Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
kyoil, u can check my accuracy on this of course
so they were still in the process of testing the lowest zone 16415-16500 at the time of the PR
so they will probably wait to see if a natural flow(commercial or otherwise) is created once the completion fluids have been emptied
if the natural flow is encouraging enough but not yet sufficient enough to be commercial they may use stimulation techniques again to encourage a greater natural flow
which may or may not be commercial
if commercial pump to raise funds to support further teseting as kyoil says
at end of that lower zone testing process-proceed to the upper 3 zones-
kyoil, are the upper 3 both cretaceous and jurassic - or including the cretaceous are there more than 3 upper zones to test? I thought the upper 3 were all jurassic
realize contradicting considerations- the increased time to trip etc of lower zones and short live of packers at deep depths- but to test upper zones before finishing lower zones would create an additional step later,and as kyoil says to find the most direct route to 5000 bopd so they could internally fund continued testing while pumping
hopefully by the next PR they would be able to say it is commercial
if not the next PR
if not there is a commercial field(w aid of more seismics etc) but not a commercial well
and if not presently commercial;be able to
1)drill laterally from within the well bore
2)drill from elsewhere on drill pad or
3)drill from a different location on their license area
from the PR:
"As of the writing of this update, when swabbing, the data confirms the well artificially flows at a rate of approximately 90-110 barrels of fluid per day in the zone between 16,415 and 16,500 ft. We are still swabbing completion fluid as of this writing and the results of the well are inconclusive at this point as to whether the well will establish natural flow and what the volumetric contribution of oil and water will be.
5. We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones, and there are still many questions yet to be answered. However, we can say with reasonable confidence that the formation is tight with low permeability and has few natural fractures. This is not uncommon, and often times requires advanced stimulation techniques to help determine the well’s commercial potential. "
thank you for explaining the temporary condition of water due to acids injected into rock-and thus why it was to early to say how much water would flow under natural conditions
"Now the casing is set and perforated with acid cleaning up the perforations. The acid is injected into the rock at a pressure higher than the formation pressure. With time the acid creates water as it reacts with rock. So, high pressure water has now been added to the formation acid (also lots of CO2 comes out). This is called completion fluids. In the PR, it was stated they were in the transition of swabbing completion fluids and had just began seeing formation fluids and were disappointed in the formation flow rate circa 100 bopd. Since water from the acid is still coming out, the PR said they could not yet calculate the formation water cut. The swabbing up stroke removes the wellbore pressure and the formation fluids can momentarily flow into the wellbore with near zero backpressure. This is an ideal condition to start natural flow (not requiring a pump to keep flowing."
4 days ROUNDTRIP-not 1 way geo- to bottom of hole plus idle 12 hrs /day really doesnt leave a lot of time for the actual project as you say,plus the packers which last only 5 days at the bottom are costing time and money also
wonder whether the contract w the kibbutz restricts nighttime working?
arent there ways to light that would highly mitigate any safety risk? of course such lighting cost money also
Price Analysis
Over the past few years, the prices for packers and plugs have shown a downward trend due to relatively small demand, high competition and a decline in commodity prices, such as steel and rubber.
The prices for packers are driven by their application and/or a unique design that is applicable to a particular field. Temporary/retrievable packers cost more than permanent packers due to the complexity of the design. Prices for packers range from US$6,000 to US$300,000 each, depending on their application, i.e. HP/HT, H2S content, chemicals resistance. Plugs range in prices from US$2,000 to US$50,000. Packers made of special alloys (inconel, monnel, etc.) can cost up to US$300,000 and require a lead time of up to one year to be delivered.
Cost Analysis
Packers are made of steel and elastomers/fluoroelastomers (high-quality synthetic rubber), with the rubber representing around 50% of the cost of the packer. The steel and rubber grades used during manufacturing are dependent on the application requirements and are driven by the hostility of the environment, i.e. HP/HT and H2S content. The metals used are low-alloy steels, high nickel alloys, chromium grade alloys, PH stainless steels, and cast iron. Up to 10 components may be included when manufacturing elastomers, with the major component being polymer as an alternative to natural rubber.
Most plugs are made of composite materials, cast iron, brass, aluminium and rubber. Hence, these products are highly driven by commodities prices.
there is no situation that i can see where zn's operations could be interfered with-sec event is a civil investigation apparently concerned w proper reporting in zn's statements to investors -and unless its still highly a swamp sec-which it shouldnt be though the political transtion is still occurring in the agencies, nothing would rise to the level of criminal intent-and even if it did sanctions would be only against whatever officer was found to have such-there is no criminal intent
absent a criminal conviction of zn for stock fraud nobody can interfere w zn fundraising-only oversee that its done w proper notice to investors
this is a template provided by sec for 10 q
"Instruction. A legal proceeding need only be reported in the 10-Q filed for the quarter in which it first became a reportable event and in subsequent quarters in which there have been material developments"
as i explained in previous posts, an action or event does not occur until zn receives notice from sec or some other duly authorized authority -which occurred june21 -as noted by zn's july 11 8k
zn used typical boilerplate used by thousands of companies in addressing legal risks in their 10q's for last 2 quarters and 10k filed mar 12
The last 10q filed aug 8 repeats the risk factor re the legal proceedings at least 3 times -fulfilling zn's legal duty to notify shareholders of all possible risks
a tweet by a shorter and/or an incomplete screenshot -with part of the page not revealed- of denial of foia request on grounds such may interfere w enforcement proceedings (re who?-or re rule making? not enough info nor a proper channel) does not rise to the level of legal notice that zn is being investigated- tweets and incompleted screenshots of foia requests are not duly authorized legal notices to zn of any investigation of zn- re denial of pandas foia request
firms which do this kind of ambulance chasing are the worst of the worst,trying to create liability where it doesnt exist
zn legally has 20 days to respond to any legal action and zn responded within 20 days both to sec re docs and to the world /investors with the july 11 8k
this 20 day period to respond is set in stone across the entire legal system for many decades and cannot be changed in this case nor any unlawful change retroactively applied.
