{"id":30552,"date":"2012-06-30T12:23:35","date_gmt":"2012-06-30T16:23:35","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/06\/investing-in-israels-epic-oil-and-gas-boom\/"},"modified":"2012-06-30T12:23:35","modified_gmt":"2012-06-30T16:23:35","slug":"investing-in-israels-epic-oil-and-gas-boom","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/06\/30\/investing-in-israels-epic-oil-and-gas-boom\/","title":{"rendered":"Investing in Israel\u2019s Epic Oil and Gas Boom"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

When I think of Middle Eastern nations with massive oil and gas reserves, Israel isn\u2019t a country that comes to mind… ever, really.<\/p>\n

After all, Israel still imports 99% of its oil and 70% of its natural gas.<\/p>\n

In fact, for the last 60 years, energy companies there have basically drilled one dry hole after the next.<\/p>\n

But that\u2019s all getting ready to change in the coming years thanks to new drilling capabilities.<\/p>\n

And Israel is set to shake up the energy landscape in the Middle East like no one has ever seen before.<\/p>\n

Israel: An Energy Giant in the Making?<\/strong><\/h2>\n

Last week, Israel Opportunity Energy Resources LP discovered an offshore oil and gas field with an estimated 1.4 billion barrels of oil and 6.7 trillion cubic feet of natural gas.<\/p>\n

According to the company\u2019s Chairman, Ronny Halman, \u201cThe quantity of gas discovered… makes it the third-largest offshore discovery to date.\u201d<\/p>\n

It follows last June\u2019s announcement of uncovering 16 trillion cubic feet of natural gas and 800 million barrels of oil in Israel\u2019s Tamar and Leviathan offshore fields.<\/p>\n

Yet, for Israel, these discoveries are only the beginning. And investors should pay close attention.<\/p>\n

That\u2019s because Israel\u2019s largest oil and gas opportunities aren\u2019t offshore. They\u2019re on land in the nation\u2019s shale deposits.<\/p>\n

As The<\/em> Wall Street Journal<\/em> reports, \u201cThe World Energy Council estimates Israel\u2019s shale deposits, located some 30 miles southwest of Jerusalem, could ultimately yield as many as 250 billion barrels of oil.\u201d<\/p>\n

To put this into perspective, Israel could soon be the world\u2019s third-largest nation in terms of proven oil reserves… behind Venezuela – which took the top spot last year – and Saudi Arabia.<\/p>\n

To get an idea of the scope of these massive reserves, it would potentially be enough to cover the United States\u2019 entire oil needs for the next 35 years.<\/p>\n

Of course, not everything is hunky-dory. The biggest problem Israel faces right now is that the country isn\u2019t prepared to handle such a dramatic increase in oil and gas production.<\/p>\n

Translation: This is no short-term play.<\/p>\n

But there are a number of ways to potentially cash in as Israel works to become one of the world\u2019s leading energy providers… that is, if you can stand to wait.<\/p>\n

Stocks and ETFs<\/strong><\/h2>\n

The safe way to play Israel\u2019s oil and gas boom is the iShares MSCI Israel Capped Investable Market Index Fund<\/strong> (NYSE: EIS).<\/p>\n

That\u2019s because, with such massive discoveries there, Israel\u2019s entire economy is set to prosper for several years as it ramps up its oil and gas exports and slashes its imports.<\/p>\n

EIS is designed to capture this overall growth by mimicking Israel\u2019s broad-based equity market performance.<\/p>\n

And, the best part, this ETF is likely trading at a hefty discount.<\/p>\n

You see, one thing to watch for in ETFs is the fund\u2019s net asset value, or NAV.<\/p>\n

Typically, when a fund\u2019s share price is trading for more than the NAV, it\u2019s trading at a premium. When the price is less than the NAV, it\u2019s trading at a discount.<\/p>\n

In my experience, the best time to buy an ETF is when the share price trades at a discount of 20% or more to the NAV<\/span>.<\/p>\n

As I write, EIS is trading at $36.39 and its NAV is at 55.98. By this measure, that means EIS is currently trading at a 34% discount.<\/p>\n

But there\u2019s another play to keep on your watch list, as well<\/p>\n

The company is called Genie Energy Ltd.<\/strong> (NYSE: GNE), a spin-off of IDT Corporation<\/strong> (NYSE: IDT).<\/p>\n

Not many investors know this, but when it comes to Israel, Genie has an 89% interest in a private oil and gas drilling company out of Jerusalem called Israel Energy Initiatives (IEI).<\/p>\n

IEI already holds the rights to a shale deposit in Israel that could contain as much as 40 billion barrels of oil.<\/p>\n

This puts Genie in a perfect position to ride Israel\u2019s oil and gas boom all the way to the bank. And for a company with a market cap of just $180 million, the sky really is the limit.<\/p>\n

In terms of energy, over the next 10 years we\u2019re going to see changes take place in the Middle East like we\u2019ve never experienced before.<\/p>\n

Just by preparing today for these changes, you could find yourself sitting on a windfall of gains in the not-too-distant future.<\/p>\n

Good Investing,<\/p>\n

Mike Kapsch<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U When I think of Middle Eastern nations with massive oil and gas reserves, Israel isn\u2019t a country that comes to mind… ever, really. After all, Israel still imports 99% of its oil and 70% of its natural gas. In fact, for the last 60 years, energy companies there have basically drilled … <\/p>\n

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