Isramco

Isramco is an Israeli oil and natural-gas exploration and production partnership best known for its participation in offshore energy projects in the eastern Mediterranean. The business described by the Isramco name includes Isramco Negev 2 Limited Partnership, a publicly traded master limited partnership whose units trade on the Tel Aviv Stock Exchange, as well as affiliated entities established to manage the partnership and related exploration activities. The partnership was formed in 1989 after the dissolution of the earlier Negev 1 exploration partnership and was created to continue the search for commercially viable oil and gas resources in Israel. The company’s origins reach back to 1982, when Jerusalem-born businessman Joseph Elmaleh founded Jerusalem Oil Exploration Ltd., commonly known as J.O.E.L. Elmaleh also established Isramco Inc. with oil-industry veteran Armand Hammer; J.O.E.L. held a 35 percent interest in that joint venture. Isramco Inc. drilled several wells in Israel between 1982 and 1985, but the wells produced only limited quantities of oil and did not sustain commercial production. A successor venture, Negev 1 Limited Partnership, was formed in 1985 with participants including J.O.E.L., Delek–The Israel Fuel Corporation and Naphtha Israel Petroleum Corporation. Negev 1 spent approximately $19.2 million on seismic work and drilling, but both of its wells were dry and the venture ended in 1988. Isramco Negev 2 was established in 1989 by substantially the same group of participants. Its initial exploration portfolio included the Negev Nirim and Negev Ashkelon licenses. The partnership conducted geological and seismic studies and drilled the Yam 1 and Yam 2 offshore wells. Financing came in part from the public offering of partnership units in Israel; sales during 1992 and 1993 raised approximately $123 million. The partnership subsequently received additional Mediterranean offshore licenses, including Med Tel Aviv, Med Yavne, Med Ashdod, Med Hadera and Med Hasharon. The Yam 2 well became a major turning point, but not immediately a successful one. Gas flares observed at the well in 1993 generated intense public enthusiasm and caused the partnership’s units to rise dramatically. In February 1994, however, Isramco announced that the discovery was not economically viable. The subsequent collapse in the unit price damaged investor confidence and contributed to a prolonged decline in enthusiasm for Israeli oil exploration. The episode also led to criticism that investors had been misled. Ownership and control around the wider Isramco group changed in the mid-1990s. In 1995, Elmaleh sold his controlling interest in J.O.E.L. and related subsidiaries, including Isramco Inc., Naphtha Israel Petroleum Corporation and Israel Oil Exploration Ltd., to Pass-port Ltd. Control of Pass-port and associated companies later moved to businessmen Haim Tsuff and Koby Maimon. Isramco Inc. expanded into United States oil and gas properties in 1997, while Isramco Negev 2 continued to focus on Israeli exploration. The partnership’s most important development was the Tamar natural-gas discovery. During the 2000s, it pursued offshore exploration with partners including Delek Group and BG Group. Three-dimensional seismic work conducted in 2001 indicated significant potential at the Tamar and Dalit prospects, although drilling was delayed after BG Group withdrew in 2005. Exploration resumed after Noble Energy joined the partnership in 2007. The Tamar 1 well was drilled in 2009 in deep water west of Haifa and confirmed a major gas accumulation estimated in the referenced material at approximately 8.3 trillion cubic feet. Isramco Negev 2 held a 28.75 percent interest in Tamar, with Noble Energy as operator at the time of discovery. In addition to Tamar, the partnership’s listed properties included a 50 percent interest in the Orr gas field. Isramco’s business model has therefore centered on holding exploration, development and production interests rather than marketing a broad range of consumer products. Its importance derives from its role in Israel’s offshore gas industry and from the transition of Israeli exploration from speculative drilling toward large-scale natural-gas development. The available reference material does not provide a current management roster, current headquarters, corporate website or a definitive account of the partnership’s present operating condition.

