich North Dakota. The Partnership intends to perform two development drillings this year and two more during 2018. The cash flow from oil sales is expected to begin in 2018.
According to the agreement, the seller, Thurston Energy, which prior to the signing of the transaction holds about 94% of the rights to the oil fields, will transfer 75% of its rights to Israel Opportunity and its partners, so that it remains with only 25%. The Partnership will hold 67% of the license, Cyprus Opportunity will hold 3% of the license, and Radian Partners will hold 5%. In return for the purchase of rights, the partners have paid about $2.4 million.
North Dakota is considered oil rich. Oil production started in this State as early as 1951, and as of today, about 1 million oil barrels are produced in it each day. In addition, the State has advanced infrastructures in the area of oil exploration, production and transfer, and official regulation. Oil has been produced in the past within the license areas purchased.
According to a 2013 report prepared by the USGS American geological institute concerning Williston Basin, most of which lies within the area of North Dakota, and where the properties are located, the yet-undiscovered oil reserves are estimated at 7.4 billion oil barrels.
Successful drillings have already been made in fields near the fields purchased, within the same target layer, Midale Nesson, which currently produce oil. In addition, as far as the partners are aware, dozens of drillings are planned for this year by other oil companies in the same area and within the same geological layer.
As part of the work plans for the field’s development and use of its potential, the partners are planning a widespread drilling campaign of about 40 onshore drillings. Ten out of these drillings will be based on re-entry into wells which already produced oil in the past, and 30 will be new production drillings. The drilling budget for new wells will be $3 million and the budget for re-entry will be $1.5 million. Two of the drillings are expected to commence this year and two more during the next year. In total, the partners intend to complete all drillings by 2023, among other things, depending on the oil price.
According to Eyal Shuker, CEO of the General Partner of Israel Opportunity, The change in legislation by which oil exploration partnerships can operate abroad, together with the large cash reserves of “Israel Opportunity”, enable us to realize the international economic potential currently embedded in the global oil market, with an emphasis on entering fields with proven oil discoveries. The Partnership’s cash reserves enable it to commence drilling and development of the oil fields in the license areas immediately. The Partnership intends to continue to examine existing opportunities in the market and expand its international operations.