As noted, as indicated by Shemen's report (P/1), the pore rate published in the first resource report was an estimate based, inter alia, on the "Yam 2" drilling. The plaintiff referred to Levy's statement to the board of directors that the "Yam 2" drilling in a 6-meter section had porosity of 12%-13% (see quotations in paragraphs 66, 67 above). However, Levy's statement does not indicate that Shemen was conducted on the assumption that the expected porosity rate in the "Yam 3" drilling is 12%-13%. As noted, the estimates regarding the pore rate were published in the first resource report and no basis was laid for the claim that Shemen was conducted on the basis of different estimates from those included in it. Whether the relevant figure in the first resource report is 4%-10% as claimed by the plaintiff, or 3%-8% as claimed by the defendants, it is not claimed that it mentions a figure of 12%-13%. Obviously, the public was not presented with such a figure either. Hence, the claim that the current pore figure was a "steep" decline from 12%-13% was also not substantiated. It should be noted more than necessary that the plaintiff's argument in this context shows that in his view, too, the rate of change is a significant figure in terms of the materiality of the information.
The second is that other positive reports by Shemen were published out of a desire to "inflame" the investing public and create a positive image. This matter was not arbitrated in the proceeding before me. However, I will note that even if I assume that Shemen published positive, unnecessary reports that created a positive picture, this does not substantiate the plaintiff's claim that the very publication of the report on "significant oil marks" and the decision on production tests were false and fraudulent.
It should be noted that in the pleadings, claims were raised, without elaborating, allegations of additional alleged indications, such as the use of the terms "high-quality oil" and "light oil." But no explanation was presented as to why they indicate the critical significance claimed by the current pore figure.
- In light of the above, I cannot accept the plaintiff's argument that it is possible to reach his conclusions from the evidence presented to me. The evidence presented to me does not substantiate the conclusion that the findings obtained from the electrical log tests showed "serious problems" in the Yam 3 drilling, and that the prospects for the economic production of oil were dramatically damaged. I was also not presented with evidence to show that, to the extent required by law, the oil marks found in the electrical logs tests were not significant, and that the data in the company's possession showed that there were no such marks. The claim that Shemen's decision to continue with production tests was also unreasonable, was not proven. As stated, this is a professional field that requires knowledge and expertise, and no evidence has been presented that can establish conclusions of this kind.
- Moreover, more than necessary, the defendants presented evidence that they acted on the basis of the recommendations of experts in the field.
- Levy testified that the experts who accompanied the company and were well acquainted with all the data, including those relating to pores, recommended that the production tests be carried out, and so did the Operations Committee and the Board of Directors (paragraphs 40-50 of Levy 1 affidavit, paragraphs 36-39 of Levy 3). Levy further stated that the porosity figure in our case did not indicate that the chances of producing oil in drilling were "particularly low", and that there are wells in the world with similar characteristics in connection with the pores in which oil is produced commercially (paragraphs 35-41 of Levy's affidavit 3). In this context, Levy also quoted the words of one of the experts, Dr. Folkman, who said in the framework of the Operations Committee: "Since Yam-3 reservoir is likely oil saturated it is expected that oil will flow from even considerably low porous formation" (Appendix 6 to the statement of defense, paragraph 100 of Levy's affidavit 3).
- Levy's testimony regarding the experts' recommendation and the position of the partners in the drilling is supported by the minutes of the meeting of the Operations Committee and the meeting of the Board of Directors of September 7, 2013. As indicated by the minutes of the meeting of the Operations Committee, all the partners decided that the existing data is sufficient in order to move forward and perform tests to examine the flow rate, quality of the findings and the data of the database:
"Presented data is sufficient to proceed with the well test in order to determine flow rates, formation fluid quality and reservoir parameters"