Isramco’s history is rooted in Israel’s long-running effort to identify commercially recoverable oil and natural-gas resources. In 1982, Joseph Elmaleh founded Jerusalem Oil Exploration Ltd. and formed Isramco Inc. with Armand Hammer. J.O.E.L. held a 35 percent stake in the joint venture. Isramco Inc. drilled four onshore wells between 1982 and 1985, but total production was only about 9,000 barrels and none of the wells achieved sustained commercial output. In 1985, Isramco and other participants established Negev 1 Limited Partnership. Its participants included J.O.E.L., Delek–The Israel Fuel Corporation and Naphtha Israel Petroleum Corporation. Negev 1 invested approximately $19.2 million in seismic exploration and drilling. Both wells drilled by the partnership were dry, the venture generated no revenue and its operations ended in 1988. Isramco Negev 2 Limited Partnership was formed in 1989 by the same general group of participants. The partnership initially held the Negev Nirim and Negev Ashkelon exploration licenses. It drilled the Yam 1 and Yam 2 offshore wells and conducted geological and seismic studies at a cost reported at approximately $44.55 million. Public sales of partnership units during 1992 and 1993 raised approximately $123 million, drawing substantial participation from small investors. In 1993, five more offshore licenses were granted in the Mediterranean: Med Tel Aviv, Med Yavne, Med Ashdod, Med Hadera and Med Hasharon. Gas flares observed at Yam 2 caused the partnership’s units to increase sharply, but the excitement ended when Isramco announced in February 1994 that the discovery was not economically viable. The collapse led to criticism of the company’s handling of investor expectations and weakened public interest in Israeli oil exploration. The wider corporate structure changed in 1995 when Elmaleh sold his controlling interest in J.O.E.L. and related subsidiaries to Pass-port Ltd. Haim Tsuff and Koby Maimon subsequently became associated with control of Pass-port, J.O.E.L., Naphtha and other Isramco-related companies. In 1997, Isramco Inc. expanded into United States oil and gas properties, while Isramco Negev 2 remained focused on Israel. Further Israeli exploration included the Gevim 1 onshore well, drilled in 1998 near Sderot to a depth of approximately 15,157 feet. The well was declared dry and cost approximately $6.6 million. During the following decade, the partnership continued offshore work with Delek Group and BG Group. BG-sponsored three-dimensional seismic studies in 2001 identified promising structures at Tamar and Dalit, but drilling was delayed after BG withdrew in 2005. Noble Energy joined the partnership in 2007, allowing exploratory drilling to proceed. The Tamar 1 well was drilled in 2009 approximately 80 kilometers west of Haifa in water about 1,700 meters deep. It confirmed a large natural-gas accumulation estimated in the reference material at 8.3 trillion cubic feet. At discovery, Noble Energy operated the project with a 36 percent working interest, while Isramco Negev 2 held 28.75 percent. Other participants were Delek Drilling, Avner Oil Exploration and Dor Gas Exploration. Tamar became the central asset associated with Isramco and a major milestone in Israel’s offshore gas sector. The referenced property list also identifies a 50 percent interest in the Orr gas field. In 2004, Isramco Inc. restated financial results for three quarters of 2003 following adoption of accounting requirements concerning asset-retirement obligations; the change reduced net income in each affected quarter. The partnership was reported as a TA-35 Index constituent from January 2010. Current executive information, headquarters, website and later operating developments are not established by the supplied reference material.

• 2010

  TA-35 Index inclusion

  [1]Isramcoen.wikipedia.org

  Isramco Negev 2 was reported as a constituent of the TA-35 Index from January 2010.

• 2009

  Tamar gas field is discovered

  [1]Isramcoen.wikipedia.org

  The Tamar 1 well confirmed a large offshore gas field west of Haifa.

• 2001

  Three-dimensional seismic work identifies Tamar and Dalit potential

  [1]Isramcoen.wikipedia.org

  Seismic studies indicated significant potential in the Tamar and Dalit offshore prospects.

• 1998

  Gevim 1 is drilled

  [1]Isramcoen.wikipedia.org

  The onshore Gevim 1 well near Sderot was drilled to approximately 15,157 feet and declared dry.

• 1997

  United States expansion

  [1]Isramcoen.wikipedia.org

  Isramco Inc. acquired interests in United States oil and gas properties.

• 1994

  Yam 2 discovery is deemed uneconomic

  [1]Isramcoen.wikipedia.org

  Isramco announced that the Yam 2 discovery could not be developed economically, reversing the prior surge in investor enthusiasm.

