The Tamar license from the Matan 309 license. The Tamar license was originally held by Noble Energy (33%), Isramco (27.5%), Avner (15.1%), Delek (15.1), STX Steinmetz (5%) and Dor Gas (4%). A few weeks before spudding Steinmetz together with partner Yossi Langotsky withdrew from the JOA and their share was divided pro-rata between the remaining partners. Thus Noble thus now holds 36%, Isramco 28.75% (Kobi Maiman 33%, public 67%), Delek Drilling 15.625% (Yitzhak Tshuva 69%, public 31%), Avner 15.625% (Yitzhak Tshuva 51%, Migdal 5%, Gideon Tadmor 2.5%, public 41.5%), Dor Gas 4% (Dudi Weisman and Shraga Biran 4.6%, public 9.4%).

Tamar #1 Well drilled 90 km west of Haifa at a water depth of 1,680 meters and drilled down to a total depth of 16,076 feet (4,900 meters) to test a subsalt, lower-Miocene structure in the Levantine basin by Noble as the operator. The well encountered more than 460 feet of net pay in three high-quality reservoirs. Testing procedures, which were performed over a limited 59-foot section of the lowest reservoir, yielded a flow rate of 30 million cubic feet per day (Mmcf/d) of natural gas. The flow rate was limited by testing equipment available on the rig. Performance modeling indicates the well can be ultimately completed to achieve a production rate of over 150 Mmcf/d. After analysis of all the post-drill and production test data, the estimated gross mean resource potential of Tamar was initially believed to be to 5 Tcf. Cost of drilling Tamar-1 was $92 million; cost of Tamar-2 was $78 million; cost of Dalit-1 was $57 million; cost of mod and demob for the 3 wells was $46 million.

The Tamar-2 appraisal drilling started on 26.4.2009. By 11th January 2009, namely within 8 weeks the drilling reached its td at 4,900 m having drilled through a relatively thick layer of salt (1,400m) and finding first signs of gas in the sand layer. On 8th July 2009, Noble Energy announced results from its Tamar-2 appraisal well. At a total depth of 16,880 feet and in 5,530 feet of water, the well is located approximately 3.5 miles northeast of the original discovery, Tamar-1. Drilled on the flank of the structure with the intent of confirming reservoir quality and continuity, the appraisal was also designed to confirm the projected gas/water contact. The reservoir thickness and quality were consistent with that encountered at the Tamar-1 location. Pressure data also confirmed continuous high quality reservoirs. The gas/water contact was encountered where projected in the middle reservoir and, as expected no water contact was seen in the top reservoir. Whole core samples in three reservoirs were obtained to assist in the geologic and engineering studies needed for field development.

On 11th August 2009, external report of Tamar came from Netherland, Sewell and Associates, which stipulates that the gross mean resource of Tamar is 207 bcm; Proved + probable or P2 estimate is 218 bcm; Proved or P1 estimate is 170 bcm. The Psagot Brokerage estimates Tamar’s market value is $4.55 billion. Marine construction and civil engineering firm Oceana Advanced Industries reported on 30th August 2009 that wholly-owned subsidiary Oceana Marine Research received an order from Noble Energy for ocean surveys. The request for the ocean surveys is part of the planning for the laying of a gas pipeline from the Tamar and Dalit drilling sites to points on Israel’s shore. The deal is worth about $2.4 million. It is expected to be completed by the end of October. In December 2009 Noble, Delek and partners received the lease to the Matan and Michal licenses. The Tamar and Dalit lease each extend over an area of 250,000 dunam. The lease includes, inter alia, provisions regarding time tables that need to be met to develop the lease, regarding construction and operation of the facilities, carrying out surveys, reports, responsibilities, insurances, etc. The lease has been granted according to the Petroleum Law-1952 and they grant the partners the right to produce oil and natural gas in the lease area for a period of 30 years with a right to extend this period for an additional 20 years, in accordance with the provisions of the Petroleum Law.

