Adira Energy September Corporate Presentation


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Adira Energy September Corporate Presentation

  1. 1. TSX.V: ADL A TSX-V Listed Oil and Gas Company Exclusively Focused On and Offshore IsraelCorporate PresentationSeptember 2011
  2. 2. TSX.V: ADLForward Looking Statements CAUTIONARY STATEMENT REGARDING FORWARDING-LOOKING INFORMATION Except for statements of historical fact relating to Adira Energy Ltd., Adira Energy Israel Ltd., Adira Energy Israel Services Ltd., Adira Oil Technologies Ltd., Adira Geo Global Ltd. ("Corporations”), certain information contained herein, including statements regarding the volume of wells natural gas reserves constitutes "forward-looking statements" within the meaning of the United States Private Litigation Reform Act of 1995 or "forward-looking information" within the meaning of the Securities Act (Ontario) or Forward Looking Statements as defined under the Israel Securities Law. Forward-looking statements are frequently characterized by words such as "target,” "plan,” "expect,” "project,” "intend,” “believe,” "anticipate," and other similar words or statements that certain events or conditions "may" or "will" occur. Forward- looking statements are based on the opinions and estimates of management or advisors at the date the statements are made and are subject to a variety of risks, uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The factors include the inherent risks involved in the exploration and development of oil and gas properties, the uncertainties involved in interpreting drilling and seismic results and other geological data, fluctuating oil and gas prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties inherent to conducting business in Israel, the availability of supplies, unexpected adverse climate conditions, the reliance on only a few key members of management, and other factors. The Corporation undertakes no obligation to update forward looking statements, if circumstances or advisor or management estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements. DISCLAIMER The information contained in this presentation is confidential and for internal use only. The contents are not to be reproduced or distributed to investors, the public or press. The information contained herein, while obtained from sources which we believe are reliable, is not guaranteed as to its accuracy or completeness. The contents of this documentation is for information purposes only and does not constitute an offer to sell or a solicitation to purchase any securities referred to herein. Estimates are based on geological, geophysical and other estimates received from third parties and/or advisors and serve, at this time, only as estimates whereby there is no certainty, as of yet, with regards them. No information contained in this presentation is compliant with NI-Policy 51-101 requirements. The Corporations have not conducted estimates or independent evaluations of the said estimates. Any estimates are expected to be updated as additional information is accumulated, including as a result of the continued analysis of the well proceeds, the conduction of production tests and the conduction of validation drilling, should they be conducted, andor as a results of a variety of factors related to projects searching for, and producing, natural gas. None of the Corporations or any of the individuals associated thereto have independently confirmed or verified the information contained in this presentation. The reader should take all reasonable actions to satisfy itself as to the accuracy of the information contained in the document. 2