so i dont see a legitimate case re shareholder suit- there is no legal theory to hold zn liable for sec investigation -shareholders are not guaranteed bad surprises will not happen-thats why filings detail risks in page after page
1st thing' i'd do after gathering the evidence,which might require depositions, is move for summary judgment
https://dictionary.law.com/Default.aspx?selected=2063
if the judge decides no reasonable person could decide against zn,the judge can dismiss the case
the case is properly brought in the federal court (bc of interstate commerce and bc plaintiffs desire more swampy fed ct rather than conservative texas state court) of the N district of Texas,where zn's principal offices reside
attemps to bring the case elsewhere are just show boating and lawyers know the cases would be consolidated into one case,almost certainly in texas
zn followed proper protocol in its sec filings -as determined by zn's in-house counsel plus former judge and lawyer ceo victor plus zn's compliance officer plus b/d's
july 11 8k satisfying zn's legal requirement to notify investors within 20 days
Item 8.01 Other Events
On Thursday, June 21, 2018, Zion Oil & Gas, Inc. (“Zion” or “Company”) received a subpoena to produce documents from the Fort Worth office of the Securities and Exchange Commission ("SEC"), informing Zion of the existence of a non-public, fact-finding inquiry into the Company. Zion, an SEC-reporting company with audited financial statements in the US and Israel for over a decade, will fully cooperate with this investigation. Until receipt of the subpoena on June 21, 2018, Zion had no previous communication with the SEC on this issue and was unaware of this investigation. The SEC stated that "the investigation and the subpoena do not mean that we have concluded that [Zion] or anyone else has violated the law."
While we acknowledge that our response to the subpoena will necessarily entail significant costs and management's attention, it should have no effect on Zion's ongoing testing procedures on its Megiddo-Jezreel #1 well. The Company does not intend to comment further on this matter unless in the Company’s judgment, it merits further comment or public disclosure.
p,34 of 1st quarter 10q-at which time there was no legal notice of any proceeding
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to routine litigation, claims, or disputes in the ordinary course of business. We defend our company vigorously in all such matters. However, we cannot predict with certainty the outcome or effect of any of the litigation or investigatory matters or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of these lawsuits and investigations.
ITEM 1A. RISK FACTORS
During the quarter ended March 31, 2018, there were no material changes to the risk factors previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017.
2nd qtr 10q filed 8-8 notes the sec investigations at least 3 times-here are 2 of such notices to investors as follows:
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to routine litigation, claims, or disputes in the ordinary course of business. We defend our company vigorously in all such matters. However, we cannot predict with certainty the outcome or effect of any of the litigation or investigatory matters or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of these lawsuits and investigations.
U.S. Securities and Exchange Commission Subpoena
On June 21, 2018, we received a subpoena to produce documents from the Fort Worth office of the Securities and Exchange Commission (“SEC”), informing the Company of the existence of a non-public, fact-finding inquiry into the Company. Until receipt of the subpoena on June 21, 2018, Zion had no previous communication with the SEC on this issue and was unaware of this investigation. The SEC stated that “the investigation and the subpoena do not mean that we have concluded that [Zion] or anyone else has violated the law.”
We are cooperating with the SEC in this investigation. We are unable to predict when this matter will be resolved or what further action, if any, SEC may take in connection with it.
ITEM 1A. RISK FACTORS
During the quarter ended June 30, 2018, Zion added one additional risk factor when compared to the risk factors previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017. The new risk factor pertains to the SEC subpoena to produce documents on June 21, 2018.
On June 21, 2018, the Fort Worth Regional Office of the SEC informed Zion that it is conducting an investigation and requested that we voluntarily provide certain information and documents in connection with its investigation. We are cooperating fully with the SEC in connection with its investigation. Investigations of this nature are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, the SEC investigation can have an adverse impact on us because of legal costs, diversion of management resources, and other factors. Determining reserves for this investigation is a fact-intensive process that requires significant judgment. The investigation could also result in reputational harm to Zion and may have a material adverse effect on Zion’s current and future business and exploratory activities and its ability to raise capital to continue our oil and gas exploratory activities.
https://www.sec.gov/files/form10-q.pdf
STRAIGHT UP
before i begin, i should remind theres a difference between a commercial field and a commercial well-from what i've heard from a source beyond sec's reach there's a commercial field but that does not necessarily mean this is a commercial well=but it may take a lot more testing to determine whether the well itself is commercial-can u imagine the 1st ghawar well as being difficult to test and people on that basis denying there is a commercial field there!!
this would help explain my buddy steves word of a gargantuan field
dolphin-yes-this is where its whittled to 300- i guess i shouldnt be surprised -seen this my entire life
dolphin-"The well cannot be said to be commercial YET. It ALSO cannot be said to be non-commercial in the future. They simply are NOT FINISHED TESTING YET." VERY TRUE
jryan- you were gone for a few days while kyoil explained the 3 levels of testing w flow testing being the last level-they had tested all zones on levels 1 and probably 2 in previous months but hadnt flow tested yet -so were starting on bottom zone 1st -where the oil was discovered in drilling mud-PR notes they still need to test 3 upper zones
"Not a single mention about gas either". kyoil can explain better but the testing fluids may have reacted w gas- i dont know - kyoil will say
spike- "She's WAY oversold as well. They just can't tell us it's "Commercial" right now" VERY TRUE
BROTHERS- Someone contacted IR recently who said John has already used 20 million of his own money in Zion. Maybe he is currently contributing? Yes tisdal reported john brown had contributed 20 million of his own money-more than anybody else-probaby a good portion of his salary
Tisdale- STRAIGHT UP
the only mention of the 2nd deep zone is below-
doesnt sound like they have finished flow testing for even the deepest zone yet to determine a natural flow, let alone zone 2, nor have they begun flow testing of the 3 upper zones(which we already knew)
i wondered a long time ago how much work they could get done when it takes 4 days to trip in and out of the bottom zones,as dustin mentioned at the june 5 stockholder meeting(a problem they will have to solve?)
