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Primorus Investments shares rise as SOA Energy lands Delek tie-up for Israel drilling

Published: 09:29 25 Mar 2019 GMT

oil and gas operations
Drilling could start this summer

Primorus Investments plc (LON:PRIM) advanced in Monday’s early deals as its investee company SOA Energy landed a farm-out deal with Israel energy group Delek Drilling which is investing up to US$8.3mln.

Delek Drilling, which is rumoured to be considering a London IPO, will cover up to US$6.5mln of the expected cost of an appraisal well and production test in SOA’s Ofek and Yahel licences in addition to US$1.8mln for back costs.

In return, Delek will receive a 25% non-operated stake in the licences – leaving SOA with 45% of each.

READ: Israel gas fields in spotlight as Delek reportedly mulls London spin-out

Primorus highlighted that the Delek deal enables an appraisal well at Ofek this summer, and, the programme can be expected to take around 40 days following the spud and a further 40 days of testing thereafter – thus setting up an active and potentially significant period for SOA.

“As an early investor in SOA we are now well placed to benefit from the farm-in and any uplift in the value of our investment resulting from delineating commercial hydrocarbon reserves and resources," said Alastair Clayton, Primorus executive director.

"This is a key unlock moment for our investment in SOA and we should be able to get a clear read on the uplift in value of our investment as SOA move to undertake a UK IPO in 2019 should the upcoming appraisal drilling work at Ofek prove to be positive."

Primorus holds 14,977 shares in SOA, purchased at £6.67 per share (an investment of around £100,000) back in 2017.

In London, Primorus shares rose 4.55% to change hands at 0.12p – earlier they traded at 0.13p, representing an 18% move.

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