Israel Petroleum Company Signs Agreement to Acquire Israeli Publicly Listed Shell Company

VAIL, Colo., Oct. 25 /PRNewswire/ -- Israel Petroleum Company, Limited (IPC) is pleased to announce that it has signed an agreement to acquire the publicly listed Israeli company Shaldieli, Ltd. ("Shaldieli" or "the Company") in a reverse takeover.  IPC will place its ownership interests in the Myra and Sara drilling licenses offshore Israel – owned through a limited partnership - into the Company, which currently has no assets or liabilities, in exchange for 90% ownership of the Company and a controlling interest therein.  The transaction is expected to close at the end of November, subject to regulatory approval and requisite approval of corporate organs.  The prospectus for the transaction is expected to be filed with the Israel Securities Authority by November 4, 2010.

Shaldieli is listed on the Tel Aviv Stock Exchange under the symbol SLDL.IT.  It has been inactive but is now approved for unrestricted trading.  After the acquisition, a total of approximately 144.8 million shares will be issued to IPC.  For tax reasons, IPC will be required to hold these shares for two years.  Howard Cooper, currently the manager of IPC through his company International Three Crown Petroleum LLC, will be the Chairman and President of the Company following the closing.  IPC will appoint three board members for the five-member board.  IPC currently owns 50% of IPC Oil and Gas (Israel) Limited Partnership ("IPC Israel"), which owns a 13.609% interest in the Sara and Myra licenses.  Under the agreement with Shaldieli, IPC will exchange its 50% ownership in IPC Israel for ownership of 90% of the shares of Shaldieli, and Shaldieli will acquire ownership of IPC's 50% interest in IPC Israel.  Also, Shaldieli will hold 50% interest in the general partner of IPC Israel along with an entity owned by Ofer Investments Ltd., the owner of the other 50% of IPC Israel under the agreement announced last week between IPC and Ofer Investments, Ltd.

About the Consortium

The Sara and Myra drilling licenses are held by a consortium comprised of IPC Israel (13.609%), Emanuelle Energy Ltd. (24.161%), Emanuelle Energy Oil and Gas Limited Partnership (19.161%), Modiin Energy Limited Partnership (19.282%), and other entities.

IPC Israel is owned 50% by Ofer Investments Ltd. and 50% by IPC.  The shares of IPC are owned 76.79% by Israel Oil and Gas Corporation, a subsidiary of Bontan Corporation Inc. (OTC Bulletin Board: BNTNF) and 23.21% by privately owned International Three Crown Petroleum, LLC, the sole director of IPC and currently the general partner of IPC Israel.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the U.S. federal and Canadian securities laws.  Any such statements reflect IPC's current views and assumptions about future events and financial performance.  IPC cannot assure that future events or performance will occur.  Important risks and factors that could cause actual results or events to differ materially from those indicated in our forward-looking statements include, but are not limited to, the following:  the effect of economic and political developments in Israel and in the Mideast;  the reliance on the working interest owners, as well as third-party consultants and contractors, to develop the project;  the ability of IPC to raise sufficient capital to demonstrate requisite financial capability and to satisfy its obligations for the costs of drilling and development; the risk that the final interpretation of the seismic and other data may show or suggest, or that drilling may ultimately demonstrate, that either or both of the licenses contain no, or noncommercial amounts of, hydrocarbons;  the volatility in commodity prices for crude oil and natural gas;  the presence or recoverability of estimated resources;  the potential unreliability or other effects of geological and geophysical analysis and interpretation;  exploration and development, drilling and operating risks;  competition for development of the Project;  environmental risks;  government regulation or other action, including the potential change in tax and royalty provisions and in regulations relating to approval of transfers of ownership of license holders that are under active consideration by the Israeli government and could significantly adversely impact project economics and the commercial viability of drilling one or both prospects, and including the possibility that the Israeli regulatory authorities will not approve the transaction described in this release or will impose conditions of approval that make the transaction infeasible to pursue;  potential disruption from terrorist activities or warfare in the region or at the Project site;  general economic conditions;  limited market available in Israel for oil and gas that may be found in commercial quantities; other risks associated with the exploration and development of international offshore projects in several thousand feet of water; and other risks identified by the press releases and securities filings of the other working interest owners in Israel, Canada, and other jurisdictions in which such releases and filings are made.  IPC assumes no obligation and expressly disclaims any duty to update the information in this news release.

SOURCE Israel Petroleum Company

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