so yes right now they dont have enough info to know whether its commercial yet-they need to finish flow testing of 2 bottom zones (see below) and flow test the 3 upper jurassic zones-so its dishonest for anybody to say its not commercial -they dont have enough info to know that yetSAME PLACE WE WERE BEFORE-NOT KNOWING WHETHER COMMERCIAL YET
as spike noted it was already insane for pps to be below 5 dollars-but thats due to all the games
PR says:
"Have we swabbed enough completion fluid and formation fluid from zones 16,415-16,500 ft and 16,080 – 16,215 ft to effectively allow for the formation to naturally flow, and will the encouragement of that natural flow, if established, allow for commercial amounts of oil to flow? [sounds like not really finished w 2 bottom zones yet -still have questions they want to resolve re bottom zones]
Drilling analysis and petrophysical analysis suggest that there may be more potential oil-bearing zones above the Triassic boundary, which was internally picked at approximately 15,175 ft. Zion chose to focus on the Triassic because of the regional success in Givot Olam’s Meged Field. Subject to raising adequate financial resources, of which no assurance can be provided, we plan to continue with testing of the multiple zones of interest higher in the well."
they dont know whether it is commercial yet bc they have only flow tested-the 3rd level of testing- of the lowest 1 or perhaps 2 of the 5 zones of interest 16,415 ft to 16,500 and not clear they have finished flow testing the 16080 t0 16215 triassic
they apparently have not finished flow testing the other triassic zone of interest-only talk about flow testing the lowest zone:
they were able to separate the 2 lower zones w the packers-which is why they separately talk about the 2 zones. they started with the deepest zone-which they still have questions about-see near end of pr:
/-Have we swabbed enough completion fluid and formation fluid from zones 16,415-16,500 ft and 16,080 – 16,215 ft to effectively allow for the formation to naturally flow, and will the encouragement of that natural flow, if established, allow for commercial amounts of oil to flow?
Drilling analysis and petrophysical analysis suggest that there may be more potential oil-bearing zones above the Triassic boundary, which was internally picked at approximately 15,175 ft.
'We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones"
and they have not yet tested the 3 upper (jurassic) zones
"there are multiple identifiable targets and objectives that have been observed based on drilling, testing and petrophysical analysis, which we have yet to test."
bc of the delays noted and the pressure to get a pr out-they have much more testing to do but the market does what it does best - an absolutely knee jerk over-reaction-which is the most consistent thing i've seen re the market
they dont know whether bottom 2 zones are commercial yet and they havent even flow tested the top 3 zones(which we knew)
at a rate of approximately 90-110 barrels of fluid per day in the zone between 16,415 and 16,500 ft. We are still swabbing completion fluid as of this writing and the results of the well are inconclusive at this point as to whether the well will establish natural flow and what the volumetric contribution of oil and water will be.
We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones,
News
Zion Oil & Gas Confirms Active Petroleum System in Megiddo-Jezreel #1 Well In Israel
Additional Testing is Needed to Evaluate Reservoir Potential
DALLAS and CAESAREA, Israel, Aug. 16, 2018 /PRNewswire/ -- Zion Oil & Gas, Inc. (NASDAQ: ZN) announces that it is completing the initial testing program of its primary zones located within the Triassic-age Mohilla Formation of the Megiddo-Jezreel #1 (MJ #1) well.
https://mma.prnewswire.com/media/731867/LicenseMap_Zion_Oil.jpg
Zion's President and Chief Operations Officer, Dustin Guinn, makes the following statement concerning the MJ #1 well:
Zion has a sincere desire to be transparent in the details of our operations with our shareholders, for a number of reasons. Most of our shareholders share a passionate alignment with the vision of Zion that extends beyond financial success. We view our shareholders as partners in this journey, which has been difficult to say the least. As a result, this operations update will be longer and more detailed than most and will be subdivided to try to answer some of the most common questions.
Did We Find Oil?
We encountered oil at a depth of between 16,415 ft and 16,500 ft during drilling operations, when we circulated bottoms up. The oil was separated and tested internally and externally through our mudlogging company's chromatograph, indicating "Light Oil" based on the chemical composition of the analyzed stream.
Third party petrophysical analysis of our open hole logs continues to suggest that oil is located in this zone as well as other zones of interest.
While testing the zone between 16,415 ft and 16,500 ft, we perforated the casing and performed a small acid stimulation job. Upon circulation of the acid out of the wellbore, minor amounts of oil were observed while taking small samples of the fluid being circulated out of the wellbore.
Following the circulation of the fluid after the stimulation job, we ran back in the hole and began to swab the well to attempt to see if the well would flow. As of the writing of this update, when swabbing, the data confirms the well artificially flows at a rate of approximately 90-110 barrels of fluid per day in the zone between 16,415 and 16,500 ft. We are still swabbing completion fluid as of this writing and the results of the well are inconclusive at this point as to whether the well will establish natural flow and what the volumetric contribution of oil and water will be.
We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones, and there are still many questions yet to be answered. However, we can say with reasonable confidence that the formation is tight with low permeability and has few natural fractures. This is not uncommon, and often times requires advanced stimulation techniques to help determine the well's commercial potential.
Is the MJ #1 a Successful Well?
This is a question that can be answered in a number of ways:
In considering the success rate of wildcat wells, with little to no offset data, in our opinion the MJ #1 could be considered a geologic success as follows:
Is the well commercially successful with the information that we currently have, as of the writing of this update, during the testing of the deepest zones of interest? The answer is no. The drilling and testing on this well was much more costly than we expected, and as of today cannot be considered commercially successful.
What Caused Delayed Testing Results?
Testing of the MJ #1 well has taken longer than anticipated for a number of reasons, some of which we wish to outline:
We made the decision to test this well only during daylight hours. Given that it was a wildcat well, we decided to only operate during daylight hours and emphasize safe operations over time and cost.
We continued to observe Shabbat, which limited testing operations from 7:00 am Sunday morning through 7:00 pm Friday evening.
