UPDATE: Israel's Pinnacle Well Will Begin Producing Gas In July

Two Israeli energy companies, Avner Oil and Gas Ltd. Partnership (AVNR.L.TV) and Delek Drilling Ltd. Partnership (DEDR.L.TV), said Monday that one of their small exploration wells will begin producing natural gas in July and help meet Israel's energy needs until their larger reserve, Tamar, is able to start production next year.

The Pinnacle 1 exploration well will begin producing gas in July, just as Israel's only active gas reservoir, Yam Tethys, is being depleted. The Pinnacle well likely contains up to 1.3 billion cubic meters of natural gas, according to a survey by Netherland Sewell & Associates Ltd.

The Tamar reserve contains at least 9 trillion cubic feet of natural gas.

Due to disruptions in the supply of natural gas from Egypt, following several attacks on the pipeline in the Sinai peninsula after the fall of president Hosni Mubarak, Israel has had to rely more heavily on diesel and other forms of energy. As a result, electricity prices have risen and are likely to rise more this summer, according to the government.

Houston-based Noble Energy Inc. (NBL) partially owns the Pinnacle 1 well and the Tamar reserve along with Avner, Delek Drilling and several other smaller Israeli companies.

Israel's energy supply continues to be a major concern for both the government and private sector.

In a meeting with Noble executives Monday, Israeli prime minister Benjamin Netanyahu said the construction of a second natural gas processing terminal on Israel's coast is essential for the country's energy security and the stability of energy companies operating here, according to a statement from Netanyahu.

The Noble executives told Netanyahu that they are making every effort to meet or even beat the April 2013 target date for gas production to start at the Tamar field.

Monday, shares of Delek Drilling closed up 0.23 shekels, or 1.62%, at ILS14.40 ($3.89), and shares of Avner closed up ILS0.017, or 0.67%, at ILS2.56, in a higher Tel Aviv market.

-By Sara Toth Stub, contributing to Dow Jones Newswires, [e-mail]