March 13 (Bloomberg) -- Modiin-LP gained the most in more than five months after a report said the oil and gas explorer’s Gabriella site has a “reasonable chance of being commercial.”
The shares jumped 16.2 percent, the most since Oct. 3, to 0.365 shekel at the 4:30 p.m. close in Tel Aviv. Shemen Oil and Gas Resources Ltd., which has a license south of Gabriella, advanced 9.1 percent to 0.168 shekel.
Modiin said a Netherland, Sewell report on the Block 378/Gabriella site in the Mediterranean, 24 kilometers (14.9 miles) North-West of Tel Aviv, has best estimate gas contingent resources of 110.1 billion cubic feet and best estimate oil contingent resources of 110.1 million barrels. Modiin said it expects drilling to start by the end of 2012 and that it will subsequently “quickly proceed” to produce and market the oil to the local market.
“What is significant here is that appears it will be commercially viable to produce the oil,” Eran Yunger, an analyst for Migdal Capital Markets in Tel Aviv said today by phone. “The quantities found could satisfy local consumption of oil for the next year to two years.”
Modiin holds a 70 percent stake in the license, while Adira Energy Israel Ltd. owns 15 percent, according to a statement issued by Modiin today. There is no certainty the resources will be able to be produced commercially, Modiin said in a separate statement.
“Investors believe that if there is oil potential at the Gabriella site it raises the chances of finding oil at the Shemen site,” Yaron Zer, an analyst at Clal Finance Brokerage Ltd. said by phone today. “What remains to be seen is how much of the Gabriella oil will be able to be produced and what will be the daily production rate.”
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