In our opinion, the most impactful operational delay resulted from what appears to have been ineffective casing guns and charges, sourced locally in Israel and initially used to perforate all the zones. We purchased additional casing guns and charges from the United States at the commencement of testing, which fortunately, allowed us to re-perforate all the zones of interest to achieve injectivity and properly stimulate the well.
The primary zones we have been testing are all located at depths greater than 16,000 feet. Every time we had to run in the hole and out of the hole took, on average, four days.
Every time we wanted to isolate a particular zone to test, we had to install an isolation tool called a packer, which contains rubber elements. Due to the very high well temperature, these packers would only last, on average, approximately five days. When they failed, we had to pull the pipe out of the hole and replace the packer, which added, on average, four days.
What are the Future Plans?
We have gained a tremendous amount of geological knowledge, but there are still a lot of unresolved questions that need further evaluation:
If answers to the foregoing questions above are positive, and we raise the needed financial resources, we plan to acquire additional focused seismic data to help guide potential field development and continue with Zion's vision to help make Israel energy independent.
Management, along with all of our staff, want to sincerely thank you for your continued support. This mission has been one of the most difficult challenges we have undertaken, and we are not done yet. We also recognize that we are completely shareholder funded and as a result, this is your company. There is so much left to do, and it is an honor to represent our shareholders in this mission.
There will be more updates to come as we know there are many more questions regarding the administration and regulatory issues facing Zion that many of you have.
"But everything exposed by the light becomes visible and everything that is illuminated becomes a light"
Ephesians 5:13
"….The LORD has broken through my enemies before me, like a breakthrough of water"
2 Samuel 5:20
FORWARD-LOOKING STATEMENTS: Statements in this communication that are not historical fact, including statements regarding Zion's planned operations, anticipated attributes of geological strata being drilled or tested, the presence or recoverability of hydrocarbons, operational risks in testing and well completion, timing and potential results thereof and plans contingent thereon are forward-looking statements as defined in the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that are subject to significant known and unknown risks, uncertainties and other unpredictable factors, many of which are described in Zion's periodic reports filed with the SEC and are beyond Zion's control. These risks could cause Zion's actual performance to differ materially from the results predicted by these forward-looking statements. Zion can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.
Contact Info:
Zion Oil & Gas, Inc. (NASDAQ: ZN)
12655 North Central Expressway, Suite 1000, Dallas, TX 75243
Andrew Summey
Telephone: 888-891-9466
Email: andrew.summey@zionoil.com
www.zionoil.com
https://mma.prnewswire.com/media/731868/Zion_Oil_Gas.jpg
https://mma.prnewswire.com/media/731869/Zion_NEFET_Circle_ZN.jpg
https://c212.net/c/img/favicon.png?sn=DA82573&sd=2018-08-16 View original content with multimedia:http://www.prnewswire.com/news-releases/zion-oil--gas-confirms-active-petroleum-system-in-megiddo-jezreel-1-well-in-israel-300698633.html
SOURCE Zion Oil & Gas, Inc.
the only mention of the 2nd deep zone is below-
doesnt sound like they have finished flow testing for even the deepest zone yet to determine a natural flow, let alone zone 2, nor have they begun flow testing of the 3 upper zones(which we already knew)
i wondered a long time ago how much work they could get done when it takes 4 days to trip in and out of the bottom zones,as dustin mentioned at the june 5 stockholder meeting(a problem they will have to solve?)
so yes right now they dont have enough info to know whether its commercial yet-they need to finish flow testing of 2 bottom zones and flow test the 3 upper jurassic zones-so its dishonest for anybody to say its not commercial -they dont have enough info to know that yet
"Have we swabbed enough completion fluid and formation fluid from zones 16,415-16,500 ft and 16,080 – 16,215 ft to effectively allow for the formation to naturally flow, and will the encouragement of that natural flow, if established, allow for commercial amounts of oil to flow?
Drilling analysis and petrophysical analysis suggest that there may be more potential oil-bearing zones above the Triassic boundary, which was internally picked at approximately 15,175 ft. Zion chose to focus on the Triassic because of the regional success in Givot Olam’s Meged Field. Subject to raising adequate financial resources, of which no assurance can be provided, we plan to continue with testing of the multiple zones of interest higher in the well."
They dont know whether it is commercial yet bc they have only flow tested-the 3rd level of testing- of the lowest 1 or perhaps 2 of the 5 zones of interest 16,415 ft to 16,500 and not clear they have finished flow testing the 16080 t0 16215 triassic
they apparently have not finshed flow testing the other triassic zone of interest-only talk about flow testing the lowest zone:
/-Have we swabbed enough completion fluid and formation fluid from zones 16,415-16,500 ft and 16,080 – 16,215 ft to effectively allow for the formation to naturally flow, and will the encouragement of that natural flow, if established, allow for commercial amounts of oil to flow?
Drilling analysis and petrophysical analysis suggest that there may be more potential oil-bearing zones above the Triassic boundary, which was internally picked at approximately 15,175 ft.
We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones
and they have not yet tested the 3 upper (jurassic) zones
there are multiple identifiable targets and objectives that have been observed based on drilling, testing and petrophysical analysis, which we have yet to test.
bc of the delays noted and the pressure to get a pr out-they have much more testing to do but the market does what it does best - an absolutely knee jerk over-reaction-which is the most consistent thing i've seen re the market
News
Zion Oil & Gas Confirms Active Petroleum System in Megiddo-Jezreel #1 Well In Israel
Additional Testing is Needed to Evaluate Reservoir Potential
DALLAS and CAESAREA, Israel, Aug. 16, 2018 /PRNewswire/ -- Zion Oil & Gas, Inc. (NASDAQ: ZN) announces that it is completing the initial testing program of its primary zones located within the Triassic-age Mohilla Formation of the Megiddo-Jezreel #1 (MJ #1) well.
https://mma.prnewswire.com/media/731867/LicenseMap_Zion_Oil.jpg
Zion's President and Chief Operations Officer, Dustin Guinn, makes the following statement concerning the MJ #1 well:
Zion has a sincere desire to be transparent in the details of our operations with our shareholders, for a number of reasons. Most of our shareholders share a passionate alignment with the vision of Zion that extends beyond financial success. We view our shareholders as partners in this journey, which has been difficult to say the least. As a result, this operations update will be longer and more detailed than most and will be subdivided to try to answer some of the most common questions.