On 14th December 2009 Delek Drilling reported to the TASE that the Tamar and Dalit partnership would sign a binding deal with Dalia in the next two months after Dalia secures statutory permits and funding. Revenues from the sale of gas to the tune of 200 billion cubic feet (5.6 billion cubic meters) to be sold over 17 years as of the date of operation of the station that should be sometime during the second half of 2012. According to the MOU, the quantity of gas might be slightly smaller than this quantity based on the operational hours of the station that will be established, its gas use scope and the final size of the station, or that the quantity of gas may indeed be significantly higher than this amount, up to even three times the amount quoted here. The partners estimate that the revenue for the sale of 5.6 bcm will be about $1 billion but that it is to be clarified that the actual revenue will stem from the total of a large number of factors including those specified above and including the price of energy. Based on this, one can estimate that the price per mmbtu is an average of about $5.06 or between a floor of $4.00 and going up to about $5.00 mmbtu, depending on the indexation.

On 24th December, IEC signed a LOI with the Tamar project (Tamar and Dalit partners). According to the LOI signed with the Tamar partners the parties will carry out negotiations for the sale of gas from the Tamar project to IEC for 2.7 bcm per year and which could be even significantly higher and for a period which will not be less than 15 years. The scope of the income is esteemed to be between $400 million – $750 million per year, but it is clarified that the exact amount will stem from the global price of fuels on the actual date of supply of the gas and the exact quantities of gas that will be purchased by IEC. The operator of the Tamar project, Noble estimates that the total extent of sales to IEC based on the LOI will be approximately $9.5 billion based on their estimation of the actual price of fuels when the supply of gas will take place throughout the contract period.

Notification is hereby made on the 19.2.2010 that a letter of intention was signed between the partners in the Tamar and the Dalit project with the Darom Ltd. power station and Dimona Silica Industries (DSI). According to the LOI the buyers will buy natural gas for a power station they intend to establish as well as for the buyers’ industrial plant. According to the LoI, the buyers intend to buy a minimum amount of natural gas of 100 bcf (about 2.8 bcm) and this over a period of 17 years. Moreover, the parties agreed in their LoI on the conditions whereas the buyers may buy larger quantities of gas for the buyers’ potential additional projects.

According to the LoI, the amount of gas that the buyers are entitled to buy – and which will be determined de facto inter alia based on the scope of the buyers’ additional projects that will actually be established, on the power station’s operational hours, on the amount of gas to be used by the power station and by the other projects – may be even significantly larger, potentially even twice as much as the quantity specified above. The revenue for the sale of 100 bcf of gas is estimated today by the Tamar partners as $0.5 billion (for 100% of the rights in the Tamar project). It is to be clarified that the actual revenues wills stem a number of factors including those specified above, the cost of energy, etc. The letter of intent is non binding and the parties intend carrying out immediate negotiations with the objective to sign a binding supply agreement within the next two months.

Delek and Avner will have to pay an overriding royalty of 0.48% each to Dor Chemicals that transferred to them in 2007 their rights in Tamar and Dalit. Namely, this amounts to a future revenue stream for Dor Chemical of 0.15% of the income that will stem from these fields.

In their financial report for the first quarter of 2010, Delek Drilling and Avner Oil and Gas stated that the total cost of developing the Tamar field would be $2.8 billion

On 3rd June 2010, Delek stated that following on from our immediate report dated August 8, 2009, we are pleased to announce that Noble has announced that it has received an updated report from Netherland, Sewell and Associates concerning the natural gas reserves in Tamar. The update was based on the results received in the analysis of the cores extracted from the Tamar 2 well. According to the NSAI report, the Tamar natural gas reserves, which will be categorized as 2P Reserves (Proved + Probable) subject to the approval of the Tamar field development plan (which will also include a reasonable expectation to sell natural gas produced from the field) are estimated at 8.7-TCF (about 247 BCM), compared with about 7.7 TCF (about 218 BCM), reported in our Previous Report (an increase of about 13%). The 1P gas reserves (Proved Reserves), total about 6.5 TCF (about 184 BCM), compared with about 6 TCF (about 170 BCM) reported in our Previous Report (an increase of about 8%). NSAI also provided a report estimating the Gross Mean Resources in Tamar to be 8.4 TCF (about 238 BCM), compared with about 7.3 TCF (about 207 BCM) reported in our Previous Report (an increase of about 15%).

June 2010 – Aker Solutions received a contract from Noble Energy to deliver subsea control equipment for the Tamar project in the Mediterranean Sea. Scope of work is engineering, manufacturing and delivery of a subsea controls distribution system, umbilical termination assemblies (UTA) and related equipment. This contract complements the recently announced award for delivery of 240 km of subsea umbilicals for the same project. Aker Solutions has also recently signed a deal to supply a complete mono ethylene glycol (MEG) reclamation unit to Noble Energy. Engineering and project management will be provided from Aker Solutions’ Houston, Texas, office. Manufacturing will take place at Aker Solutions’ facilities in Houston and Mobile, Alabama, for the UTAs and subsea controls distribution systems. Estimated delivery date is Q1 2011.

