Avner Oil - Annual Report 2011 - Delek Energy Systems

Noa leasePeriodSummary of the operations performed in theperiod / summary of the planned work plan2009 • Appraisal of the development feasibility of theNoa reservoir2010 • No significant operations were performed inthis period2011 • As part of the development of the Noa Northreservoir (as defined below), two productionwells were drilled, Noa 2 and Noa 3.2012 onwards • Continuation of development works at theNoa North reservoir, including completion ofwells, installation of pipelines and connectionto the Yam Tethys project, and start ofnatural gas production• See section ‎7.3.5(B) below for furtherinformation about the development plan inthe Noa lease.Actual totalcost/estimatedtotal budget foroperations onthe level of theoil asset (USDthousands)ThePartnership'seffective shareof thecost/budget(USDthousands)216 61- -75,173 20 08,171136,877 90,838(B)Forward-looking information: The above estimate of the Partnership regarding costs andschedules of the planned operations in the Yam Tethys project is forward-lookinginformation, as defined in the Securities Law, based on assessments made by the generalpartner regarding the cost components of the project, which are based on assessments thatthe general partner received from the operator. Actual schedules and costs may differ fromthe above estimate, and are contingent, inter alia, on completion of detailed planning of theproject components, applicable regulation, bids from contractors, changes to global suppliersand raw material markets, and the implementation of this these operations.Development plan for the Noa leaseOn June 12, 2011, the Commissioner informed the project operator that he approves thedevelopment of the northern part of the Noa field ("Noa North"). The Commissioner alsoaccepted the operator's assessment (according to the information presented to him) thatthere is a low probability that significant quantities of gas will migrate to the Noa Northreservoir from other parts of the reservoir extending further to the south and southwest. Inaddition, the Commissioner limited the total quantity of gas produced to the amount in theNoa North reservoir, which the operator estimates at 1.2 BCM, to prevent allegations of gasproduction from other parts of the reservoir extending beyond the lease area.On July 31, 2011, the Partnership approved the budget and development plan for the NoaNorth reservoir in the Noa Lease, according to the outline presented by Noble ("thedevelopment plan").Development of the Noa North reservoir will provide additional supply of natural gas to theIsraeli market, mainly to customers that have signed agreements with the Partnership for thesupply of natural gas, until gas supply from the Tamar project commences.The development plan includes mainly drilling of two diagonal production wells with subseacompletions, Noa 2 and Noa 3, to a vertical depth of 1,880 m (including a water depth of 800m). The drillings will be completed subsea, which the operator believes will allow productionof 100 MMcf/d of natural gas from both wells The natural gas will flow through a pipeline tothe Mari-B production platform for processing, and then through the existing 30-in pipeline tothe Yam Tethys receiving terminal at Ashdod.20The amount does not include USD 12,962 thousand (the Partnership's share is USD 2,981 thousand) for a provisionfor future dismantling costs developing drilling in the lease.A-18