  3. 3. TSX.V: ADL Adira Energy- Israel Opportunity Newly Discovered Oil & Gas Basin- Offshore Israel• First Israeli-based TSX.V listed company with pure & exclusive exposure to the recent Israeli offshore gas discoveries• Working Interest and Operator of three offshore licenses and one onshore license• Sufficiently capitalized with funds to complete exploration through pre-drilling• Strong shareholder base with access to additional capital• Two independent NI 51- 101 Resource Reports completed by Gustavson Associates on Gabriella & Yitzhak• Indication of resource potential, both onshore and offshore• Carefully managed exploration strategy• 3D geophysics now complete on three licenses• Established Tel Aviv office, fully staffed with local infrastructure• TSX-V listed with Toronto office and executive presence• Experienced and professional Board, Technical and Management Teams 3
  4. 4. TSX.V: ADL Board of Directors• Dennis Bennie - Chairman, Independent Director Co-Founder Adira Energy. Founder and CEO of XDL Capital; Co-founder, Former Chairman and CEO of Delrina Corporation; former Chairperson of Canada Israel Political Affairs Committee (CJPAC).• Eli Barkat - Independent Director Chairman and Co-founder of BRM, a recognized figure in the Israeli business community, with more than 20 years of entrepreneurial, investment and business management experience.• Sheldon Inwentash - Independent Director Chairman and CEO of Brownstone Energy. More than 20 years of experience in the investment industry and a deep understanding of progressive investment and financial management strategies. A Chartered Accountant, Mr. Inwentash is also the Chairman and CEO of Pinetree Capital Ltd., a Canadian investment company with a portfolio of investments primarily in the resource and energy sectors.• Yael Reznik Cramer - Independent Director VP Business Development of BRM Group, (major shareholder of Adira Energy). Currently sits on the boards of Backweb and Schema. She is a Certified Public Accountant in Israel and holds a B.A degree in Accounting and Economics from the Hebrew University in Jerusalem and an MBA from Tel-Aviv University.• Alan Friedman - Executive Vice President - Corporate Development, Director Co-Founder Adira Energy. Senior roles in resource public market sector and emerging markets covering acquisitions, disposals, financings and investor communications. Over the past 10 years, has managed or facilitated numerous successful going public transactions (IPO & RTO) on TSX and TSX-V as well as facilitation of financings in excess of $100m. Various roles in TSX companies including Afriore Ltd., Talon Metals Corp. and Auryx Gold Corp.• Colin Kinley – Senior Advisor, Director CEO of Kinley Exploration LLC, leading a team of industry experts providing professional, technical and oversight expertise to international resource companies within the upstream sector. With 30 years of international expertise in integrated energy project management and new energy companies development. Kinley served as a Senior Executive to several E & P companies & oilfield service companies and is specialized in frontier resource development. He is a Director and CEO of Manx Energy Inc. - an Integrated Oil and Gas Company developing Heavy Oil in Canada and a Director of Excelsior Minerals 4
  5. 5. TSX.V: ADL Management & Advisors• Hezi Kugler- Chief Executive Officer• Hezi has extensive experience in the energy infrastructure field in general and in Israel’s hydrocarbons market in particular. Prior to his position as Director General of Israel’s Ministry of National Infrastructures from 2006 – 2009, he was a leading project finance lawyer on major projects in the energy and water sectors in Israel. During his tenure as Director General, he was responsible for overseeing Israel’s power sector and oil and gas exploration and development on behalf of the government. Mr. Kugler led Israel’s negotiations with BG on development of the Gaza Marine natural gas reservoir off shore from Israel / the Palestinian Authority; he initiated Israel’s first LNG project and served as co-chairman of the government tender committee; he supervised closely development of Israel’s natural gas transmission system; and was responsible for development of Israel’s oil and LPG imports networks carried out through government-owned companies under his supervision. He holds a BA in Political Science from Bar-Ilan University and an LLB from Tel-Aviv University.