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Shemen Oil & Gas Resources reported Sunday it found “significant” indications of oil at its Yam 3 well, off the coast of Ashdod.

Initial seismic surveys indicated a potential of 227 million barrels of “very high quality” oil, with 40% of it likely to be commercially recoverable, as well as about three trillion cubic feet of natural gas, with an estimated 35% recoverable.

“Data received from the operator were examined by logging decipherers and a very experienced geologist in the field of oil and gas exploration hired by the license partners to supervise and consult on the project,” Shemen’s statement said. “[But] signs of oil do not attest to a ‘discovery’ in the sense used under Petroleum Resources Management System rules or ‘discovery’ in the meaning set out by the Israel Petroleum Law – 1952,” the statement added.

Shemen owns 78% of the license.

The company’s shares closed up 11.6% Sunday on the Tel Aviv Stock Exchange.

Shemen’s license area is located in shallow waters 16 kilometers offshore opposite the city of Ashdod.

The oil was found within a layer measuring 68 meters in thickness was reported to be of high quality.

Wireline logging was performed when drilling reached a depth of 5,700 meters.

Shemen and its partners, which include Caspian Drilling Company, said in December there may be as much as 120 million barrels of crude oil and 1.8 trillion cubic feet of gas potential.

The U.S. Geological Survey estimates the Eastern Mediterranean’s Levant basin, nearly half of which is in Israeli waters, may hold 1.7 billion barrels of recoverable oil.