Zion’s Motion to Dismiss GRANTED

Notes by Federal Judge and likely the template for other lawsuits and investigations:

“The complaint does not allege specific facts to support a reasonable inference of bad faith, intentional misconduct, knowing violation of the law, or any other conduct for which the directors may be liable.”

“Plaintiffs do not allege specific facts to demonstrate that Defendants knew about the SEC investigation prior to the date that they disclosed that Zion had received a subpoena from the SEC...”

“The complaint fails to identify any specific actions by Defendants to explain how they violated the Code provisions. If Plaintiffs' theory of their complaint is sounded in fraud, based on their allegation that the proxy statement was ‘false and misleading,’ then the claims clearly are insufficiently pled.”

“I do not find that the Plaintiffs have pleaded with particularity any facts that suggest that Director Defendants acted in bad faith or otherwise consciously disregarded their oversight responsibilities in regard to Zion's prospects for discovery and extraction of oil. For the reasons discussed above, Defendants' Motion to Dismiss is GRANTED. ”

https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

No FACTS that Zion acted in bad faith - from seasoned federal judge (D):

“I do not find that the Plaintiffs have pleaded with particularity any facts that suggest that Director Defendants acted in bad faith or otherwise consciously disregarded their oversight responsibilities in regard to Zion's prospects for discovery and extraction of oil. For the reasons discussed above, Defendants' Motion to Dismiss is GRANTED. ”

https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

And yet again seasoned federal judge (D):


“The complaint fails to identify any specific actions by Defendants to explain how they violated the Code provisions. If Plaintiffs' theory of their complaint is sounded in fraud, based on their allegation that the proxy statement was ‘false and misleading,’ then the claims clearly are insufficiently pled.”


https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

Again seasoned fed judge (D) makes it clear Zion didn’t know:

“Plaintiffs do not allege specific facts to demonstrate that Defendants knew about the SEC investigation prior to the date that they disclosed that Zion had received a subpoena from the SEC...”

https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

Seasoned Federal Judge (D) supports Zion’s position:

“The complaint does not allege specific facts to support a reasonable inference of bad faith, intentional misconduct, knowing violation of the law, or any other conduct for which the directors may be liable.”

https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

Interesting what the Israel Energy Minister said

...a thinly-pled basis for bringing the case...

...If Plaintiffs' theory of their complaint is sounded in fraud, based on their allegation that the proxy statement was "false and misleading," then the claims clearly are insufficiently pled.

Read all comments by the judge:
https://law.justia.com/cases/federal/district-courts/delaware/dedce/1:2018cv01399/66294/26/

A Delaware federal judge has tossed a shareholder derivative suit claiming Zion Oil & Gas officers mislead investors...

Seemed to happen the day before Thanksgiving.

https://www.law360.com/articles/1223733/zion-oil-gas-escapes-investor-suit-in-del-over-sec-probe

Very interesting what the Israel gov geologist says.

“The first real full scale 3D seismic survey that has been done in the land part of Israel”

I think that settles that old discussion of whether it was or not

New email and video - https://www.zionoil.com/updates/video-data-acquisition-for-largest-onshore-3-d-seismic-survey-in-israels-history-completed/

From what you can remember, which predictions have you made that you see became reality?

Which PR pump did they claim they found oil without mentioning that they are unsure of commercial ability?

I see the PR that says they found evidence of hydrocarbons followed by a statement that they don’t know if it is producible.

“Not only is it the largest 3-D survey in Israel’s history, but the data acquisition was completed within a time frame not thought possible due to the hard work, determination, faith, and courage of our team,” stated Zion’s President, Bill Avery. “We are moving forward with our exploration plan undeterred.”


https://www.zionoil.com/updates/zion-oil-gas-finishes-data-acquisition-for-largest-onshore-3-d-seismic-survey-in-israels-history/

Just posted on website: Zion Oil & Gas Finishes Data Acquisition for Largest Onshore 3-D Seismic Survey in Israel’s History

3-D seismic acquisition phase completed; processing and interpretation remain.

DALLAS, Texas, and CAESAREA, Israel, October 16, 2019

Zion Oil & Gas, Inc. (Nasdaq: ZN) announces the completion of data acquisition for its Megiddo-Jezreel 3-D seismic program.