Did We Find Oil?
We encountered oil at a depth of between 16,415 ft and 16,500 ft during drilling operations, when we circulated bottoms up. The oil was separated and tested internally and externally through our mudlogging company's chromatograph, indicating "Light Oil" based on the chemical composition of the analyzed stream.
Third party petrophysical analysis of our open hole logs continues to suggest that oil is located in this zone as well as other zones of interest.
While testing the zone between 16,415 ft and 16,500 ft, we perforated the casing and performed a small acid stimulation job. Upon circulation of the acid out of the wellbore, minor amounts of oil were observed while taking small samples of the fluid being circulated out of the wellbore.
Following the circulation of the fluid after the stimulation job, we ran back in the hole and began to swab the well to attempt to see if the well would flow. As of the writing of this update, when swabbing, the data confirms the well artificially flows at a rate of approximately 90-110 barrels of fluid per day in the zone between 16,415 and 16,500 ft. We are still swabbing completion fluid as of this writing and the results of the well are inconclusive at this point as to whether the well will establish natural flow and what the volumetric contribution of oil and water will be.
We remain hopeful but do not yet know if there is producible oil in commercial quantities within our deep primary zones, and there are still many questions yet to be answered. However, we can say with reasonable confidence that the formation is tight with low permeability and has few natural fractures. This is not uncommon, and often times requires advanced stimulation techniques to help determine the well's commercial potential.
Is the MJ #1 a Successful Well?
This is a question that can be answered in a number of ways:
In considering the success rate of wildcat wells, with little to no offset data, in our opinion the MJ #1 could be considered a geologic success as follows:
Is the well commercially successful with the information that we currently have, as of the writing of this update, during the testing of the deepest zones of interest? The answer is no. The drilling and testing on this well was much more costly than we expected, and as of today cannot be considered commercially successful.
What Caused Delayed Testing Results?
Testing of the MJ #1 well has taken longer than anticipated for a number of reasons, some of which we wish to outline:
We made the decision to test this well only during daylight hours. Given that it was a wildcat well, we decided to only operate during daylight hours and emphasize safe operations over time and cost.
We continued to observe Shabbat, which limited testing operations from 7:00 am Sunday morning through 7:00 pm Friday evening.
In our opinion, the most impactful operational delay resulted from what appears to have been ineffective casing guns and charges, sourced locally in Israel and initially used to perforate all the zones. We purchased additional casing guns and charges from the United States at the commencement of testing, which fortunately, allowed us to re-perforate all the zones of interest to achieve injectivity and properly stimulate the well.
The primary zones we have been testing are all located at depths greater than 16,000 feet. Every time we had to run in the hole and out of the hole took, on average, four days.
Every time we wanted to isolate a particular zone to test, we had to install an isolation tool called a packer, which contains rubber elements. Due to the very high well temperature, these packers would only last, on average, approximately five days. When they failed, we had to pull the pipe out of the hole and replace the packer, which added, on average, four days.
What are the Future Plans?
We have gained a tremendous amount of geological knowledge, but there are still a lot of unresolved questions that need further evaluation:
If answers to the foregoing questions above are positive, and we raise the needed financial resources, we plan to acquire additional focused seismic data to help guide potential field development and continue with Zion's vision to help make Israel energy independent.
Management, along with all of our staff, want to sincerely thank you for your continued support. This mission has been one of the most difficult challenges we have undertaken, and we are not done yet. We also recognize that we are completely shareholder funded and as a result, this is your company. There is so much left to do, and it is an honor to represent our shareholders in this mission.
There will be more updates to come as we know there are many more questions regarding the administration and regulatory issues facing Zion that many of you have.
"But everything exposed by the light becomes visible and everything that is illuminated becomes a light"
Ephesians 5:13
"….The LORD has broken through my enemies before me, like a breakthrough of water"
2 Samuel 5:20
FORWARD-LOOKING STATEMENTS: Statements in this communication that are not historical fact, including statements regarding Zion's planned operations, anticipated attributes of geological strata being drilled or tested, the presence or recoverability of hydrocarbons, operational risks in testing and well completion, timing and potential results thereof and plans contingent thereon are forward-looking statements as defined in the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that are subject to significant known and unknown risks, uncertainties and other unpredictable factors, many of which are described in Zion's periodic reports filed with the SEC and are beyond Zion's control. These risks could cause Zion's actual performance to differ materially from the results predicted by these forward-looking statements. Zion can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.
Contact Info:
Zion Oil & Gas, Inc. (NASDAQ: ZN)
12655 North Central Expressway, Suite 1000, Dallas, TX 75243
Andrew Summey
Telephone: 888-891-9466
Email: andrew.summey@zionoil.com
www.zionoil.com
https://mma.prnewswire.com/media/731868/Zion_Oil_Gas.jpg
https://mma.prnewswire.com/media/731869/Zion_NEFET_Circle_ZN.jpg
https://c212.net/c/img/favicon.png?sn=DA82573&sd=2018-08-16 View original content with multimedia:http://www.prnewswire.com/news-releases/zion-oil--gas-confirms-active-petroleum-system-in-megiddo-jezreel-1-well-in-israel-300698633.html
SOURCE Zion Oil & Gas, Inc.
i noted earlier before having this info that zn's 10k came out Mar 12-the beginning of the period during which the lawsuit claims "Materially False and Misleading Statements'
the Mar 12 10k had the following language and the 10q for period ending mar 31 had the same or similar following language:
"A. Litigation
From time to time, the Company may be subject to routine litigation, claims, or
disputes in the ordinary course of business. The Company defends itself
vigorously in all such matters. In the opinion of management, no pending or
known threatened claims, actions or proceedings against the Company are
expected to have a material adverse effect on its financial position, results of
operations or cash flows. However, the Company cannot predict with certainty
the outcome or effect of any such litigation or investigatory matters or any other
pending litigation or claims. There can be no assurance as to the ultimate outcome
of any such lawsuits and investigations."
