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Israel’s suspends trading in Givot Olam September 21, 2010

Posted by mytruthaboutoil in Oil (general), Oil trading.
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The Israel Securities Authority ordered the Tel Aviv Stock Exchange to suspend trading in Givot Olam participation units yesterday after a report from the oil and gas exploration firm was found to be unintelligible.

The watchdog explained that that they were unable to decipher what had or hadn’t been found from the final engineering report sent to it, ahead of a public announcement.

The partnership’s recent announcements to the investor public have also been unclear and uninformative. On August 22, the partnership held a shareholders assembly to answer questions about their results at the Meged-5 drill.

Tuvia Luskin, the partnership’s geologist, compared the Meged-5 exploration to the Israelites’ exodus from Egypt. “For years we were in the dark, with ‘signs of oil’ but no light,” he said. “Meged 5 is like the granting of Torah for us. It’s a revelation.”

Now, Givot Olam has been ordered not to publish the findings at this stage, and in an unusual move, the ISA ordered Givot Olam to publish, instead of the unclear report, another one that “lists all the omissions [presumably from the unclear report], and clarifies the findings and their implications for the partnership”.

“It sounds like a disaster,” an energy sector analyst said yesterday morning. “It’s good that the ISA is finally waking up, but it just means that again, Givot planned to issue a report to investors that said nothing.”

The fact that the partnership is not clearly divulging what it has found indicates that there is a problem, he added. It is questionable how long trading in the participation units can be suspended.

“Everywhere in the world, some drills fail. These things happen,” he said. “Even if the Meged-5 drill isn’t what they had expected, that doesn’t mean that the entire field can’t be productive. The problem is that Givot Olam whipped up expectations so high, regarding that specific well, deliberately or not, that it will be very hard for them to meet [these expectations].”

They were living on “borrowed credit” as far as investors were concerned, the analyst said: “If they disappoint this time, they’ll lose all the credit they had.”

The week before the assembly with Luskin, Givot Olam said that the estimated potential of Meged-5 was 1.53 billion barrels.

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