Bethel Finances: Ratio plans rights issue to cover Leviathan costs

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Bethel Finance news:

The issue will be held at a minimum participation unit price of NIS 0.40, 17% below today's opening price of NIS 0.482.

Sources inform ''Globes'' that Leviathan partner Ratio Oil Exploration (1992) LP (TASE:RATI.L) is planning a rights issue after Passover. The issue will be held at a minimum participation unit price of NIS 0.40, 17% below today's opening price of NIS 0.482.

The underwriters will include Clal Finance Underwriting Ltd.

Noble Energy Inc. (NYSE: NBL) owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio owns 15%.

Two months ago, the Leviathan partners announced that the costs of the Leviathan 1 exploratory well would overrun the planned budget by $40 million to $190 million. The estimated cost of the Leviathan 2 well is $70 million and the production tests, if carried out, will cost $34 million.

Compared with these costs, at $294 million or over NIS 1 billion, Ratio had NIS 116 million in cash and cash equivalents at the end of 2010. Its share of these costs is NIS 150 million.

Ratio has an open shelf prospectus valid through May 2011, under which it can raise capital immediately. This is likely one of the reasons for the partnership's tight timetable for the rights issue.

Ratio's participation unit price fell 5.6% by mid-afternoon to NIS 0.455, giving a market cap of NIS 3.3 billion.