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So what do you prescribe? Zion has some money in the bank as of today. Isn't it better to take one last swing, even if it's a long shot? Better that than just paying salaries I would think.
I personally think tisdal and KyOil are correct in that it's time for ZNOG to come clean on the 3D analysis and what they believe is down there.
You too DJ. You going to tap out at this point or see if the Mohilla in MJ01 flows?
My wife and I saw the first two episodes of season 3 in the theater. Was awesome!
Update!
November 15, 2022
Update: MJ02 In Israel
Dear Zion Shareholders and Supporters,
Operations are continuing to move forward.
We can confirm that we have acquired the specified 4 ½” packer and attendant tools needed for isolating the lower prospective zone from the heavy water influx that previously impeded testing efforts.
We anticipate completing this crucial step in the process in the next few weeks. Barring unforeseen circumstances, expeditious DST testing of the primary zone should proceed after that.
This brings us ever closer to our goal. Never being presumptive, we nevertheless remain cautiously optimistic and will, of course, publish material news as it becomes available and ready for dissemination to the public.
We continually thank God and our loyal shareholders and supporters who make all this possible.
But that would make Dunn & JB as evil as Madoff.
This thing may not be commercial. I have no inside knowledge one way or the other. But if it's not, why does the Whale continue to throw money at this?
My assumption is that the Whale has enough financial acumen to understand what a sunk cost is. If he/she is continuing to invest, they would not consider their investment to date as a sunk cost. Therefore, they see this well as probably being commercial, worthy of additional investment.
Isn't it probable that this well is commercial if the Whale continues to pour money into this company?
Update is out
October 3, 2022
Update: MJ02 In Israel
Dear Zion Shareholders and Supporters,
As we enter the Jewish holiday season, we are encouraged by the results of our recent testing operations, particularly with respect to the lower of two prospective zones we perforated near the final drilled depth of the well.
This lower zone, which is approximately twenty (20) meters in thickness, is our primary zone of interest.
Although we are encouraged, more work remains to be done, and we have no assurance the zone will produce hydrocarbons in commercial quantities or whether the well ultimately will prove to be successful.
We are currently facing a downhole obstacle in the form of heavy water influx from the upper zone inhibiting the potential flow from the lower zone. After consultation with outside experts, we plan to isolate and neutralize the heavy water influx by procuring a 4 1/2 inch packer and installing it below the heavy water zone and above our primary zone, but we have no assurance this procedure will be successful.
Following the annual operational hiatus for the next few weeks of Jewish holidays, we plan to begin operations to install the packer and test the flow rate of our primary zone.
We will continue to provide updates in accordance with good corporate practices and all legal requirements when we have definitive, material news.
We continually give thanks to God and our loyal shareholders and supporters who make all of this possible.
Sincerely,
?
With regard to the three year license request not being granted and yet the 6 month extension granted, I believe this was the result of the Ministry of Energy stating that they will not stand in the way of a discovery but also that they are reluctant to allow any new exploration. The MoE has a clear emphasis on pivoting Israel to green energy and as such, is not going to encourage hydrocarbon development on their land. I've come to this conclusion based on news and social media posts published by the MoE ( MoE has a pretty active LinkedIn page with almost all posts emphasizing their green initiatives). I won't debate the wisdom of the MoE direction here, but this just adds to what tisdal has been saying that MJ02 is probably our last dance with ZNOG
Does this mean they are just STARTING DST now???
Did they say if the perforations were for testing?
Tisdal, the other thing that keeps sticking with me is that they didn't vote to authorize additional shares. 800 million sucks and is a lot, but it is capped until next year. Don't you think that suggests something about what they think they have with this well also?
Talk about being in a pickle - ZNOG is caught between two governments with competing interests it seems....
Yes but my thought was that if the Ministry of Energy has a gag order on ZNOG, which prevented JB declaring that his vision had been fulfilled, that could explain JB's dour mood and his "not yet" statement.
I woke up thinking about mt last email exchange with my contact at the MoE(I posted the email exchanges in a previous post for anyone who would like to read them). My conclusion from the response I received was that ZNOG had asked the MoE not to provide any information regarding a commercial discovery. But what if my conclusion was wrong. What if it was the other way around? What if it was the MoE issuing the gag order. That conclusion seems to fit the current circumstances better.
