According to the defendants, there was no room to include in the report of September 8, 2013 the data regarding the pores of the rock. Insofar as the provisions of the law are stated in the provisions of the law that were added with a unique reference to the oil exploration industry (Regulations 36(a2), 38(f) of the Reporting Regulations and the Eleventh Addendum), Shemen reported the information that it was required to report. An examination of these regulations shows that the level of rock porosity in itself is not included in the data that the company must disclose in the reports after performing the electrical log tests. This is even if there is a certain change from the earlier forecast, and in fact this figure should not be included in the report.
According to the defendants, Shemen's general duty to publish an immediate report by virtue of Regulation 36(a) of the Reporting Regulations, the controls of an event or matter as described in this regulation was also not violated. According to the defendants, the rock pores figure in itself is meaningless, since only a set of professional data leads to the experts' decision. The defendants referred to a number of parameters beyond the pores, namely the rate of cracking (a figure that refers to cracks in the rock that allow the flow of the resource trapped in the cavities) and the thickness of the rock layer. In our case, the porosity rate as found in the electrical logs tests made it possible to produce oil economically, and only a combination of the porosity and cracking data can lead to a conclusion regarding the possibility of the presence of oil in the drilling pit.
- The defendants add that the electrical log inspection provided low-quality information due to problems with the test. The rate of rock pores found in the test was 2%-6%, while very little information was obtained regarding cracking, which showed its existence but did not allow for a numerical estimate. In any case, this is only a preliminary figure, and there is no choice but to use it, since obtaining a more accurate figure entails unreasonable costs.
It was argued that the data about the porosity rate obtained after the electrical logs tests constituted a minor change from previous published data regarding the porosity of the rock. In this context, it was argued that the claim in the statement of claim that Shemen had published in previous reports a rock porosity of 4%-10% is incorrect. It was claimed that this figure is a general figure that relates to the pores of the rock together with the cracking figure, while the figure of pores without cracking published in previous reports and in the prospectus was 3%-8%. It was argued that the claim in the statement of claim that Shemen had made a representation in previous reports that there was an expectation that porous rates found in the "Yam 2" well, which stood at 12%-13%, were also incorrect. Hence, the figure obtained after the electrical logs tests did not constitute a significant change.