05.07.2009

It is important to develop mathematical relationships for predicting the behavior of fluids/gases under any imaginable condition of pressure, temperature and volume (P-V-T). This is a very challenging problem. The way science approaches these sorts of problems is to introduce simplifications of the physical reality, by formulating a set of assumptions and coming up with a base model that might be called ideal. From that point on, once the base model has been established, one looks at a real case by estimating how close (or far) it performs, with respect to the base (ideal) case, and introducing the corresponding corrections. Such corrections will take into account all the considerations that the original assumptions left out.

Proved reserves that are in place in a producing field but for which commercial development has not yet started. Production is taking place in another reservoir in the same field, but these reserves have been classified as closed behind-pipe reserves and development will only start after the other reservoirs are near depletion

This is an indication of an O&G company’s capacity to bring forward new development projects. The success of a company’s oil exploration and production program and its ability to generate future projects is measured by the rate at which the program adds to the company’s proven reserves

To remove the drillstring from the wellbore

An elastic wave or sound wave in which particles oscillate in the direction the wave propagates. P-waves are the waves studied in conventional seismic data

Proved reserves that are being uplifted by a development drilling

Ratio was established in 1993 and has hitherto (2010) carried out 17 drillings at a total cost to itself of 100 million shekels. The chairman of the board is Yishayahu Shaike Landau.

Ratio is a TASE public traded L.P. which currently holds interest of 12.3% in the Med Yavne lease, 25% in the Sarit License, 10% of which they bought in 2010 from Lapidoth-Heletz for $160,000 + VAT (the rest is held by Lapidoth-Heletz 52.5% and Modiin Energy 22.5%), 15% in Rachel, Amit, Hanna, David and Eran licenses (the remainder is held by Delek, Avner and Noble) and a 100% in the Gal preliminary permit which was awarded to them in February 2010. The Gal permit is located 150 West of Netanya and spans 1.77 million duman. The new permit was granted to them until the 15th August 2011 during which period they will have to fulfill a number of milestones including buying existing 2D seismic survey and analyzing it, carrying out another 2D survey at a cost of $3.6 million and submitting a final report to the Petroleum Commissioner including an appraisal of a prospect they wish to carry forward for drilling.

At the end of 2009 Delek and Noble and Ratio carried out 3D surveys in their license called whale or Leviathan. The rights in the Leviathan license are held by Noble (39.66%), Delek Drilling and Avner (22.67% each) and Ratio (15%). The 3D also surveyed the entire five exploration sectors: Amit, Rachel, David, Hanna and Eran

Ratio used to hold 0.42% in Med Ashdod Lease and 10% in each of Asher Yam South, Asher Yam North and Zohar and were partners in the Aviv Licence which expired in January 2003. In addition to the 0.42% purchased interest in Med Ashdod, Isramco assigned to Ratio an additional 2.08% (out of 100%) from the participation in Nir-2 well drilling (plus an option for an additional 2.5%). Those rights were assigned with no past costs coverage, but it was agreed that should drilling be successful, Ratio will pay Isramco $125k for every 1% of rights in the drilling, which will be paid out of the JV profits on the gas sale.

National gas company of Qatar

Quantity of energy sources expected to be recovered from an existing well with the existing equipment and under the existing operating conditions