Bethel Finance: Shlomo Nechama enters gas exploration industry

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Bethel Finance news:

Ellomay Capital Ltd. (AMEX: ELLO), controlled by chairman Shlomo Nechama, has acquired 20% of the Yitzhak offshore gas exploration license from Canada's Adira Energy Corporation (XETRA: AORLB8; TSX: ADL; Bulletin Board: ADENF). The Yitzhak license covers 127.7 square kilometers in shallow water of 60-250 meters in the Mediterranean.

Ellomay made the deal through a wholly owned subsidiary Ellomay Oil and Gas 2011 LP. It will reimburse Adira $320,000 for its proportionate share of the costs incurred by Adira at Yitzhak to date of closing plus interest of LIBOR + 1%. It will also pay Adira a 3% overriding royalty interest on Ellomay's share of revenue on petroleum sales from Yitzhak until Elloymay repays its expenditure on the work program.

At the same time, Adira sold 5% of the Yitzhak license to Norway's AGR Petroleum Services Holdings AS as the well operator and sold another 15% to Brownstone Energy Inc.

When the sales are approved by the Petroleum Supervisor, Adira will hold 60% of the Yitzhak License, Ellomay Oil and Gas will own 20%, Brownstone 15%, and AGR 5%.

Ellomay opens at $5.60 on Wall Street today, giving a market cap of $61 million.