Funds in place for Gabriella seismic program

Modiin Energy Limited Partnership and Modiin Energy General Partners (collectively `Modiin’) have fulfilled an initial obligation on the Gabriella license offshore Israel.

Offshore staff

TORONTO, Ontario -- Modiin Energy Limited Partnership and Modiin Energy General Partners (collectively `Modiin’) have fulfilled an initial obligation on the Gabriella license offshore Israel.

This involved paying S$2 million ($1.4 million) to license operator Adira Energy Israel for use in the re-interpretation of existing 2D seismic; preparation of a report on the block potential; and a planned 3D seismic acquisition program.

Under the agreement, Modiin has to fund both its share of the approved work budget (S$5.6 million or $4 million) and Adira’s portion ($1.2 million). Brownstone Ventures, which holds 15% of the license, will fund the remaining $1.2 million.

Modiin will also pay Adira a royalty of 4.5% on total wellhead revenue produced from any discovery until costs are recovered, thereafter increasing to 10.5%. Furthermore, Adira has an option to re-acquire 15% of the Modiin farm-in rights within six months of a discovery being made.

Adira Energy CEO Ilan Diamond said that once a report on the block’s hydrocarbon potential is complete, his company intends to sign a contract covering acquisition of 300-400 sq km (116-154 sq mi) of 3D seismic data, with a view to completing this before year-end.

The shoot would take in Adira’s Yitzhak, and Samuel offshore blocks as well as Gabriella, which extend from close to the Israeli coast out to 17 km (10.6 mi) offshore.

06/24/2010

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