“The crew has successfully completed the recording of the Megiddo-Jezreel 3-D seismic program, and our contractor logged over 19,000 manhours incident-free along with zero environmental damage,” Zion’s COO, Robert Dunn said. “We have accomplished a significant task – the recording of the largest onshore 3-D in Israel’s history, and we look forward to the interpretation of the data set.”

“Not only is it the largest 3-D survey in Israel’s history, but the data acquisition was completed within a time frame not thought possible due to the hard work, determination, faith, and courage of our team,” stated Zion’s President, Bill Avery. “We are moving forward with our exploration plan undeterred.”

Zion’s seismic acquisition covered over 72-square kilometers within its Megiddo-Jezreel license. The final pickup phase of the equipment has begun and will be completed by October 16th with the demobilization target by October 20th.

Zion will send the data for processing to Agile Seismic, located in Houston, Texas.

“Our team in Israel has done an outstanding job getting this done so quickly,” expressed Zion’s CEO, John Brown. “Please continue to pray for our next steps as we process and interpret the data.”

Zion Oil & Gas, a public company traded on NASDAQ (ZN), explores for oil and gas onshore in Israel on their 99,000-acre Megiddo-Jezreel license area.

https://www.zionoil.com/updates/zion-oil-gas-finishes-data-acquisition-for-largest-onshore-3-d-seismic-survey-in-israels-history/

Isaiah 43:19
Behold, I am doing a new thing;
now it springs forth, do you not perceive it?

They will do 72 sq km. They’ve done 30. Thirty is already a record.

Seismic has begun. 30sq km done. Looks like they will finish acquiring fairly soon.

Seems like many predictions are off and things happening fast

I encourage you to go here to enhance your information: https://lmgtfy.com/?q=capped+oil+well



Highlight:

Wells that are no longer being used but might be needed in the future can be sealed with a cap that covers the top of the well casing pipe to prevent unauthorized access and contamination of the well. A cap is a temporary groundwater protection solution that allows a well to be used at a later time.

With the clarity of hindsight though, we now know that Probes Reporter was deceptive. The SEC was manipulated.

And the Financial Times was lying. There was oil and a petroleum system. (Not commercial yet.)

Shareholders should be glad that Zion will continue, face down the attack, and do what the shareholders want them to do: find Israel’s oil.

Excellent.

Reality:

Many onshore wells have been drilled in Israel by multiple companies. This is the first 3-D (non-academic) and largest seismic project to date.

There are industry reasons 3-D seismic has yet to be shot and reasons for it to be done now.

From the company and in 10-k from 2017:

Larger oil and gas exploration companies may choose to conduct extensive analytical pre-drilling testing such as 3-D seismic imaging, the drilling of an expendable “pilot” well or “stratigraphic test” to collect data (logs, cores, fluid samples, pressure data) to determine if drilling a well capable of producing oil or gas (full completion with casing and well testing) is justified. The use of pilot or stratigraphic tests is often used in areas where there is little or no offset well data, like Israel, where our exploration license area is located.
While 3-D seismic imaging data can be more useful than 2-D data in identifying potential prospects, its acquisition, and processing costs can potentially be multiples greater than that for 2-D data.

In addition to using 2-D seismic technology prior to drilling, we have historically also utilized gravity and magnetic data, built cross-section maps from offset wells and utilized geophysical analysis from similar geologic targets. We believe that the additional months, delays and costs associated with more extensive pre-drilling testing typically undertaken by larger oil and gas exploration companies are not necessarily justified when drilling vertical or near-vertical exploration wells (as we have historically been doing).

Nonetheless, the absence of more extensive pre-drilling testing may potentially increase the risk of drilling a non-producing well, which would, in turn, result in increased costs and expenses. Additionally, we are typically engaged in drilling deep onshore wildcat wells in Israel where only approximately 500 total wells have ever been drilled, the vast majority of which are relatively shallow. As such, exploration risks are inherently very substantial.

The key is proving “scam”. What’s your hard evidence?