• 1993

  Additional Mediterranean exploration licenses are granted

  [1]Isramcoen.wikipedia.org

  The partnership received the Med Tel Aviv, Med Yavne, Med Ashdod, Med Hadera and Med Hasharon licenses.

• 1989

  Isramco Negev 2 is founded

  [1]Isramcoen.wikipedia.org

  The successor limited partnership was formed to pursue additional oil and gas exploration in Israel.

• 1988

  Negev 1 operations end

  [1]Isramcoen.wikipedia.org

  After two dry wells and no operating revenue, Negev 1 terminated its activities.

• 1985

  Negev 1 Limited Partnership is formed

  [1]Isramcoen.wikipedia.org

  The first Negev partnership was created to continue Israeli oil and gas exploration after early Isramco drilling failed to establish commercial production.

• 1982

  J.O.E.L. and Isramco Inc. are established

  [1]Isramcoen.wikipedia.org

  Joseph Elmaleh founded Jerusalem Oil Exploration Ltd. and formed Isramco Inc. with Armand Hammer.

An Israeli exploration and production partnership focused on offshore natural gas and other hydrocarbon assets, with a history spanning high-risk exploration, public-market fundraising and participation in the development of Israel’s eastern Mediterranean gas resources.

• Offshore natural-gas asset · 2009

  Tamar gas field

  Tamar is Isramco’s principal referenced asset and the partnership’s most important exploration success. The field lies approximately 80 kilometers west of Haifa in deep Mediterranean waters. The Tamar 1 well, drilled in 2009, confirmed a large natural-gas accumulation estimated at approximately 8.3 trillion cubic feet in the supplied reference material. Isramco Negev 2 held a 28.75 percent interest at discovery, while Noble Energy operated the field.

• Natural-gas asset

  Orr gas field

  Orr is identified in the referenced property list as a gas field in which Isramco Negev 2 held a 50 percent interest. The supplied material does not provide further details about its location, development stage, reserves or production.

• Exploration portfolio · 1989

  Oil and gas exploration interests

  Isramco’s broader offering is not a consumer product line but a portfolio of exploration licenses, wells and working interests in hydrocarbon properties. Historical activities included onshore and offshore seismic studies, exploratory drilling and participation in partnerships covering Israeli Mediterranean prospects.

• 1994

  Yam 2 investor-communication controversy

  Gas flares at Yam 2 generated extreme market enthusiasm before Isramco announced that the discovery was not economically viable. The resulting collapse in partnership-unit value prompted criticism that investors had been misled and contributed to a broader loss of confidence in Israeli oil exploration.

  Source

Read more

• 2009

  Advance Tamar toward gas developmentProduct launch

  Background

  Exploration confirmed a large natural-gas discovery offshore from Israel.

  Action taken

  The Tamar partners moved from exploration toward development, with production and subsea pipeline delivery anticipated in the supplied reference material.

  Aftermath

  Tamar became the defining asset associated with Isramco and a major development in Israel’s offshore gas industry.

  Source

• 2007

  Bring Noble Energy into the offshore partnershipStrategy

  Background

  Tamar and Dalit prospects had been identified by seismic studies, but drilling was delayed after BG Group withdrew in 2005.

  Action taken

  Noble Energy joined the partnership and enabled exploratory drilling to proceed.

  Aftermath

  The Tamar 1 well confirmed a major gas accumulation in 2009.

  Source

• 1997

  Expand Isramco Inc. into the United StatesStrategy

  Background

  Isramco Inc. sought to broaden its oil and gas asset base beyond Israel.

  Action taken

  The company acquired interests in several United States oil and gas properties.

  Aftermath

  Isramco Inc. later focused on United States activities while Isramco Negev 2 continued Israeli exploration.

  Source

• 1989

  Create a successor exploration partnershipStrategy

  Background

  The Negev 1 partnership had ended after drilling dry wells and generating no revenue.

  Action taken

  The same general group of participants formed Isramco Negev 2 to continue exploration in Israel.

  Aftermath

  The new partnership obtained exploration licenses and pursued offshore drilling, eventually becoming associated with the Tamar discovery.

  Source

1. 1Isramcoen.wikipedia.org