Moreover, as quoted above, the board of directors had the words of Domer, chief geologist and consultant of Shemen, who made it clear to those present that the log tests showed that "there is oil" and that he recommends conducting production tests:
Yitzhak Kayali: From your experience, can we conclude that this is a good well? Do you recommend doing production tests?
Chuck Domer: The logs indicate that there is oil, which is good. The production tests will tell what the quality is. I recommend taking the production tests and in both levels.
Yitzhak Kayali: The company has invested about $150 million so far. Do you think the results justify an additional $20 million investment?
Chuck Domer: There's oil, we know it. The question is whether in commercial quantities and this cannot be said, we will be able to answer this only after the tests have been performed.
Itay Rubin: Can you repeat the 2 recommended areas for taking the tests? Chuck Domer: Between 5,250-5,175 meters, top layer. The additional layer is located at a depth of 5,500-5,300 meters.
Yossi Levy: We will only examine the good areas in these intervals.
Itay Rubin: Which of the layers appears to be a better layer?
Chuck Domer: You can't tell. The upper layer was examined in Yam 2. But the bottom layer may also be good. Therefore, I recommend examining both layersItay Rubin: What type of hydrocarbons were found?
Chuck Domer: Oil, probably light oil. We have no visual evidence of oil coming out of the pit, but we have seen signs of hydrocarbons" (emphases added, M.R.).
Domer's remarks were made after he addressed the rates of pores and the issue of conductivity.
At the meeting of the Board of Directors on September 16, 2013, Levy also noted to the Board of Directors that "... The consultants and the operator recommended conducting two production tests" (page 2). The rest of the discussion also indicates the involvement of experts, even those hired by the drilling partners (page 3).
- Hence, the defendants presented evidence showing that the decisions of the board of directors regarding the execution of production tests were made after all the data was presented to the experts and the decisions were made on the basis of their recommendations. The defendants did not summon the experts on their behalf to testify, and made do with Levy's testimony and the transcripts. However, as stated, the burden of proving the claim is on the plaintiff's shoulders, and his claims regarding the existence of "serious problems in drilling", the absence of "significant oil marks", the low chances of oil production, and the unreasonableness of the decision to conduct production tests - he did not prove.
- Although the plaintiff did not base his claims regarding the significance of the findings of the electrical logs tests, it remains to be examined whether the defendants should have included the findings in the oil reports. I will address this matter briefly, since, as will be explained below, even if the defendants should have done so and their failure to do so amounts to the inclusion of a misleading detail in the report, the plaintiff did not establish a causal connection between their actions and the damage alleged by him, which is the full amount of his investment.
F.5 Should Shemen have included the rock data that were found in the electrical logs tests in the report?
- I am of the opinion that the defendants' obligation to include the current porosity data in the report dated September 8, 2013 arises first and foremost by virtue of the duty to update and amend previously published data, which finds its legislative expression In Regulation 37A2 For the Reporting Regulations:
“)a) If a corporation submits a report on an event or matter (hereinafter - the original report) that may occur at a later date than the original report (hereinafter - a possible event or matter), the corporation shall submit a report on any material development that has occurred in relation to the event that is the possible matter; If the original report specifies an expected date for the possible event or matter, the corporation will submit an immediate report on the status of the possible event or matter, as of the expected date as aforesaid."