What they say to this accusation:

Zion has been a publicly reporting company since 2007 whose stock has been listed on Nasdaq since 2009, in which time it has filed, as required, audited annual reports on Form 10-K and quarterly reports on Form 10-Q, in compliance with all relevant SEC and Nasdaq rules. We would ask that you refer to those filings to help answer any questions you may have about Zion.

No, we just get the reality that this is difficult work, trailblazing, and we don’t just care about the stock price. There are many factors.

Why *only* care about stock price? It makes sense that the price will fluctuate drastically until Zion finds oil or comes to an end. I want them to find oil or at least move the ball down the field so other companies can take it from there.

The vision captures my imagination and attention. The challenges make the drama even more interesting.

I’m a shareholder aligned with the vision and it is exciting.

“In Israel, in order to be a realist you must believe in miracles.”

- David Ben-Gurion

Thank you for the clarity and enjoyment!

Agree! When do you think they might do another raise?

Ha, those were extremely small academic studies unrelated to oil/gas exploration.

My statement still stands

No, this is incorrect.

That’s why this is the first 3-D seismic and all exploratory / producing wells onshore in Israel have ONLY used 2-D to date.

Most exploratory wells use 2-D and will expand to 3-D for further field understanding. It really depends on the supply / region / area / situation.

Zion’s seismic methodology is common and more cost effective given the situation despite it not fitting a different narrative.

Agreed. Several companies have drilled in Israel in the last decade (and before) and continue to have plans to drill - Givat Olam, Afek (Genie), etc - and Zion is performing the first 3-D seismic (for commercial purposes), the largest (the other was a small academic study), and the only planned one in the country currently.

The entire search for oil/gas onshore Israel has employed 2-D to date. Zion is the first with the 3-D.

The whole “should have done 3-D prior” is a (perhaps understandable?) statement of ignorance rather than a real understanding of the industry in Israel it seems.

How soon do you think they will come out with another raise?

Why should we be concerned with dilution prior to a solid discovery?

What are your thoughts about this view of dilution not being a big deal?
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution

Also, when do you think they will come out with another raise? How soon? Do you think you will participate? Or do you only purchase through a broker?

Why the value per share does not really get diluted when more shares are issued in subsequent or ongoing offerings like the DSPP -

https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution

Wow! Fair enough. Do what you need to do and the discussion is with it. Warn those who may be affected negatively. The prospectus is full of warnings.

For me, I want israel to have energy independence and willing to risk.

Completely fair.

Did you cash out in your loss position and wish to warn others?

How do you know more than Zion’s disclosure?

“SEC first informed Zion of a non-public, fact-finding inquiry by subpoena for production of documents received on June 21, 2018...”

https://www.zionoil.com/faqs

Where’s your source of better information? What have you heard since?

Facts on SEC inquiry: it is a fact-finding inquiry that most companies do not disclose. Over a year and no enforcement. Seems to be much ado about nothing.

NASDAQ issue: they will have to disclose publicly at the time they have to. Why cross bridges before they get there?

As a small specialized exploration company, why would anyone want them to be judged as a larger company before they get there?

Sure, they are in a tough business, doing tough work, and in a tough area to do it.

Those realities makes it easy to point out discrepancies for those who look.

But, these realities also make it attractive to those who connect with the purpose and vision of the company.

From World Oil (April):

Onshore, “there has only been moderate success,” said Gardosh. “But recently, a well was drilled by Zion, south of Tiberia. It was a ‘dry’ well with oil shows, but not a commercial producer. But they’re (Zion) still optimistic that they can produce from the general area. I hope they’ll continue.”

https://www.worldoil.com/news/2019/2/22/israels-chief-geologist-says-latest-bidding-round-offers-changes-and-upgrades

New Senior VP and COO -

https://www.zionoil.com/updates/zion-update-new-senior-vp-and-coo/

Interesting pic on the website on the 3D survey design

Who buys direct and why?

Just got this email on direct program:
https://mailchi.mp/zionoil/30-days-remaining?e=c5c5ab0b67

Your timeline is off. The $6range high was months before the announcement about the “encountered oil”.

Seems like investors were betting early in the drilling in hopes of hitting all three targets in one:
1) petroleum system
2) reservoir
3) producibility

They got #1 and bringing in 3D for 2&3. Hard slog

Yolanda Holtzee is likely Fuzzy Panda. Google these