I hate conspiracies, but if ZNOG has a commercial discovery like all the circumstantial evidence suggests, a gag order from the MoE is the most likely explanation
It seems that an Israeli lockdown could explain JB's demeanor as well
Exactly micro! The USA and the entire world standard of living is based on fossil fuels
There was a recent post that proposed the window is closing on demand for oil and as a result, ZNOG is going to miss out. I don't believe that for a number of reasons:
1) Oil as use as a fuel for automotive transportation is not going to end any time soon.
- Electrification of automobiles is still very expensive. A Tesla model 3 will currently set you back about $60,000. The lowest cost EV I could find is a Chevy Bolt at around $35,000.
- Energy density of oil-based fuel vs battery power is still significantly better by a multiple of X.
- The electric grid in the US would be overwhelmed if every automobile were suddenly EV.
- It will take years to create all the recharge stations needed for EV's (recently read an article where a journalist drove her EV from NO to Chicago. She reported that she spent more time recharging than sleeping and was very happy to get back to her gas-powered auto).
- The rare earth minerals required to produce EV's are just that - rare. And most are mined in countries hostile to the US/Israel.
2) Oil used as a fuel for aviation isn't going anywhere any time soon.
- I work in aviation engineering. We recently bid on a contract for a proposed fully electric aircraft that would have hauled ~20 passengers for about 200km. Two months later the company requests a requote because they are abandoning the fully electric concept for a hybrid concept.
3) Oil used as fuel for military applications isn't changing anytime soon.
- Militaries must be agile. EV's are not agile due to recharging constraints
4) Oil used for maritime applications isn't going to change soon.
- Electric propulsion for maritime has the same recharging constraints as other modes
5) Rail transportation will continue to use oil-based fuels
So demand for ZNOG discovered oil will still be needed by Israel into the foreseeable future and quantities above Israeli needs will continue as well. ZNOG has time
Sorry if I missed it in the list. I had to do a quick scan this AM as work has been busy. Thanks for assembling this list. Zion has a lot to answer with the metered flow of information
Tisdal
Could you please add "Has Zion submitted an application for Commercial Discovery?"
Thanks!
I'd like to know if ZNOG has submitted an application of Commercial Discovery with the Ministry of Energy
Hey buddy, really good analysis. What is a reasonable expectation regarding PE for O&G companies right now? 5X? 10X? 17X?
So would you assume that all the other testing (wireline logging and other testing) has been completed? If the DST is required by MoE, are they still trying to determine if the well is commercial, or has it been determined to be commercial and DST is just trying to size the reservoir?
"All well-testing, completion, and stimulation equipment are at the Haifa port or on location in Israel for the next phase of Zion’s operations.
Zion’s MJ-02 well has been completed through casing, liner, and cementing. Ongoing operations include well stimulation and DST testing. All necessary equipment to conduct the well stimulation and DST testing are in-country despite the global logistical backlog."
Here's some info I found on DST testing:
DST
1. n. [Well Testing]
Well tests conducted with the drillstring still in the hole. Often referred to as DST, these tests are usually conducted with a downhole shut-in tool that allows the well to be opened and closed at the bottom of the hole with a surface-actuated valve. One or more pressure gauges are customarily mounted into the DST tool and are read and interpreted after the test is completed. The tool includes a surface-actuated packer that can isolate the formation from the annulus between the drillstring and the casing, thereby forcing any produced fluids to enter only the drillstring. By closing in the well at the bottom, afterflow is minimized and analysis is simplified, especially for formations with low flow rates. The drillstring is sometimes filled with an inert gas, usually nitrogen, for these tests. With low-permeability formations, or where the production is mostly water and the formation pressure is too low to lift water to the surface, surface production may never be observed. In these cases, the volume of fluids produced into the drillstring is calculated and an analysis can be made without obtaining surface production. Occasionally, operators may wish to avoid surface production entirely for safety or environmental reasons, and produce only that amount that can be contained in the drillstring. This is accomplished by closing the surface valve when the bottomhole valve is opened. These tests are called closed-chamber tests.
Drillstem tests are typically performed on exploration wells, and are often the key to determining whether a well has found a commercial hydrocarbon reservoir. The formation often is not cased prior to these tests, and the contents of the reservoir are frequently unknown at this point, so obtaining fluid samples is usually a major consideration. Also, pressure is at its highest point, and the reservoir fluids may contain hydrogen sulfide, so these tests can carry considerable risk for rig personnel. The most common test sequence consists of a short flow period, perhaps 5 or 10 minutes, followed by a buildup period of about an hour that is used to determine initial reservoir pressure. This is followed by a flow period of 4 to 24 hours to establish stable flow to the surface, if possible, and followed by the final shut-in or buildup test that is used to determine permeability thickness and flow potential.
