The most likely alternatives, in our view, are LNG in Cyprus, pipelines to neighboring countries (Turkey, Egypt, Jordan), or a combination, ” says Roni Biran.
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The share prices of Leviathan’s partners rose strongly in morning trading today: Delek Group Ltd. (TASE: DLEKG) and its gas exploration units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) all rose 2.4. Ratio Oil Exploration (1992) LP (TASE:RATI.L) rose 7.2%.
“We believe the Supreme Court decision improves Leviathan’s risk profile and should gradually lead to multiples-expansion. Despite the re-rating in the sector, we estimate current levels imply $2.00/barrel of oil equivalent (boe) for Leviathan, leaving ample upside on commercial de-risking. For comparison, we estimate Tamar (fully de-risked) to trade at $6.80/boe. Other areas of upside include oil prospects and untapped gas potential, ” adds Biron.
Biron says that Ratio, as a pure play company at Leviathan, has the best upside potential. He gives Ratio, Avner, and Delek Drilling “Buy” recommendations. Delek Group is unrated.
Published by www.globes-online.com