Givot Olam Oil Ltd., an Israeli petroleum exploration company, has signed a binding letter of intent with Shire International Ltd. who will invest in Givot Olam's Meged project.
In the first stage of the project, Shire will invest $50 million for five wells (including the Meged 5 well). In the second stage, development of the Meged field will continue until drilling and production are completed. The two companies will operate the project jointly.
Interaction between the two companies began with a meeting between Lou Shire, president of Shire International, and geologist Tovia Luskin from Givot Olam at a petroleum exploration conference.
Shire specializes in horizontal drilling that, according to experts, is the most efficient method for the reservoir discovered in the Meged field.
Every year, 30,000 horizontal drilling projects take place in USA and Canada.
Givot Olam is the only company that is licensed in Israel for oil drilling after it was described as a "commercial discovery."
Findings from Meged confirm the existence of an oil field spanning over 200 square kilometers (50,000 acres).