Israel Oil & Gas

The East Meditterranean Opportunity

  • The host of the two largest worldwide gas discoveries of this decade
  • Oil could be the next natural resource headline story for Israel
  • USGS estimates Levant Basin 122TCF gas, 1.7BBbL oil
  • Syrian Arc extends from Syria to Egypt - current East Med production and MMBOE reserves
  • Regional demand for oil - Israel currently imports 230,000 BOPD

Levant Basin Discoveries Since 2009

Discovery Size

Tamar

10 TCF

Dalit

0.5 TCF

Leviathan

16+ TCF    Possible Deep Oil

Cyprus

5+ TCF

Tanin

1.2 TCF

Dolphin

0.6 TCF

Shimshon

2.3 TCF

Total Discoveries

35.6+ TCF


Syrian Arc Trend - The Oil Kitchen

Adira Offshore Blocks part of the Syrian Arc Fold - The Israel Oil Trend

Israel's Oil Trend

Project Gross (Best Case)

Yam Hadera - Modiin

133 mmbo

Yitzhak - Adira

79 mmbo

Gabriella - Adira

110 mmbo

Samuel - Adira

66 mmbo

Shemen

270 mmbo

TOTAL

658 mmbo


The Oil Potential

  • Oil is the Next Resource Headline for Israel
    • Market immediately available
  • Upside Potential Along Trend
  • Government Supportive
    • Security of supply
    • Daily importation approximately $25 million/day
    • Funds going to other countries
    • Internal production reduces dependency and costs
    • State additionally benefits through tax and royalty to producers
  • Risks Minimized
    • Projects are not technically challenging and close to shore
    • Much of the internal infrastructure already in place
    • Pipelines and refining capacity

Gas Pipeline

Economic Miracle in the Mid-East

Financially stable:

  • Israel reclassified as a DEVELOPED market by MSCI
  • Considered the most advanced country in the Middle East in both economic and industrial development
  • Has been ranked highest in the region on the World Bank's Ease of Doing Business Index as well as in the World Economic Forum's Global Competitiveness Report
  • Has the second-largest number of start-up companies in the world (after the United States) and the largest number of NASDAQ listed companies outside North America
  • In 2007, Israel had the world's 44th highest GDP and 22nd highest GDP per capita (at purchasing power parity) at US$233 billion and US$33,299 respectively

Standard and Poors ("S&P") credit ratings:

  • Foreign currency sovereign credit - "A"
  • Long-term local currency rating to - "AA"

OECD:

  • May 2010: Israel accepted as full member of the Organization for Economic Cooperation (OECD)

License in Israeli Law

"…bestowing an exclusive right for further exploration work, and requiring the drilling of test wells. The initial term of a license is up to three years and may be extended for up to an additional four years. A license area may not exceed 400,000 dunams (approximately 100,000 acres)."

"…upon discovery of petroleum, the licensee has a statutory right to receive the third type of right, which is a production lease. The initial lease term is 30 years, extendible to a maximum period of 50 years."

"…the award of petroleum rights, with the exception of the preliminary permit and priority right, is a matter of public record and is published in the Petroleum Register and in Reshumot (The Official Gazette)."

Other:

The holder of a petroleum right is entitled to import into Israel, free of customs duties and other import levies, the goods required by him for petroleum exploration purposes.

Leasee is liable for a royalty of one-eighth (12 1/2%) of the quantity of petroleum produced and saved from the lease area.

Ministry Of National Infrastructures