It should be noted that concrete reference to reporting by virtue of this regulation is also included in section 14 of the eleventh addendum.
- Obligation to update according to Regulation 37A2 The Reporting Regulations arose due to the possible impact of the original report on the entirety of the information that investors have and their expectations, and the consequent importance of updating about material developments that have occurred therein, if any.. This is also the case where there was no obligation to publish the data in the first place (Regulation 37A2(c)). The question of materiality, in the context of Regulation 37A2 Examined in relation to the previously published event or interest (A flash of interest, paragraph 50; Class Action (Tel Aviv District) 12568-03-14 Diamant v. Union Bank of Israel Ltd., pp. 11-12 [Nevo] (February 9, 2016) (Appeal against the judgment was dismissed after the appellant withdrew his appeal on the court's recommendation)Civil Appeal 2387/16 dated January 18, 2017); Regarding the obligation to update and correct forward-looking information by virtue of the duty not to mislead the investing public, see also Ephraim Abramson, "Forecasts and 'Soft Information' in Society Public - The Duty to Reveal and the Principles of Legal Liability", Mishpatim 22 (1993-1994), 55 at pp. 90-91).
As noted, Shemen detailed the estimate in relation to the expected porosity rate in the Yam 3 drilling in the first resources report attached to the prospectus. As I noted, according to the defendants' method in the first resource report, the pore values were also noted separately from the cracking component. The latest figure that emerged in the electrical logs tests was different and lower than that published in the first resource report, to which the defendants also agree.
- The defendants' argument in this context is that the change was not material, since in their view the estimate with respect to the porosity rate in the first resource report was 3%-8%, and not 4%-10% as claimed by the plaintiff (paragraph 133 of the defendants' summaries). According to the defendants, to the extent that their position is accepted, the current pores data were only "slightly different" from those previously known (page 21 of the transcript at paras. 23-25), and therefore it was not a "substantial" change.
But even if I assume that the relevant figure published in the first resource report was 3%-8%, the defendants knew that it was incorrect prior to the publication of the report on September 8, 2013. In addition, Shemen's documents show the substance of the change in relation to the previously published figure, and the defendants did not refute the conclusion that emerges from the documents. Thus, in a report dated March 27, 2014 (P/1), Shemen clarified that: "... It is not possible to rely on the pore rate on which the previous report was based." A change that leads to the fact that it is not possible to rely on the previously published figure, in my opinion, amounts to a "substantial development" in relation to that figure. It should also be noted that in the report of September 8, 2013, it was noted that the tests that were conducted included, inter alia, the "characteristics of the reservoir rock". In any case, an update is requested with respect to features whose data have changed in relation to the previously published estimate. The new figure differs from the previous one in that it is also based on the examination of the "Yam 3" drilling, while the data published in the first resource report was based, inter alia, on estimates of findings obtained in the "Yam 2" drilling (P/1, section 5). This aspect, which reduces the degree of subjectivity in the information, also supports the assertion that this was a material change in relation to this figure.