so they are saying zn knew or should have known of sec investigation and yet said, "no pending or known threatened claims, actions or proceedings against the Company are
expected to have a material adverse effect on its financial position'
zn had no knowledge of a pending or known investigation-pandas tweets and whatever dont give rise to such knowledge-there are several reasonable paths which could be the outcome of "This exemption protects from disclosure records compiled for law enforcement activities'
1)could mean statistical purposes for various reasons such as sec rulemaking
2)a tighter circle re a class of companies
3)a tighter circle re zn or companies zn does business with etc
legally the fuzzy info on the tweets does not give rise to notice of an sec investigation-only an official notice from sec or a court could do that and there was no such notice til june 21,which notice zn duly filed/posted within the prescribed 20 day or more time period to respond
the court would have to change legal rules or statutes to impose liability
thats why the ambulance chasers are asking for a jury trial-so the average member of society who has no knowledge re these things may be influenced by plaintiffs histrionic court tactics-
Materially False and Misleading Statements Issued During the Class Period
19. The Class Period begins on March 12, 2018, when Zion filed an annual report on
Form 10-K with the SEC, announcing the Company’s financial and operating results for the
quarter and year ended December 31, 2018 (the “2018 10-K”). The 2018 10-K advised investors
that “Zion’s vision . . . of finding oil and/or natural gas in Israel, is biblically inspired”, citing
“biblical references alluding to the presence of oil and/or gas in territories within the State of
Israel that were formerly within certain ancient biblical tribal areas.”
20. In the 2018 10-K, under the heading “Note 10 – Commitments and
Contingencies”, Zion provided merely the following non-specific representation with respect to
the probability and/or impact of regulatory investigations involving the Company:
A. Litigation
From time to time, the Company may be subject to routine litigation, claims, or
disputes in the ordinary course of business. The Company defends itself
vigorously in all such matters. In the opinion of management, no pending or
known threatened claims, actions or proceedings against the Company are
expected to have a material adverse effect on its financial position, results of
operations or cash flows. However, the Company cannot predict with certainty
the outcome or effect of any such litigation or investigatory matters or any other
pending litigation or claims. There can be no assurance as to the ultimate outcome
of any such lawsuits and investigations.
the info in no 3 does not put zn on notice of an sec investigation
"This exemption protects from disclosure records compiled for law
enforcement activities."
so what -that could mean a number of things -its not the same as saying zn is under investigation-and even if it had said that zn is not legally notified of an investigation until they receive an official notice from the sec-which was not received til june 21
then legally under court rules and statutes zn had at least 20 days to respond-and zn did respond publicly by filing the 8k july 11 re the sec non-public fact finding investigation
"From this, the Twitter user FuzzyPandaShort concluded that “Zion has
an Undisclosed SEC Investigation.”
so what -neither pandas nor mine nor yours nor santa claus's interpretations are law
and panda also falsely presumed zn knew of an investigation
23. The Twitter post highlighted language from the SEC stating that “[w]e are
withholding records that may be responsive to your request under 5 U.S.C. § 552(b)(7)(A), 17
CFR § 200.80(b)(7)(i). This exemption protects from disclosure records compiled for law
enforcement activities.” From this, the Twitter user FuzzyPandaShort concluded that “Zion has
an Undisclosed SEC Investigation.”
24. On March 27, 2018, Zion posted a statement on Twitter in response to
FuzzyPandaShort’s post, unequivocally stating that “There is no SEC investigation. Merely
indicators of a routine FINRA questionnaire that’s standard after a steep rise of our stock
recently.” (See Fig. 2.)
(Emphasis added.)
i have 2 long posts on this a few days ago-cant find right now
zn had at least 20 days to respond to sec and no doubt they did plus they posted the 8k re sec 20 days after receiving notice of sec
suit claims zn knew of investigation before notifying shareholders and thus shareholders lost money- look for my long post days ago-took me too much time looking for it twice
and that zn made misleading statements- a PR RE COMMERCIAL FIND will take care of supposed 'misleading' statements
and zn is allowed by law 20 days to respond-as they did in 20 days -so suit seems to be grasping at straws trying to create a new right for holders or retroactively remove the 20 day system wide time to respond
suit builds upon straws
Seerys specialty is exactly what ZN needs to build infrastructure for a commercial find-not needed for a non commercial find-so i find it very interesting his appointment was announced just days before an expected PR re a commercial find
Zion Oil & Gas, Inc. (“Zion” or “Company”) has appointed John T. Seery to its Board of Directors (“Board”) as an independent director, effective September 1, 2018.
Mr. Seery has over forty years’ experience in the project management and design of oil and gas facilities. Projects have included refining, gas processing, compressor stations, terminals, production and construction facilities. His scope has ranged from feasibility and conceptual design and studies, including cost estimating, detail design, procurement, startup and project and construction management.
about 5 separate reports from ir re expectation of PR this week as forecast by July 31 PR
doesnt matter where jb is- his responsibilities are not critical to operations at the well site
Moses said this at least twice:
''Also was informed that in Israel they cannot do well testing at night per Israel regulations. Who knew right but can partially explain part of the wait times.''
re justin at least 3 possibilities
resigned to make way for new director-the new director is specialized in the kind of build out zn will need w commercial find
justin is litigation attorney - may be helping w shareholder lawsuit and wanted to concentrate on that for zn
with shareholder suit he may have perceived a conflict of interest due to other clients as he wears several hats outside zn
Thats a lot of info for a 1st PR
RE question 7- days ago i heard 'production goal' but didnt understand bc i thought such would be premature
can a lateral or horizontal line be drilled at a point before the pipe narrows from 7"
will financing be via (bridge) loan or equity or both
maybe this is your no 5 but what arrangements are made to transport oil to haifa absent a pipeline-understanding security may limit a response
i appreciate your faith and patience as one of the early investors who has been tried in the fire
and completely understand how waiting gets old eventually-every stock i've ever looked at has experienced delays just as we do in our own lives
recent pronouncements have been modified by 'barring unforeseen delays' or similar language
if no PR by fri then hopefully only a minor delay but will u forgive them if it is a gargantuan field, as u've been told.
