Bethel Finance: Psagot raises Tamar valuation to $8.5b

www.bethelfinance.com
Psagot Investment House Ltd. today raised its valuation for the offshore Tamar natural gas field, two days after Israel Electric Corporation's (IEC) (TASE: ELEC.B22) board of directors approved the huge gas deal with the Tamar partners. IEC will buy an estimated $8 billion worth of natural gas from Tamar over 15 years.

Psagot says, "The collection of gas sale contracts from the Tamar project and the progress in the IEC purchase agreement raises the certainty about future revenue flows. We therefore raise our valuation estimate for the reservoir to $8.5 billion from $7.5 billion in our previous estimate. We also raise out target prices for Tamar's partners Avner Oil and Gas LP (TASE: AVNR.L), Delek Drilling LP (TASE: DEDR.L), and Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L)."

Psagot concludes, "The certainty arising from the signing of large contracts, the nearing of the agreement with IEC, the establishment of committees to formulate policies to encourage the use of natural gas, and remarks favoring exports, all support updating the valuation of the Tamar project."

Avner's share price fell 1.5% by mid-afternoon today to NIS 2.56, giving a market cap of NIS 8.6 billion, Delek Drilling's share price fell 2.7% to NIS 14.33, giving a market cap of NIS 8 billion, and Isramco's share price fell 2.4% to NIS 0.52, giving a market cap of NIS 6l3 billion.