Just a dozen years ago, any talk of significant petroleum in Israel would have made most Oil and Gas experts' heads spin like a dreidel, but that didn't stop men like Donald Axford and the Hagai Amir, from pursuing the dream. It's only fitting that their baby, PetroMed, is now actively engaged in the development of newly identified turbidite formations off the coast of Israel and American Capital Partners' (OTC: APRJ) shareholders will get to reap the rewards.

PetroMed is on a mission, to help make Israel become the next energy exporter. This is, obviously, a tall order, especially considering the fact that Israel has not reached energy independence, but the company's core competence is in the fields of exploration and production (E & P), so it's ideally suited to meet the goal and make investors a boatload on the way.

The government of Israel granted PetroMed two Exclusive Exploratory Permits, covering 3,500 square kilometers. PetroMed believes, and for good reason, that they now control an area with five "world class" prospects. The area is located about 65 miles off the Israeli coast and has the potential to be a hydrocarbon deposit bonanza.

PetroMed is Involved in the Most Important Event off the Israeli Coast Since Moses Parted the Red Sea

When it's all said and done, PetroMed's E & D projects are schedualed to create a market capitalization of well over $7 Billion, based on 2006 oil prices. Considering current estimates suggest there is over 2.9 Tcf dry gas reserves, proved developed and undeveloped, already in the Levant Prism deep water offshore turbidite formations and the potential for an additional 6 Tcf in Israeli reserves, PetroMed has a great shot of getting there.

PetroMed will use this discovery as a springboard for larger and longer-term corporate goals, because the company believes that there is also significant potential for significant oil or gas reserves further offshore Israel.

The south-eastern Mediterranean area, where PetroMed has two permits, is a deep basin that has accumulated sediments almost continuously from early Mesozoic times to the present and has already produced massive gas discoveries. Studies confirm that the area starts in the south adjacent to the recent gas condensate and oil discoveries in the eastern Nile Delta cone region and continues northwards to Israel's northern border. British Gas, and its partners, have already made vast discoveries in the shallower Pliocene section of the Nile Delta, as well as offshore southern Israel (Noa, Or, Mari and Gaza Marine). There have also been several other significant petroleum finds in the Mesozoic and Cenozoic sections of the region.

Donald Axford, PetroMed's original lead geologist, passed away about two years after the Company was formed (http://www.amex.com/?href=/newsDetails/CmnNewsDet.jsp?id=XpressFeed_NewsDetails_1109960840180.html), but not before making a major impact on the future of Israel. Axford is not just another geologist, he was inducted into the Canadian Petroleum Institute Hall of Fame for Exploration for finding the giant ‘Hibernia’ field offshore Newfoundland. If you're not familiar with Hibernia, it's only the biggest oil and gas strike in the history of Canada, estimated to be 12 billion barrels of oil equivalent.

Axford believed that a turbidite formation (basically underwater rivers that create avalanches of sand, which then, over millions of years, create hydrocarbon traps) off Israel's coast, southwest of Haifa, is identical to Hibernia. Axford considered this region to be very worthy of development, because, since the late 1970’s, virtually all world class hydrocarbon discoveries, including Hibernia, were found in such offshore formations. So, PetroMed entered into a formal engagement with Axford and his Calgary based team to make it reality.

Typically, these formations are usually located in river deltas, like the Mississippi River and the Niger River, so the mighty Nile River Delta offers great hope. Since the turbidite formations offshore of Haifa contained so many of the hallmarks of a great discovery, Axford felt that the area has the potential to be the equivalent to Hibernia. Keep in mind, Hibernia's first well produced over 220,000 barrels of oil a day, while the second well drilled flowed over 190,000 barrels a day.

That's huge. A Hibernia type of strike, makes PetroMed an overnight success story and Israel a net energy exporter. Oh, not to mention early investors will own an oil and gas major for pennies on the dollar.