• Gadi Levin- Chief Financial Officer• Gadi is a chartered accountant with many years of experience in the public and private equity markets. His experience spans multiple jurisdictions including South Africa, England and Israel. He has a Bachelor of Commerce degree in Accounting and Information Systems, has received his Chartered Accountant designation in South Africa and has an MBA from Bar Ilan University in Israel.• Glen Perry - Vice President Exploration• Glen has 40 years of exploration and development experience, specialized in drilling operations and project execution. Masters in Petroleum Engineering. Served as a Director, COO and President of Zion Oil and Gas in Israel. Prior experience includes; Consultant to Delek Drilling; Director of National Petroleum; Executive with Prairie Producing Company, Exxon and Energy Reserves Group.• Moshe Politi - Chief Geologist• Moshe has 39 years of experience, specializing in the integration of multi-disciplinary aspects and methodologies of geology and geophysics into viable prospects in various environments: onshore, offshore, shallow and deep prospects, structurally complex (overthrust) and stratigraphic plays. Moshe received his Bachelor and Master Degrees in Geology from The Hebrew University in Jerusalem and is currently engaged in his PhD studies in Jerusalem.• Alon Polishuk - VP of Contracts Administration and Regulations• Mr. Polishuk brings over five years in Government Services of Israel, managing and co-coordinating mission critical programs and projects. He has extensive experience in project management, business development and expertise in legal analysis and critical examination. Mr. Polishuk specializes in Law and was admitted to the Israel Bar in 2001. He holds a BA, Business (Finance) from the Arison School of Business, as well as LLE, Radzyner School of Law, Interdisciplinary Center, Herzliya.• Alan Friedman - Executive Vice President - Corporate Development, Director• Colin Kinley – Senior Advisor, Director 5
  6. 6. Israel Petroleum Licenses TSX.V: ADL 398 MMBL (C) 989 BCF 277MMBL 144 MMBL ( C ) 3.5 TCF 6
  7. 7. TSX.V: ADL Adira Current Resource Summary – Offshore* (Gabriella and Yitzhak Licenses)Hydrocarbon Classification Best Estimate (P50) GrossOil (44- 47 API) Contingent (Gabriella) 277 MMBOOil (44- 47 API) Prospective (Yitzhak) 20.4 MMBOGas Prospective (Gabriella) 3.56 TCFGas Prospective (Yitzhak) 989 BCFCondensate Prospective (Gabriella) 398MMBOCondensate Prospective (Yitzhak) 144 MMBO* As referred to in the Gustavson Associates NI 51- 101 Technical Reports titled “Report for License #378 / Gabriella, Offshore Israel”,dated September 06, 2011 and “Report for License #380 / Yitzhak, Offshore Israel”Notes:MMBO = Millions of BarrelsMMBOE = Millions of Oil Equivalent 7
