Modiin Energy Cancels Drilling Plans after Financial Dispute

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JERUSALEM - Israeli oil and gas company Modiin Energy L.P. said Monday that it has cancelled plans to drill for oil and natural gas in its offshore Gabriella license after a financial dispute with its partners.

Modiin owns 70% of the Gabriella license, with Adira Energy Corp. and Brownstone Energy Inc., both based in Canada, each having 15%.

Modiin said there was a dispute about who should finance the exploratory drilling and when the money should have been transferred.

The Gabriella license is estimated to contain 110 million barrels of oil and 1.8 trillion cubic feet of natural gas, according to a survey commissioned by Modiin.

Large amounts of natural gas have been discovered off Israel's coast in recent years. Production at the first of these large discoveries, Tamar, which contains 9 trillion cubic feet of gas, is expected to begin this year.

Copyright (c) 2012 Dow Jones & Company, Inc.

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