Zion Gets Israel Nod to Re-Explore Unsuccessful Well
This article was first published on Rigzone here
Zion Oil and Gas Inc. (ZNOG) has received clearance from authorities in Israel to proceed with a work plan to re-enter the Megiddo-Jezreel 1 well (MJ01), the United States company said, over five years after declaring the well not commercially viable.
A government committee composed of representatives from the ministries of energy, water and environment as well as local officials visited the rig site and subsequently accepted the plan, the company based in Dallas, Texas but operating in the Middle Eastern country said in a news release.
“This acceptance allows us to sign agreements and secure mobilization dates with our service providers to commence and complete the project”, chief executive Robert Dunn said in a statement.
Late 2018 Zion announced that results from the testing program of the well’s primary zones within Jurassic- and Cretaceous-age formations showed the well was a no-pay zone.
However the results “may support further evaluation and potential further exploration efforts within our License area”, then-chief executive Dustin Guinn said in a press release November 20, 2018.
Zion, which has tied its mission to the gospel, said the approval process for the re-entry plan had been derailed by the war between Israel and Hamas. The application for the Megiddo Valleys 434 license, which covers MJ01, had also been delayed by the political crisis in Israel that saw the nation go through three parliamentary elections since 2020, according to Zion.
“Zion will deploy cutting-edge technologies and innovative stimulation techniques in the MJ-01 well, aiming to unlock hydrocarbon flows in both previously and newly identified zones of interest”, the re-entry approval announcement stated.
Zion announced September 14, 2023, the receipt of Israeli approval for the license encompassing about 75,000 acres. The license covers the same area as New Megiddo License 428, which expired February 1, 2023, after multiple extensions since an initial six-month term awarded December 2020.
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The new license lasts three years till September 2026 "with the option of four 1-year extensions for a total of seven full years until September 13, 2030", Zion said. This is Zion's seventh license throughout its 23 years as a company.
"This is not an extension but a new license spanning seven years, providing ample time for further exploration and development", Jeffrey Moskowitz, Zion vice-president and managing director for Israel, said in a press release May 18, 2023.
Before the granting of the license, Zion had raised a "substantial doubt" about its capability to continue, citing "a history of operating losses and negative cash flows from operations".
"We currently have no revenue generating operations", it declared in its quarterly disclosure with the United States Securities and Exchange Commission August 10, 2023. Zion said in the filing its cash balance would only be enough to see the company through August 2023 in terms of funding operations.
On November 9, 2023, it released its latest financial results showing it had a net loss of $1.7 million for the third quarter of 2023. Working capital further fell to $108,000.
Announcing the approval of the work plan OTCQX-listed Zion also said it has extended a funding raise that was to expire February 29, 2024. “Each $250 investment per unit will continue to provide investors with $250 worth of ZNOG stock at the trading day’s high-low average and fifty 25-cent Warrants, with the exercise period now extended from April 15, 2024, to April 14, 2025”, it said.
To contact the author, email jov.onsat@rigzone.com
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