  8. 8. Peer Discoveries & Prospects, Israel TSX.V: ADL Initial reserves 35BCM (1.2Tcf, 213mmboe) Timeline Operational since 2004, expected depletion in 2013 MARI- B Annual Production Capacity 3-4BCM Participants Delek Drilling (25.5%), Avner (23%), Delek Group (4.4%), Noble Energy (47.1%) Operator Noble Energy Resource 8.7 Tcf (1.45boe) Discovery Date Feb-09 Expected start-up 2013 Expected peak gas production (Phase 1,000-1200MMcf/day TAMAR 1) 5,000m Total Depth Delek Drilling (15.5%), Avner (15.6%), Noble Energy (36%), Isramco (28.8%), Dor Gas Participants (4%) Operator Nobel Energy Resource 16Tcf (2.9boe) Discovery Date Dec-10LEVIATHAN- Gas Total Depth 17% (estimated) Participants Delek Drilling (22.7%), Avner (22.7%), Noble Energy (39.7%), Ratio (15%) Operator Noble Energy Resource 1 3bn Barrels (expected) Depth 5,800m Probability 17% (Estimated)*LEVIATHAN-Oil Resource 2 1.2bn Barrels (expected) Total Depth 7,200m Probability 8% (estimated) Resource 1 Gas 6.5 TCF Depth 3,700m Probability Mean value, NSAI report*SARA & MYRA Resource 2 Oil 150 MMBL Total Depth 5,500m Probability Mean value, NSAI report Resource 1 Oil: Bravo 127 MMBBL; Yam 142 MMBBL Depth 5,700m Probability Mean value, NSAI report *SHEMEN Resource 2 Gas: Bravo 127 BCF, Yam 142 BCF Total Depth 3,000m Probability Mean value, NSAI report 8 * Resource not proven
  9. 9. TSX.V: ADLLicense Overview: Offshore & Onshore Israel Gabriella (96,371 Acres) - Offshore Target: Oil Jurassic Fractured Carbonates: 4,900m Target: Gas Cretaceous limestone and sands: 2,700m Miocene stratigraphic: 1,950m Target: Condensate Cretaceous limestone and sands: 2,700m Miocene stratigraphic channel delta fill: 1,950m Exploration: 511 Km Dual Axis 3D completed Jan 2011 Drilling: Shallow water 140 to 200 meters Yitzhak (31,629 Acres) - Offshore Target: Oil Jurassic - Fractured Carbonates: 4,600m Target: Gas Cretaceous carbonates and sands: 2,300m Target: condensate Cretaceous carbonates and sands : 2,300m Exploration: 129 Km 3D completed Jan 2011 Drilling: Shallow water 140 to 200 meters Samuel (89,205 Acres) - Offshore Target: Oil Lower Cretaceous Carbonates Target: Gas Plio/Pleistocene, Oligo/Miocene, Turbidites Canyon Sands: 2,000m Exploration: 45 Km2 3D (OBC) completed July 2011 Drilling: Shallow water 40 to 100 meters Eitan (31,060 Acres) - Onshore Hula Valley Target: Gas Pleistocene Sands, Lumachelle Conglomerates: 200m Target: Gas CBM - Lignite and Sub-Bituminous Coal, 40m thickness @ 600m Target: Gas CBM – Sub- Bituminous Coal, 20m thickness @ 1,000m Exploration: 42 previously drilled wells (5 BCF Pr,2P 40BCF)*Not NI-51Compliant 9 Drilling: Wheeled access (Company owned rig)
  10. 10. TSX.V: ADL Gabriella License: Offshore (96,371 Acres) Technical Highlights P50 (Best Estimate) Contingent Oil : 277MMBO P50 (Best Estimate) Prospective Condensate: 398 MMB P50 (Best Estimate) Prospective Gas: 3.56 TCF Target: Oil Jurassic Fractured Carbonates: 4,900m Target Gas: Cretaceous limestone and sands: 2,700m Miocene stratigraphic: 1,950m Target: Condensate Cretaceous limestone and sands: 2,700m Miocene stratigraphic: 1,950m Exploration: 511 Km Dual Azimuth 3D completed Jan 2011 by Adira (WesternGeco), Processing underway by CGG Veritas Resource Report: Completed September 2011 by Gustavson Associates Prior Drilling: Yam Yafo-1 Well :Drilled in 90’s to 5,823m, tested 500 bopd (44-47 API) Drilling: Shallow water 120 to 200 meters. Jack-Up or Floater Operator: Adira Energy 15% Working Interest plus 15% back-in option from Modiin Energy, at cost. Approximate 10% ORRI Partners: Brownstone Energy 15%, Modiin Energy 70%Gabriella Structure- Depth 10
  11. 11. TSX.V: ADL Yitzhak License: Offshore (31,689 Acres) Technical Highlights P50 (Best Estimate) Prospective Oil: 20.4MMBO P50 (Best Estimate) Prospective Condensate: 144MMB P50 (Best Estimate) Prospective Gas: 989BCF Target: Oil Mid Jurassic , Zohar- Fractured Carbonates: 4,600m Target Gas Cretaceous Talme Yafe carbonates and sands: 2,300m Target: Condensate Cretaceous Talme Yafe carbonates and sands: 2,300m Exploration: 129 Km 3D completed by Adira (WesternGeco), processing underway by CGG Veritas Resource Report: Completed September 2011 by Gustavson Associates Prior Drilling: Delta-1 Well drilled (off structure) in 1970’s to 4,423m, TD in Upper Jurassic where oil encountered in Mid Jurassic (Yam Yaffo1 and Yam 2) Zohar formation tested for oil in Yam Yafo-1 (4,890m – 4,995m) and Yam-2 Well (5,315m) interesting & significantYitzhak Structure- Depth structural high Drilling: Shallow water 140 to 200 meters. Jack-Up or Floater Operator: Adira Energy 85% Working Interest – Partner Brownstone Energy 11