I've seen pics of drilling rigs which have 8 legs and are called octopus or octopi and can move themselves by raising 4 legs at a time and extending such
i'm afraid i missed whatever joke is referenced by der kracken,unless it means giant slayer,as in one who has a much higher view of the battlefield,which will soon become clear
or the british, crackers man
i did look at many google pics of israel near the site but the resolution for security reasons made it impossible to even see the rig or site except as a blur
re the mythological creature tisdal i didnt realize that but i understand-running low on posts
see below how close west bank mtns are from N of the kibbutz - zn rig is S of kibbutz-closer to said mtns- and see the many foothills settlements-which told me much more distant mtns in another pic were jordanian,w the river intervening but of course unseen
my mind wants to think there's more lead time between end of testing and PR
but
1) tisdal said a supplier has software that provides a template
2)i believe the 1st 2 stages of testing were done in previous months-see kyoils post yesterday
3)hopefully zn is watching these games and realizes a PR sooner is better than later
so that could be and aligns with what i've seemed to hear in the spirit,which often does not make sense in the natural
when pps was running away at 4.20 plus i heard dont chase-do nothing
when i was going to buy at 2.60, wait a little while,
and i now see the wisdom of those things
july 26- the punishment of the wealth of the wic...-not necessarily related to or limited to zn-part of a much broader situation that is overdue
but today seemed to be buy today -so i bought twice today at these fire sale prices
saturday is sabbath which zn has honored to meet the local culture
sunday is 1st day of next week
to make it simple 10q's are more official than 10k's i've been told,so the notation in the 10q made it unnecessary to file an 8k re the guy who left
Arent the new directors qualifications interesting and the timing is just right to build infrastructure -what perfect timing!!
Mr. Seery has over forty years’ experience in the project management and design of oil and gas facilities. Projects have included refining, gas processing, compressor stations, terminals, production and construction facilities. His scope has ranged from feasibility and conceptual design and studies, including cost estimating, detail design, procurement, startup and project and construction management.
Mr. Seery was employed by Mustang Engineering from 1998 until his current retirement as a Project Engineer for projects in Kansas, Texas, Scotland, Lithuania and Equatorial Guinea for clients such as ExxonMobil. He was employed by Basic Systems, Inc. as a Project Manager for projects in the Ukraine and Uzbekistan from 1993 to 1998. He was employed as a Project Manager by Armelline Engineering from 1990 to 1992 for projects in Oklahoma and California for clients such as Arco Oil & Gas and Mobil. He was employed by Nova Engineering from 1984 to 1990, Aztec Construction from 1981 to 1983, Edeco from 1973 to 1981 and Sun Oil Refinery from 1969 to 1973. Mr. Seery earned a B.S. in Mechanical Engineering at New Mexico State University and is a licensed Professional Engineer. He also completed management courses at Findlay College.
this is standard and typical boilerplate. Many companies which dont have net income are included as are almost all if not all companies w negative working capital(no cash on hand -just debts)
that doesnt apply to zn, which has 7.5m cash equivalents as of the 10q date
but zn doesnt have revenue as of 6-30 10q date.
sec supplies a rigorous template with much of this boiler plate language-it is meant to expose every possible risk under the sun for the 'protection' of investors- and it is a very conservative legal doc
this language is thus boilerplate for thousands of companies and is the night of what has been(no revenue) while PR's are the day of the future
sounds like there have been at least 5 confirmations by ir re the PR announcement we have been looking for as coming this week as forecast by the last PR July 31:
Operational Update regarding the testing of the Megiddo Jezreel #1 Well – July 31, 2018
July 31, 2018 Zion Oil & Gas, Inc. 2 Comments Blogs, Exploration Updates, News, Updates
Operational Update regarding the testing of the Megiddo Jezreel #1 Well
Zion Shareholders and Supporters,
Zion continues its well testing operations on its primary targets within the Triassic formations of the Megiddo-Jezreel #1. I realize that the testing of these zones has taken longer than expected and as communicated at the 2018 Annual Shareholders Meeting, as a result of both mechanical and logistical delays. Zion expects, pending any further unforeseen delays, to complete testing on these zones on or about the week of August 13th. If testing is completed by this date, we expect be able to announce the initial findings of the primary targets soon thereafter. If any material delays or changes to this plan occur, we will communicate accordingly.
We want to thank all of you for your patience, continued prayer and support. We know how invested each of you are in this project, and thank you for standing alongside of us throughout this journey.
Regards,
Dustin Guinn
President & COO
Zion Oil & Gas, Inc.
shares are ridiculously cheap- pps before Feb 13 PR re oil in the drilling mud was 2.25 and reached a high of 4.47 that very day-big boys know that
whats more important- oil in the drilling mud or PR re a commercial find???
how much more important is commercial find than oil in the mud- 50x,100x 500x,1000x?
there was no testing when announced oil in mud -were just circulating drilling mud
big boys dont want to pay for all their shares after PR comes out -want some more cheap shares now
stops being pulled today may indicate they know PR is imminent
big boys are buying-they know the game
mm's are triggering stop losses to get shares for their large clients,whom moses called drinkng buddies
all bc they sense time is running out to get cheap shares
dont respond to the baiting-just adds fuel to the fire-there are no criminal charges against anybody-civil investigation and civil suits -suits will be consolidated
8k july 11 said this:
On Thursday, June 21, 2018, Zion Oil & Gas, Inc. (“Zion” or “Company”) received a subpoena to produce documents from the Fort Worth office of the Securities and Exchange Commission ("SEC"), informing Zion of the existence of a non-public, fact-finding inquiry into the Company. Zion, an SEC-reporting company with audited financial statements in the US and Israel for over a decade, will fully cooperate with this investigation. Until receipt of the subpoena on June 21, 2018, Zion had no previous communication with the SEC on this issue and was unaware of this investigation. The SEC stated that "the investigation and the subpoena do not mean that we have concluded that [Zion] or anyone else has violated the law."
