Tests Reveal Natural Gas In Sand At Isral's Leviathan Reserve

Israeli partners in the offshore Leviathan gas drilling project said Monday that tests have revealed natural gas in sands 5,100 meters below the sea.

Partners in the project, including Delek Group Ltd. (DLEKG.TV) subsidiaries Avner Oil and Gas and Delek Drilling (DEDRL.TV), and U.S.-based Noble Energy Inc. (NBL), have estimated that the Leviathan reserve contains 16 trillion cubic feet of natural gas, by far the largest energy reserve found in Israel.

The companies said tests will continue and they will make an announcement about the gas reserve in two weeks' time. The companies began exploratory drilling in the Leviathan reserve in October. Noble Energy and Delek are also partners in the Tamar offshore natural gas reserve, which contains commercially-viable natural gas. In response to both the Tamar and Leviathan discoveries, Israeli's finance ministry has proposed raising taxes and royalites that energy exploration companies pay the government. Noble and Delek have publicly opposed any change to the current tax scheme, which hasn't been updated since the 1950s.

At 1220 GMT, shares of Delek Drilling were up 0.42 shekels, or 2.98%, at ILS14.52 ($3.95), and shares of Avner Oil and Gas were up ILS0.12, or 4.67%, at ILS2.58, in a higher Tel Aviv market.

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