Technical Overview

Petromed is spending significant time reviewing the seismic and regional geology of the East Mediterranean region and can confirm that it has high potential prospectively with a large number of interesting leads spread over the survey region, together with extremely favourable hydrocarbon generation potential.

Following the earlier regional reviews, a much more detailed seismic interpretation and lead review is presently taking place covering the data of Israel Offshore. The targeted areas are also close to economical and currently producing large hydrocarbon discoveries and proven product markets. The region is almost entirely unexplored with few licenses granted to date.

The main discoveries to date in the region have been the spectacularly large gas discoveries by British Gas and partners in the shallower Pliocene section of the Nile Delta and Offshore southern Israel (Noa, Mari, Gaza Marine).However, there have also been several wells that have also discovered significant condensate volumes, as well as one or two offshore Israel which have also discovered significant Oil, these have not been widely publicized, and give huge encouragement for the future discovery of large oil deposits offshore Israel.

At the same time from the new seismic information we now know the basin geometries are much larger, thicker and deeper than was previously thought, particularly in the Levantine basin and around the Latakia thrust front complex where many structural leads are observed.

These deeper basins have not yet been drilled. The closest deep wells in the region that have been drilled the last few years are in the outer Nile Delta in the deepwater Nemed block (recent Shell wells).

While the deeper water depths would require significant gas volumes to be commercially attractive, there are also good leads in the shallower water depths. We also believe the deeper plays and leads in the region are more likely to contain oil, and are viewing the deeper water leads as mainly oil or oil condensate and some gas. In addition the seismic data shows there is the potential for very large structures to be present in the region.

The noticeable thickness of the basins, and early simple 1D basin modelling indicate that there are likely to be oil, condensate and gas systems present throughout the region. This is confirmed by the presence of surrounding oil, gas and condensate discoveries, and the commercially available natural oil seep studies that have indicated widespread natural oil seepages to be present in the project area.

Thus the region can be considered an almost virgin exploration province with extremely large hydrocarbon potential.

The targeted areas are also close to economical and currently producing large hydrocarbon discoveries and proven product markets.