Lack of Cash Forces Adira to Suspend Gabriella License Operation (Israel)
Adira Energy Ltd. announces that it is suspending operations on the Gabriella License, offshore Israel.
The company explained that “due to lack of funding and lack of reasonable expectation of funding by certain parties sufficient to pursue the current work program; lack of agreement among the license holders regarding how to proceed under the circumstances; and due to the fact that Modi’in Energy L.P. (“Modi’in”) has not met its obligations under the Joint Operating Agreement (the “JOA”) or under other agreements in place among the JOA parties.”
As the operator of the Gabriella License the Company’s obligation under the JOA is to exercise due care with respect to the receipt, payment and accounting of funds in accordance with good and prudent practices generally followed by the international petroleum industry under similar circumstances. The Operator cannot continue to engage service providers and providers of equipment and material, without sufficient cash in the joint account, and with no reasonable expectation of cash being provided by the license partners.
“As such, Adira has suspended operations on the Gabriella License. The Company continues to work with the all of its partners on the license to resolve these issues,” said Adira in a statement.
The Gabriella License is located approximately 10 kilometers northwest of Tel Aviv, in the waters offshore Israel. The block covers an area of approximately 392 square kilometers (97,000 acres) and is in water depths that range from 100 meters on the east side of the block to just over 425 meters on the southwest side of the block. Adira holds a 15% Working Interest in the Gabriella License and is the designated Operator. On March 13, 2012, the company announced it received an independent resource report prepared by Netherland, Sewell & Associates, Inc. which included a best estimate of 110.1 MMbbl of contingent oil on the Gabriella License on a gross unrisked basis
February 12, 2013