Stock exchange statement on 11th August 2010 by all the Tamar partners that on the 10th Aug the MNI approved to the Tamar project to develop the gas field under the structure of a double pipeline, in which natural gas will flow from the field to a production platform that will be set up close to the existing platform of the YT project and from this platform will flow in the existing pipeline to the receiving facility of the existing Yam Tethys project in Ashdod. Noble has stated that this development option will enable the flow of natural gas from the Tamar field to the Israeli market by the end of 2012 and that the budget of the project will be similar to the estimated budget that was carried out by Noble based on the original development plan according to which they had expected to transmit the gas from Tamar to a northern receiving terminal. In addition, Noble has stated that they will continue to work with the government ministries and planning bodies to promote a national outline plan to enable an additional linkage point in the north of the country.

(Sept. 2010) Noble stated that initially development will be based on five subsea wells each designed to flow 200-250 MMcf/d. Production will be gathered at the field center and exported via two 16-in. (40.6-cm) flowlines to a new platform, to be erected next to the Mari-B structure in shallow water off southern Israel. The Tamar platform will tie into the existing 30-in. (76-cm) pipeline that sends gas to the Ashdod onshore reception terminal, with initial processing capacity up to 1 bcf/d. Noble adds that there will be scope for future gas injection and withdrawal in the Mari-B reservoir. In September 2010 Noble stated it was a superior reservoir of 1 darcy permeability and porosity 25% with 99% methane and that cumulative revenues estimated at $11 B for less than 25% resources

Gross capital cost for Tamar is estimated at $3.0 billion ($1.1 billion net to Noble Energy). The majority of key project components have been awarded and development drilling is scheduled to commence by early 2011. Project installation is expected to be complete and commissioning initiated in the fourth quarter of 2012. Stock Exchange statement on 23rd September 2010 from Delek and partners that the partners’ estimate is that the commercial supply from Tamar will be in the middle of 2013.

Delek Drilling 2010 Report: Tamar 1 C 183.49 bcm and 3C 294.58 bcm.

Development of Tamar to be done from 2 16 inch pipelines down to production platform close to the Mari B platform and from there in the existing 30 inch pipeline to Ashdod terminal that is due to be upgraded and will allow production of 1.2 bcf of gas per day.

11th April 2011 – Delek and partners made a TASE announcement today that Noble Energy has informed them that the Sedco Express rig has started on 10.4.2011 to carry out the development drilling of Tamar 6 and this as part of their plan to carry out the development drilling in the Tamar project. The drilling development plan will be carried out in 3 stage:
At the first stage will be drilled in the following order Tamar 6, Tamar 5, Tamar 4 and Tamar 3 to an initial depth of 2,500 meters including water depth.
At the second stage these wells will be drilled to their final td planned at 5,200 meters
At the third stage these will be completed for production and at the end Tamar 2 will be completed for production, a well which was drilled in 2009 as an appraisal well for the discovery well Tamar 1.

The planned timetable for this program is about a year.

The budget to carry out these development drillings is included in the general budget framework estimated for the Tamar project as published in the past.

April 2011 – April 2011 – Noble Energy has awarded the Expro company a $27 million contract to conduct well-testing and provide sub-sea services and equipment aboard the Transocean Sedco Express oil rig, services which include a high flow rate-testing package for the gas wells, and large bore sub-sea safety systems.

April 2011- Oilfield and Marine service specialist EMAS through its Singapore based Ezra Holdings unit has received a contract worth about $88 million for various subsea services on Tamar. Under the contract, EMAS will install 330 km of umbilicals and equipment, as well as deliver subsea suction piles and jumpers which are being manufactured by the Aker Solutions Group in the US.

18th Aug 2011 – NSAI revised reserve estimate of 9.144 tcf (best estimate) from NSAI. NSAI’s revised low estimate is 6.66 trillion cubic feet and its high estimate is 11.18 trillion cubic feet.

15th Dec 2011 – IEC signed a GSA with Tamar partners for the period of 15 years to buy 3 bcm of gas with option to increase to 5 bcm (see IEC TASE announcement of this day)

Recoverable (best estimate) reserves updated to 9.7 tcf