While we acknowledge that our response to the subpoena will necessarily entail significant costs and management's attention, it should have no effect on Zion's ongoing testing procedures on its Megiddo-Jezreel #1 well. The Company does not intend to comment further on this matter unless in the Company’s judgment, it merits further comment or public disclosure.
all the stops are being pulled out -including mm's triggering stop losses-bc we might seethe PR this week -and if not then probably next week-remember parsons posts-"just a few days" and ir post re this week and tisdal maybe monday
over 5M shares by the top 2 big boys alone
i see the big boys dont seem concerned about all the game play,and they could also be a part of some of the game play-cant say more
what matters is whats in the ground
John Brown is sure a powerful man to control all those big boys on your list
First mention of oil(in the drilling mud)was Feb 13 PR- pps jumps from ca 2.30-4.47 in a day
shorters dont like that-a wildcatter in israel would normally be a safe bet
so they determine to get their old friend sec involved and file complaints,as a post posting a message from ir said
and ask for foia request-
panda is delighted to find their may be an investigation-(which likely may have to do with the announcement of oil and fundraising pursuant to such announcement)
doesnt necessarily mean there is an investigation against zn-
could be against an individual or another company with which zn does business -
may 15 letter from sec to panda doesnt say -
so even if zn knew of such letter that would not give knowledge of sec investigation-you dont know til sec informs you
jryans post where panda learns his fioa request is denied ca May 15
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=142139932
i guess nobody has found the rest of the letter panda purposefully doesnt provide
zn receives notice of investigation june 21
a very basic function of the law is to provide at least 20 days to respond to a suit or investigation
zn did respond to sec no doubt within 20 days and posted an 8k re the investigation within 20 days.
how zn could be held responsible for posting within the allowed 20 days is beyond me
the wording of such a filing would have to be composed and ratified by counsel and perhaps by b/d
is such counsel an outside counsel-usually is- and in dealing w sec almost always is because it takes time to find a very specialized attorney approved by the sec to practice before the sec-very few attorneys are so approved
-stocks are a very specialized subject matter-i learned absolutely nothing helpful re stocks in my accounting eco and law degrees
though acct is very useful for financial statements and ratios of course
and sec is a specialized subset of a specialized subset
thanks for being our eyes on the ground -so this could be the 4th day of zone 2 testing
i think they've done 1st 2 levels of testing mentioned by kyoil and are doing the flow testing -will have to read ky's posts again
flow testing takes a week or...
cant be too long if he said a few days-but kyoil and tisdal- how long does it take to report after finishing testing-assuming zn does not need israel approval bc zn has said they are not concerned about geopolitical
cant find my most post re this -yes - judge would consolidate suits
reason for sec is probably statements re oil starting feb 13 ff by rights offering
when they report a commercial find it will justify those statements
even if they knew of panda letter that does not tell them they are under investigation -could be supplier or other relationship or just 1 officer etc-so they dont know til sec notifies them
very basic function in the law allows 20 days to respond and zn did respond and post a filing within 20 days of sec notice
so unless a retroactive precedent-very rare- changes those rules i dont see how zn could be held liable in those suits-
sometimes its just a manipulation to get money in a settlement- some people live their whole lives that way- i've met many of those scammers in the business i helped run and once i showed them my proof they all went away-never paid out 1 cent
they drilled the 1st 68 holes but bob didnt have access to that drill info until after the 1st ship kriton sailed
CEMEX was the concession owner before Bob
i'm assuming a big holder or holders sold the over 100k shares in a market order -which would take out all the bids until sell order was satisfied and then quick rebound-same happened ca 1 week or more ago
maybe they think a competing tech as noted here over a week ago will beat blozf to market
already exceeded avg daily volume
I/ve wondered that myself-though mention is made that such a pipeline could bypass russia to europe,to do so any such pipeline would have to go thru azerbaijan and turkey and turkey under erdogan will not allow israel oil
israel has pipelines and or agreements w jordan and egypt and oil could be shipped from haifa refineries to europe
https://www.bbc.com/news/world-45162282
last time it was accountants about ready to turn info to auditors-now its auditors still working- either the books are a mess w derivatives and convertibles-esp during the 2016 run of amazing news releases or maybe
but my questions are -why so much incredible incredible detail in so many PR's-
such detail has to have a basis in fact-and if newc did not have business dealings w those firms then why didnt they say so?
if u are going to run a scam why be sec reporting in the 1st place????? -it just puts him on their radar- doesnt make sense
why not just be pink current-then this would not be revoked-there are thousands of stocks that arent even pink current -and not even talking about gray stocks
nobody has answered these questions
convertibles and derivatives were a mess-but not the only company w such a toxic financing mess
from the official site-for friday
20180810|ZN|81080|100|120053|Q
81080 short, 120,053 total volume 67.5% short %-slightly higher than the volume bot figures -which is normal when i have compared the figures
does not include non-tape shorts or presumably naked shorts
ZN has spent many millions proving what i believe is a commercial find since announcement of oil in the drilling mud Feb 13
and our resident oil expert kyoil has never seen a situation like this turnout to be dry
but 1 of the opponents main qualities is the latter you spoke of- just following their own noise -having rejected any info out side their closed loop, just as we see here
even blue chips like walmart and google have short ratio above 30% and from their perspective zn is a wildcatter-and in israel to boot,so they have been told there is no oil in israel- each follows his own master-having rejected both of zn's stated purposes
at least they have not denied the rig below is zn's -
the official site re short sales reported to finra- trf nasdaq subsection
http://regsho.finra.org/regsho-Index.html