  12. 12. TSX.V: ADL Gabriella & Yitzhak Structures Yitzhak StructureGabriellaStructure East Mediterranean Structural Ridge Yitzhak
  13. 13. TSX.V: ADL Samuel License – Offshore (89,205 Acres)Target: Oil Lower Cretaceous Carbonates at 3,200mTarget: Gas Plio/Pleistocene, Oligo/Miocene, Turbidites, Canyon Filled Sands: 2,000mExploration: 45 Km2 3D OBC (Ongoing) (ARIS Nefterazvedka) Existing 2D indicates presence of DHIProcessing: Ongoing-IOX-CXTPrior Drilling: Yam-2 Well immediately west tested oil in Jurassic, Ashdod oil field in Jurassic, Heletz oil field (Lower Cretaceous)Drilling: Shallow water 40 to 100 metersOperator: Adira GeoGlobal (Adira Lead)Working Interest: 38.25%Partners: Brownstone Energy 6.75%, Pinetree Capital 10%, GeoGlobal Resources 45% A B DHI A B 13
  14. 14. TSX.V: ADLEitan License- Onshore, Hula Valley(31,060 Acres) Target: Gas Conventional Gas: Pleistocene Sands, Lumachelle Conglomerates: 200m Target: Gas Unconventional Gas: Pleistocene, Lignite and Sub- Bituminous Coal, 40m thickness @ 600m and Bituminous Coal, 20m thickness @ 1,000m Exploration: 5 BCF Proven and Probable (2P) and 40 BCF 3P – Not NI-51 Compliant, 143 Km 2D Seismic – Reprocessed coring and testing currently underway Prior Drilling: 42 previously drilled wells, Coal prior tested at 200 scft Drilling: Wheeled access (Company owned rig) Operator: Adira Energy Working Interest: 100% 14
  15. 15. TSX.V: ADLRisk ReductionSeismic Operations by Multi-Tier Professional Quality Control Acquisition Processing InterpretationDesign & Adira Energy internal professional team and advisorsmanagementQC Monarch Geophysical Services – QA/QC Adira Energy team Western Geco – “Quick look”Gabriela & Adira Energy team Western Geco – 3D CGG/Veritas – main and advancedYitzhak Gustavson – Colorado processing Netherland Sewell &Samuel ARIS – 3D (OBC) ION-GXT Associates - Houston 15
  16. 16. TSX.V: ADLAdira Energy Milestones & Guidance Gabriella Yitzhak Samuel License License LicenseAcquired existing 2D seismic data,reprocessed and evaluated   Complete preliminary detailed resourcereport & submit to Israeli Government   Complete “Quick look” processing  Western Geco Not ApplicableComplete 3D Survey   Evaluation of prospects for drilling Underway Underway UnderwaytargetsDetailed Drilling Planning: Prioritizedby prospect & commodity delivery Underway Underway Underway  Complete resource evaluation and Ongoingrisking from fast track processingProcessing (main & advanced) Ongoing- CGG Veritas Ongoing- CGG Veritas Ongoing- IOX-CXTStrategic selection & leveragedparticipation in new license/permit Ongoing Ongoing OngoingapplicationsProcessing 3D and incorporation intoHydrocarbon Potential Reports Planned Planned PlannedProcure drilling contractor, Expected Mid- 2012 Expected Mid- 2012 Expected Mid- 2012supplies/servicesFirst well Q4 2012- Drilling Expected to Commence – 3 Wells to be Drilled Consecutively 16
  17. 17. TSX.V: ADLStrategy – Shallow Water, Large Targets Capitalizing on Israel’s Immediate Demand for O&G Lower Risk Offshore Drilling • Target shallow water bench drilling • Lower drilling costs vs. competitive deep water exploration in the region • Operate at less than 1/3 the cost of deep water rigs drilling in Israeli waters • Correspondingly AFE’s and risk are lower High Resource Potential – Oil and Gas • Strategic selection of licenses with proven, prior analogous production and exploration • 2D and now 3D seismic has already been completed on Gabriella and Yitzhak • 2D complete on Samuel, and 3D completed Lower Infrastructure Costs – Near Market • Yitzhak and Gabriella both offer significant oil targets that can be exploited at a fraction of costs vs. deep water - increasing netbacks to interest holders • Gas targets on Samuel are below current pipeline infrastructure • Deliveries to market has less operational, environmental & financial risk vs. deep water targets. Delivery to market before deep water developments is achievable Economic Focus • Oil from shallow well locations are more economically viable than deep water wells • Shallow gas targets on Samuel said to have better economics/molecule than deep water • Deep water gas have higher infrastructure costs, high pressure & highly technical delivery parameters & long time delivery market • Significant gas and oil close to market and infrastructure 17
  18. 18. TSX.V: ADLLicense PartnersBrownstone Energy Inc: A Canadian-based, TSX-V listed, energy-focused company with direct interests in oil and gas assets around the world. Brownstone has the right, subject to certain conditions, to earn a 15% Working Interest in Adira’s offshore blocks for three years.Pinetree Capital Ltd: A Canadian-based TSX listed diversified investment, financial advisory and merchant banking firm focused on investing in early stage resource companies. Pinetree has a 10% Working Interest in the Samuel block.GeoGlobal Resources Inc: GGR is an AMEX listed, Canadian- based resources and operating company engaged in the exploration for and development of petroleum and natural gas reserves internationally. GGR has a 45% Working Interest in the Samuel block.Modiin Energy LP/GP: A substantial Tel Aviv- based oil and gas investment group. Modiin has farmed-in a 70% interest in the Gabriella License. Modiin carried Adira for the first US$8 million in exploration funding on Gabriella. Adira has a back-in option from Modiin of 15% of the Modiin working interest at cost, for a period of six months after a discovery.  Adira operating royalty from Modiin of 3.75% for 24 months, increasing to 4.25% thereafter  Combined (ORRI ) royalty of 4.5%, increases to 10.5% after cost recovery 18
  19. 19. TSX.V: ADLAdira Energy - TXS.V: ADL(OCTBB-US – ADENF, Frankfurt – AORLB8) Capital Structure, June 2011 Shares Issued & Outstanding 101.2M Warrants 19.5M ESOP 8.9M Fully Diluted Shares 129.6M Financings to Date Proceeds ◦ 8.0m units at $0.25 (half warrant at $0.50) Sept 2009 ◦ Warrants expire August 31, 2011 $2.5M USD ◦ 27.5m units at $0.40 (half warrant at $0.55) Nov 2010 ◦ Warrants expire December 2013 $11M USD Feb 2011 ◦ 10.5m shares at $0.62 $6.5M CAN 19
  20. 20. TSX.V: ADLWhy Adira Energy? Unique Opportunity to Participate in Significant New Israeli Oil & Gas Discovery Fields. • Significant License Portfolio • World Class Technical Expertise • TSX-V Listed: Access to Global Capital • Local Israeli Operations Office and Team • Strong Technical and Financial Partners 20
  21. 21. TSX.V: ADLContact InformationCorporate Office: Canada: Alan FriedmanCanada Exec. Vice President, Corporate Development120 Adelaide Street West, Suite 1204 +1 416 250 1955Toronto, OntarioM5H 1T1 Julia Maxwell Manager, Investor RelationsIsrael Office: info@adiraenergy.com12 Abba Hillel Silver, 12th Floor +1 416 361 2211Ramat Gan, 52506 Israel: Gadi Chief Financial +972 (0) 3 373 0166 21
  22. 22. TSX.V: ADLAppendices 22