Alternate Form: drillstem test
It sounds like ZNOG is tempering expectations for the upcoming shareholders meeting. Any insight KyOil can add would be appreciated
To add to the optimism: With Europe tightening sanctions against Russian Oil & Gas, Brent crude is sitting at $112/barrel this morning......
Unfortunately the last email only says to contact the company regarding whether or not ZNOG has submitted an Application of Commercial Discovery. But at least it's a different response than my other emails all saying that Zion O&G had not submitted an Application
No worries. The way the board publishes uploads is a little wonky
No secret handshake - lol! I was worried if I'd made this public that the Ministry of Energy would be flooded with requests and my contact might get in trouble. This is a very nice person and I would not want to get them in any trouble.
Bottom line is I believe our folks at ZNOG have a commercial discovery and that it will be officially announced at the Shareholder meeting next month.
I have been debating whether or not to publish this information that I have, but I feel that it is appropriate to share given all that everyone in this community has shared over the years.
In 2018, during the MJ01 well effort, I made contact with an individual within the Israeli Ministry of Energy. I made a simple inquiry: had Zion Oil & Gas submitted an Application of Commercial Discovery as required in the event of a commercial discovery (KyOil outlined this requirement in a recent post)?
This is the 2018 email thread, redacted, but provided as proof that what I claim is true.
If I managed to upload these images correctly, you can see that I made 3 inquiries of my contact, and all three times I received a definitive reply that the ministry had not received a Commercial Discovery Application from ZN
Fast forward to MJ02 and I reached out to my contact in the Ministry of Energy in March 2022 asking if they had received a Commercial Discovery Application from ZNOG. Again I received a definitive reply that they had not received an application from ZNOG.
A month later, I sent one more request asking if an application had been submitted. This time, I received a different response, as I was instructed to write to the company regarding such information, rather than the definitive reply I had previously received both in 2018 & again in March 2022. No definitive denial. And this reply came after ZNOG's meetings with the Israeli government.
Here are the redacted 2022 emails:
Given that these email exchanges were with the same person over the last 4 years, I believe this indicates that ZNOG has submitted an Application of Commercial Discovery. (In the post preview, it appears the emails are somewhat jumbled, but generally read from the bottom up for the sequence of the emails)
Please do not bombard the Ministry of Energy with requests as it appears all inquiries will be directed to ZNOG at this point. And do your own DD.
Just make sure you're not making an emotional decision. Consider all the information we do have about this well. Granted it's trickled out, but the simple fact is that the development of this well has progressed past the commercial discovery to the reservoir size assessment. The equipment and technical staff that have been brought in are there to assess the size of the reservoir. The picture of the Christmas tree is a strong indication of a commercial discovery. KyOil and DJBradles explain these things better than I, so go back and review their posts since the Nov 2021 announcement.
Can you point me to the other site?
He is risen indeed!
Thank you for your quick response. It would seem that if they were completing a non-commercial well they would be committing a serious malpractice.
KyOil - The update mentioned the "final completion phase". Is this completion phase to prepare for testing or to prepare for production?
I hear you. I'm a lot more reserved now than I was back in 2018. I think most here right now are quite frustrated with the trickle of information from ZNOG regarding MJ02. If it weren't for a few oil insiders reading between the lines and interpreting, it would be very difficult to know what's going on. But I, like you, get what ZNOG is doing after what happened with MJ01 and the noise. Guinn was much more open and that made us much more a part of what was going on at ZN at the time. But the company got burned as a result with an SEC investigation and lawsuits. So I get it. I think ZNOG could say more and should, but that's not how Dunn and legal are playing this one. Anyway, appreciate seeing you again and the continuing dialog of the folks here.
Hey brother! Good to hear from you.
Could you imagine the impact of a significant oil and gas find in Israel would have? Europe could pivot its energy dependence away from Russia, further isolating Putin and Russia. Instant demand for Isreali oil. At $105/barrel.
Any word on the status of the gas pipeline from Israel through Greece into Europe?
If a petition were created to petition the board of directors to provide the information that has been highlighted, I would sign it. I think a petition to the board might have a better chance than a petition to the CEO
Thanks as always KyOil!
KyOil - Would appreciate your insights regarding the latest update