Shemen Oil and Gas Resources Ltd. (TASE: SOG) has discovered oil at Israel’s Yam 3 well, off the coast of Ashdod. The field is estimated to be worth up to $3 billion after development costs of $160 million, Israel’s Globes business daily reported on Sunday.

Shemen said signs of oil were found at the site, 19 kilometers from Ashdod, at a depth of 5,175 meters below sea level, and that the quality of the oil was high. The net thickness of the target strata is 68 meters, which, multiplied by the license area of 25 square kilometres, gives Israeli energy analysts an idea of how much oil awaits Shemen under the sea, Globes said.

A resources report by Netherland Sewell & Associates Ltd. estimated the field holds 128 million barrels of recoverable oil, with 110 million barrels of oil and 18 million barrels of oil equivalent of natural gas. With international oil prices above $100 per barrel, the reservoir could generate $11 billion, with between $2 billion and $3 billion value for the field’s developers, Globes said.

Related coverage Israeli Leaders Express Well-Wishes to Jews Around Globe for Rosh Hashanah Israeli leaders have expressed well-wishes to Jews around the world ahead of the Rosh Hashanah holiday, which begins on Friday...

Clal Finance energy analyst Yaron Zar told Globes that the next data point investors are waiting to learn is what kind of bedrock is being found in the area. At the much larger Israeli natural gas fields of Tamar, Leviathan, and Karish, the rock is highly porous sandstone, but the strata rock at Yam 3 may be chalk, with a far lower porosity. The softer the rock, the better for drilling and extracting, Globes said.

The oil discovery was powerful news for Shemen’s share price, which jumped by 15% before closing the trading session in Tel Aviv with a 3% gain on the initial news. The proof of oil is also seen as benefiting Israel’s exploration sector, which has fallen from grace after several high-profile “copy cat” natural gas wells announced in the wake of Israel’s Leviathan mega deal proved to be duds.

Israel’s Myra and Sarah fields, both “dry holes,” were estimated to contain 6.5 trillion cubic feet of gas and cost $165 million to explore; the Ishai license, another dud, was estimated to have 2.4 TCF of gas and cost $103 million to explore; while the Shimshon license, yielded just 0.6 TCF of gas, a quarter of the estimated 2.4 TCF, and cost $80 million.