Delek Group reported today (Tuesday) on an update regarding Ithaca’s oil assets regarding significant petroleum signs in the Isabella well and the decision to perform exploratory drilling in the K2 field.
Ithaca updated that the French drilling operator Total gave it the information. The drilling has an initial depth of about 4,502 meters and the thickness of the layer is about 45 meters. The type of petroleum has not yet been determined. Total forwarded the information to Ithaca based on a petrophysical analysis of the logs during drilling.
Total intends to complete the data collection, examine the possibility of performing production tests, and seal and abandon the well. After that, the evaluation of the data will continue in order to establish the existence of a commercial potential for production. The final depth reached by the drilling is about 4,754 meters (TVDDS, and the amount of money spent up to the temporary abandonment is about 67 million pounds (100) Ithaca’s share 7.6 million pounds (10%).
According to the best estimate, the Isabella oil property has C2 contingent resources of approximately 49.3 million barrels of oil (MMBBL) and approximately 98.6 BCF (billion cubic feet) of natural gas (100%). The property is held by Ithaca (10%), the Total Energy Company, which serves as the drilling operator (30%), and other partners.
At the same time, Ithaca updated that a decision was made to conduct exploratory drilling in the 2K oil property, which is held by Ithaca (50%) and by Dana Petroleum (50%). Drilling is expected to begin in June-July 2023. The total cost of drilling (100%) in case of success is estimated at approximately 34 million pounds. According to the best estimate (which is accepted for examining oil and gas resources), the oil property 2K has predicted resources (U2) in the amount An estimated 74.6 BCF (billion cubic feet) of natural gas and about 3 million barrels of oil (MMBBL).
About two weeks ago, the analysts of the investment banks Goldman Sachs and Morgan Stanley published recommendations for the Ithaca stock: Goldman Sachs gave the stock a “buy” recommendation at a target price of 284 pence – which represents an upside of 51% compared to its price today (60% compared to the day the recommendation was issued). The Goldman analysts noted, among other things, that Ithaca is “one of the stocks with the most attractive investment return of 18.5%-19.4% in the years 2023-2024”. Morgan Stanley gave Ithaca an “overweight” recommendation, with a target price of 260 pence per share – representing an upside of 38% in relation to the current share price (50% in relation to the day the recommendation was issued).
Over the course of last week, the chairman of Ithaca, Gilad Meirson, increased his holdings in the Ithaca company to the extent of approximately 3 million dollars through the exercise of stock options, which were granted to him in accordance with the Ithaca option plan which was included in the prospectus. After the exercise, Meirson owns approximately 0.3% of the issued capital of Ithaca.