PetroMed has all the horsepower to make it happen

Nobody knows the region better then David Peace (his bio is 6 pages long) and, as the head geophysicist, he is the leader of PetroMed's technical team. Plus, Peace, the number one 'CSEM' guy in the world, has a wealth of resources, from the Institute of Geophysics in Tel Aviv to a well-known, much-respected Spectrum Energy, to bring the project on line. PetroMed's board and technical team now reads like the Mediterranean oil and gas All-Star team.

In addition to gaining exclusive access to a “world class” property, PetroMed has one of the most energy starved countries in the world ready to buy up all the energy it can get. The importance of developing an indigenous supply of natural gas, and other energy sources, is more critical to Israel then any other country on the planet.

Israel's offshore wheather, there are no hurricanes off its coast and rough seas are rare, is only exceeded by its determined to become energy indepent political climate. Israel is one of the better royalty havens, the royalty rate is at only 12.5% after cost recovery, compared to most other countries, for example Bolivia's rate is set at 50%. Plus, the holder of an Israeli petroleum right is entitled to import the goods it requires for petroleum exploration purposes free of customs duties and other import levies.

PetroMed Controls the hottest properties in the Nile River Delta

After completing other work programs PetroMed will be awarded the requisite drilling licenses for the following 5 to 7 years. Upon successful drilling, Production Certificates will be awarded and in force for 30 to 50 years, then, upon discovery of petroleum, PetroMed, as a licensee, will have a statutory right to receive a production lease with an initial lease term is 30 years, extendable to 50 years. A lease confers the exclusive right to explore for and produce petroleum in commercial quantities in the lease area, as well as to transport and market the petroleum produced, subject to the right of the Government to call upon it to supply local needs first, at market price.

Developing a world class petroleum field is a cash intensive endeavor, but the rewards are well worth the effort, and since the Israeli government is comitted to energy independence, because they know that energy is a key to its long term survival, the commitment will be funded.

PetroMed anticipates exploration and development costs to hit nearly $350 million USD , but that's a small price to pay to acces the estimated 4 billion Barrels of oil, especially considering that money is looking for high-quality, large-scale E&P opportunities.

It's no wonder that the money is readily available. The gross margins (earnings before interest, taxes and government royalties) are phenominal, usually about 50%.

Israel Secures $250 Million to support Offshore Petroleum Operations

The government is focused on investing in its energy infrastructure and is not being shy. In fact, award winning financing (http://www.citigroup.com/citigroup/press/2006/060809a.htm) expedited the construction, which has already commenced, of a $250 million underwater natural gas pipeline that will connect the PetroMed gas fields, as well as other discoveries, directly to the electric generation facilities in Israel, eliminating ‘stranded gas’ issues.

PetroMed already completed the first step of its work program, at a cost of just over $5 million USD. In fact, through first quarter of 2008 PetroMed's pre-drilling budget for the exploratory process is about $17.2 and positions the company in a 'drill-ready' posture in a world-class offshore turbidite formation.

Don't Wait Until Drilling News Sends the Stock Soaring!

Soon, the company should be looking at the exploratory phase in the rear view mirror, then it will go on to drilling licenses and positioning drill ships.

The following corporate developmental steps are much larger in scale, but also have much lower risk. The focus will turn to infrastructure work needed to get the product to market.

PetroMed’s talented management team is all about developing the petroleum opportunities in one of the richest undiscovered oil fields in the world, the Nile River Delta, and bringing it to the Israeli market. After Russia held Belarus hostage, in 2004, by withholding their gas, it became even more clear that Israel had to avoid a similar faith. The Company enjoys a significant competitive advantage, it has the world's foremost experts on the Eastern Mediterranean Sea managing the exploration process, as well as, the contribution of internationally acknowledged world-class petroleum professionals, both inside and outside Israel.

The management team anticipates PetroMed will be 'drill ready' this year and American Capital Partners' (APRJ) shareholders can join the party. Buy APRJ now below $1.00 per share and the ride to Book Value is almost $2.50, and that's just the first stop!

The fact that PetroMed is well financed and has the the backing of the Israeli government bodes well for this talented Jr Petroleum company, especially considering the vision of its management team, the geological information and the technology involved. It's like the immovable object is working in harmony with the unstoppable force, towards the same goals.