Adira has signed a definitive co-operation agreement with Geo Global Resources confirming the terms whereby GGR has agreed to assign an option it has to acquire up to a 5% participating interest in each of two deepwater licenses offshore Israel known as Petroleum Licenses 347 "Myra" and 348 "Sara," to Adira (the "M&S Options").
GGR presently is registered as a 5% participating interest holder in each of the "Myra" and "Sara" Licenses, by virtue of its operatorship of these licenses. GGR has an option to acquire a further participating interest of 5% in each of the licenses from the below mentioned consortium, for an additional consideration of US $1,200,000 combined, plus prorate share of costs related to the licenses from the date upon which GGR acquired the M&S Options, until the date at which the M&S Options are exercised (not expected to exceed US $250,000) ("Option Consideration"), subject to certain terms and conditions. This option has been assigned to Adira and in order to exercise such option, Adira will be required to pay the Option Consideration and comply with the terms and conditions.
The Myra and Sara licenses are located in the Levantine Basin which is located off the western coast of Israel in the Mediterranean Sea, in waters approximately 1,400 meters deep, approximately 35 km from the recent 8.4 TCF Tamar 1, Tamar 2, and adjacent to the 0.5 TCF Dalit natural gas discoveries by the Noble Energy consortium. The Sara license covers an area of approximately 404 square kilometers (156 square miles) and the Myra license covers an area of approximately 396 square kilometers (153 square miles).
3D seismic data for Myra and Sara has been shot, acquired, and processed. The 3D seismic data in respect of the Myra and Sara licenses has been submitted to the Ministry of National Infrastructures ("MNI"). The initial interpretation of the results of the 3D seismic data was completed and a report submitted to the MNI on 1 August 2010. It is expected that the during the remainder of 2010 the following will occur: an initial prospect on each license is to be prepared during September 2010; a report on the hydrocarbon system on the licenses by October 2010, and final preparation of the prospects, together with well plans should be completed by December 31, 2010, all as per the agreed work program in the license awards. A contract with a drilling contractor is expected March 31, 2011 followed by an expected spud date of Q3 2011.
The Myra and Sara licenses before the exercise of the M&S Options are held by a consortium of owners comprising of Emmanuelle Energy Ltd. (24.161% participating interest) Emmanuelle Energy - Gas and Oil Explorations Limited Partnership (19.161% participating interest), Modiin Energy - Limited Partnership (19.282% participating interest) (Adira Energy's participating interest partner of the Gabriella License), I.P.C. Oil and Gas (Israel), Limited Partnership (13.609% participating interest), The Israel Land Development Company Ltd. (5% participating interest), IDB Development Corporation Ltd. (5% participating interest), Blue Water Oil & Gas Exploration Ltd. (8.787% participating interest), GeoGlobal Resources (India) Inc. (5% participating interest and Operator).
Ilan Diamond, CEO, stated, "We are delighted to have this opportunity to participate in the Myra and Sara licenses. We feel that these licenses have the potential to be world class discoveries and look forward to being able to make a significant contribution to the consortium. We believe that Adira is well positioned with interests in five offshore licenses (2 deep water and 3 shallow water) and two onshore licenses. This balanced portfolio of assets should give us the opportunity to create substantial value for Adira shareholders."
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