Author: bomuo

A well drilled: a) to find and produce oil or gas in an area previously considered unproductive; b) to find a new reservoir in a known field or c) to extend the limit of a known oil or gas reservoir.

Any well drilled for the purpose of securing geological or geophysical information to be used in the exploration or development of oil, gas, geothermal, or other mineral resources, except coal and uranium, and includes what is commonly referred to in the industry as “slim hole tests,” “core hole tests,” or “seismic holes”.

The phases are as follows: Seismic survey + processing and interpretation; deciding on a prospect for undertaking an exploration drilling; exploration drilling (including logs and additional tests); production testing (in certain circumstances); discovery; carrying out an appraisal drilling and data analysis; development of commercial discovery; production

Oil and gas exploration is not an exact science and operations are thus classified as high risk since if exploration fails, all the money invested, including drilling could be lost

As per the MNI regulations: Exploration License must be obtained prior to drilling. The license is granted initially for a period of 3 years and can be extended for up to 4 more years.

The maximum size of an exploration license in Israel is 400 sq.km

License granted by the licensing authority to carry out exploration activities to seek hydrocarbons

Exploration Lease is granted to the license holder, if oil has been discovered in commercial quantities. The lease maximum period is 50 years (30+20). The royalty paid for oil and gas is 12.5%. The state can ask that the royalty be paid in kind, namely in the form of natural gas rather than money. The request for a lease comes after the official declaration that a drilling has lead to a commercial discovery.

This is the stage after the license period after the Petroleum Commissioner has acknowledged that a commercial discovery has been made. A development lease is granted for 30 years that can be extended by an additional 20 years, during which time the leaseholder is obliged to develop the field with all due diligence as a prudent operator and if he fails to do so and to start within the time allotted in his lease (usually 6 months after the lease has been awarded then it can be revoked). A lease confers upon the leasee the exclusive right to explore for and produce petroleum in the lease area and requires that the leasee produce petroleum in commercial quantities (or pursue test or development drilling). he leasee is entitled to transport and market the petroleum produced, subject to the right of the Government to call upon him to supply local needs first, at market price.

Drilling carried out to determine whether hydrocarbons are present

That exploration phase of an oil and gas right (such as the budget, programs) are usually agreed between the partners on an annually basis