Jerusalem (Platts)--3Jan2013/811 am EST/1311 GMT

Israel's offshore gas potential continues to grow as a group of Norwegian and Israeli drillers said they have made a discovery with the Aphrodite-2 exploration well in the Ishai license block.

Norway's AGR, the operator of the well, said Thursday that "significant signs of natural gas" had been found in the lower Miocene sands.

It said the well was drilled to a depth of 5,187 meters below sea level and that the thickness of the net gas-bearing layer is approximately 15 meters.

"[We] have performed various tests whose results attest that the layers contain natural gas," AGR said in a statement.

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"These preliminary results and their analysis clearly indicate the existence of natural gas in the well," it said.

AGR said it would now perform processing and evaluation of the information collected.

AGR is operator, holding a 5% stake in the five Pelagic licenses of Ishai, Aditya, Lela, Yahav and Yoad.

Its partners are Israel Opportunity with 10%; Nammax Oil and Gas Ltd. owned by Israeli businessman Benny Steinmetz with 42.5%; and two companies owned by Israeli businessman Teddy Sagi, Frendum Investments Ltd. and Daden Investment Ltd. with a combined stake of 42.5%.

'FINAL ASSESSMENT'

In a separate statement late Wednesday, Israel Opportunity also said the well had shown signs of having substantial gas volumes.

"We will have to await the final assessment that is likely to take about two months before the size of the discovery can actually be determined," Israel Opportunity CEO Eyal Shoker said.

Drilling at Aphrodite-2, 160 km (99 miles) northwest of Haifa, began in early December. The license is adjacent to the Block 12 license in the Cypriot Exclusive Economic Zone and Israel's Leviathan field where gas has already been discovered.

Preliminary estimates prior to the drilling and based on a 3-D seismic survey put the potential in the Ishai license at 3.7 Tcf of gas with a 76.7% probability of success.

The high probability is based on the fact that the gas is believed to be an extension of the structure on the Cypriot side of the Exclusive Economic Zone.

In December, the US' Noble Energy and its Israeli partner Delek Group announced that Block 12 -- and the renamed Aphrodite find -- had potential resources of 5-7 Tcf.

However, a senior Noble official said recently that the potential may be substantially higher.

Israeli energy industry sources have said that if commercial quantities of gas are discovered then it would make sense to jointly develop the Ishai and adjacent Block 12 gas resources.

--Neal Sandler, newsdesk@platts.com
--Stuart Elliott, stuart_elliott@platts.com
--Edited by Maurice Geller, maurice_geller@platts.com

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