  23. 23. TSX.V: ADLAppendix 1Israel: Economic Miracle in the Middle EastFinancial Stability: • 2010: Israel accepted as a full member of the Organization for Economic Cooperation (OECD) • Israel reclassified as a DEVELOPED market by MSCI • Ranked highest in the region on the World Banks Ease of Doing Business Index as well as in the World Economic Forums Global Competitiveness Report • Second-largest number of start-up companies in the world (after the United States) • Largest number of NASDAQ listed companies outside North America • Global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals - following years of prudent fiscal policy and a series of liberalizing reforms *CIA Intelligence ReportFiscal Strength:Standard and Poors Foreign currency sovereign credit - “A”, Long-term local currency rating to - “AA” • Inflation: 4.1% for the last 12 months *Bank of Israel – July 2011 • Growth: Estimated at 5.2% in 2010 and 3.8% in 2011 *Bank of Israel – July 2011 • Employment : Estimated at 5.8% Unemployment in 2011 *Bank of Israel – July 2011 • Land: 22,100 Sq. Km *2009 OCDE • Population: 7.3 Million *2009 OCDE • GDP: Growth 4% in 2008, Grew by 0.5% in 2009 Expected to expand in 2010. DP is 45% Exports. *CIA Intelligence Report 23
  24. 24. TSX.V: ADLAppendix 3Capitalizing on Undiscovered Potential: Levant Basin 24
  25. 25. TSX.V: ADLAppendix 2Cross Section of The Levant Basin• Located off Israels Mediterranean coast, encompasses an area of 83,000 square km with waters up to 1,700m deep, and mostly within Israeli territorial waters• The first commercially viable discovery in Israel was made in 1999 with the Noa/Mari B fields (Yam Tethys partnership) and began production in 2004 Schematic of subsurface showing the Tamar and Leviathan discoveries SE 25
  26. 26. TSX.V: ADL Israel Oil & Gas Demand/SupplyFigure 1: Gas supply from Mari B, Tamar, Leviathan; Israeli gas demand Figure 2: Israeli oil demand largely met by imports Source: UBS 26
  27. 27. TSX.V: ADL Appendix 4 Current Oil & Gas Production Israel• Heletz Oil Field - During the 1950’s, Israel discovered this on-shore field. Over the past 50 years it has produced cumulative 20 million barrels of Oil. It is essentially fully depleted.• Yam Tetis Field - The country’s only current domestic gas source. The Ministry of Infrastructure expects it to be fully depleted in the next decade. The field’s .85 TCF was the largest find in the country, before Tamar.• EMG Consortium - An agreement for gas from Egypt to Israel provides for the sale of 1.7 billion cubic meters of gas per year, representing 20% of Israeli electricity current consumption ($5.50 - $5.75) per MMBt.Israel Recent Discoveries• Tamar (January 2009). Delek/Noble Energy (NYSE: NBL) Consortium made a significant discovery of natural gas (approx. 8.4 TCF) off Haifa. This is a world-class discovery and as such has created increased drilling activity and significant investor interest in the region.• Dalit (March 2009). Following Tamar, a second natural gas discovery offshore Israel identified more than 110 feet of net pay approx. 0.5 TCF). With the successes at Tamar and Dalit, a potentially substantial new resource basin with large remaining exploration potential opened up. Additional 3D in the area in the second half of 2009 with potential for additional targets. Dalit is situated approx. 55 km northwest of Gabriella and 45km northwest of Yitzhak.• Leviathan (December 2010). Nobel recently announced the Leviathan gas discovery, West of Tamar, estimated at over 16 TCF of gas. The well halted for additional liner casing as it is being deepened for potential deeper oil targets. Leviathan is the largest gas discovery ever in Israel, and the largest offshore gas discovery in the world over the past decade.• Mari – B (Production in 2003) First meaningful discovery was made in 1999, in the Yam Tethys field, which comprises the “Mari B” and “Noa” reserves. Located off Israel’s southern coast, the field originally had estimated reserves of perhaps 35bcm or 1.24 TCF. Gas started flowing in 2004 (via a 42km pipeline to the southern coastal town of Ashdod) and annual production capacity is currently around 3.6 BCM, or 60% of Israel’s natural gas requirements. In December 2010, Mari B had remaining reserves of 10.4 BCM. Mari B is expected to be depleted in 2013. 27