The porosity parameter - which in the previous report was 4%-10% and without the addition of cracked pores, in the new report is 2%-6% and with the addition of cracked pores (0.1%-2%)."
According to the defendants, the wording of the report indicates that it is not possible to learn from it that each parameter specified in it is significant in itself, especially since the context is the amount of oil in the reservoir, whereas in our case the possibility of oil flowing from the rock to the drilling pit was discussed. To this, it should be added that the difference in the pore figure is the smallest of the three mentioned in the report.
There is a reason for the defendants' argument that the change in the valuation of resources was determined in light of a set of data, not all of which were in the hands of Shemen prior to the performance of the production tests. There is also a reason to argue that one should be wary of the dangers of "wisdom in retrospect," since the full data and the declaration of drilling as a "dry pit" were already known. But even given this caution, the figure learned from Shemen's report is that the pores rate, was one of the "The main parameters that were changed and changed the assessment of contingent resources". It is reasonable to assume that a parameter that is "main" in the matter of resource assessment is also "significant" in this aspect. This is even if there are other "significant" parameters.
- As for the figure of cracking, The lawsuit claims Prior to the decision to carry out the production tests, the board of directors had clear data regarding this component, and it was clear to the defendants that it would not be able to compensate for the pore figure. But the evidence brought before me does not support this conclusion. An examination of the statements of those present quoted above, especially Domer's words, shows that at that stage it was not possible to formulate a conclusion with respect to the figure of cracking. It was said that no multiple fractures were observed that could have a positive effect on conductivity, but at the same time it was said that conductivity was observed even though it was lower than expected. The main thing is that Domer made it clear that only after the logs were deciphered would it be possible to know if there were fragments in the rock. I will note that in his testimony in the Halfon Motion, in response to the plaintiff's questions, Levy said that it took three months to fully decipher and that waiting for this period of time meant a cost of about ILS 45 million (Levy's testimony in Halfon's motion, page 56, 9-18, and 80 hours, 12-20). Hence, it was not proven that prior to the report of September 8, 2013, the defendants had information about an updated cracking figure, nor did they have any actual estimate.
F.4 Whether the plaintiff's claims regarding the significance of the results of the electrical log tests have been proven
- From the above, it appears that the porosity rate is a significant parameter for evaluating the database, and that the electrical logs tests yielded an up-to-date result that was lower than expected. The porosity data obtained in the electrical logs tests was the "bad" aspect of the totality of the data obtained after the tests and was before the board of directors. As for the cracking figure, at the time of the decision on production tests, the Board of Directors did not have concrete up-to-date data.
- The plaintiff claims that the current rock data had dramatic implications for the prospects for the economic production of oil in the "Yam 3" drilling, and that these implications were clear to the defendants prior to the report of September 8, 2013. In his view, the findings of the electrical logs indicated "serious problems" in drilling and that the chances of economic oil production were zero, or at least significantly reduced. It was argued that in light of the findings, the very report of the discovery of significant oil marks was false and the decision to conduct production tests was unreasonable and stemmed from improper motives on the part of the defendants, who knew they were hopeless.
These conclusions of the plaintiff regarding the significance of the data that were clarified in the electrical logs tests are claims that require proof and do not derive from the fact that an up-to-date pore figure was obtained, which is lower than expected.
- A basic rule is that the plaintiff in a civil proceeding bears the burden of proving his claim. This burden consists of the burden of persuasion, which means that the party is obligated to prove his claims to the extent of proof required in a civil proceeding, and the duty to bring evidence by virtue of which the litigant is required to present sufficient evidence for the purpose of meeting the burden of persuasion (Civil Appeal 78/04 HaMagen Insurance Company in a Tax Appeal vs. Shalom Gershon Moving Ltd.IsrSC 66(3) 18, para. 11 (2006); Civil Appeal 1582/20 In the case of Halfon, paragraph 75 [Nevo]; Yaniv and Aki, Law of Evidence, Vol. 4, (2021), 1921-1922). In our case, the plaintiff had to prove his claims that the results of the electrical logs tests indicated serious problems in drilling and a dramatic impairment of the ability to produce oil from the reservoir; no significant oil marks were discovered; And that the decision to conduct production tests was unreasonable. These are claims relating to a professional field, and professional knowledge is required to address them. Such knowledge is not included in the framework of "judicial knowledge", since these are not things that are known to all, nor are they facts that can be clarified immediately and accurately by examining authoritative sources (Yaniv and Aki, Law of Evidence, Vol. 1 (2020), 535). Hence, to the extent that a professional position in the field of oil exploration is claimed, the way to establish it is through the opinion of an expert in the field (compare: Class Action (Tel Aviv District) 13948-08-15 Nachmani v. Oil and Gas Resources Ltd., paragraph 126 [Nevo] (May 24, 2021)).
- The plaintiff did not submit an expert opinion to substantiate his claims, and in his view, the evidence brought before me is sufficient to substantiate his conclusions. As will be explained below, I cannot accept this position.
- Before I address the evidence on the basis of which the plaintiff sought to base his conclusions, I will refer to the arguments of the parties with regard to the title of the report. The defendants claim that the meaning of the phrase "significant oil marks" that appeared in the title of the report is only that the oil marks were discovered in verifying tests, as opposed to a random finding. The plaintiff claims that this is a "pompous" expression that the defendants knew was incorrect and whose purpose was to motivate investors to invest in the company's shares. This reference is already required, because insofar as I accept the position that the title of the report constitutes a pompous statement about the ability to produce oil commercially, the defendants' approach also had no basis for such a report. On the other hand, insofar as I accept the defendants' position that this is not a material statement beyond the fact that the marks were found in verifying tests, the need to discuss the plaintiff's claim that a basis was presented for the fact that the data that became clear showed that there were no significant oil marks.
- According to the language of Section 6 The eleventh addendum in order to establish the need for reporting requires the corporation's conclusion that "significant petroleum marks" have been found:
“)a) Experience drilling in a specific target layer has been completed and validation tests have been performed in the layer (such as: Open-Hole Logging; Logging while Drilling; Drill Stem Test), On the basis of which the corporation reached a well-founded conclusion that there are significant traces of petroleum in the said layer, the report shall include these details...." (emphases added, M.R.)