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eventually ,hopefully sooner than later,in our lifetime, to give meaningful context to the promises and the time we are in.
part of the market value problem is the extremly low share count-i cant think of a stock thats been around this long that i looked at that had such a low share count- a good % of penny stocks have share counts in the many billions. I dont remember such stocks surviving 19 years without revenue-but ZN has,partly due to a legal shareholder base.
72.9 M SHARES is an extremely low share count for a 19 year company
once penny co's [defined as stocks below 5 dollars pps] achieve substantial lasting revenue,since pps often lags real or perceived value at that point,co's often buy back shares with a common goal being to reduce O/S shares to 250M to 500M [from the billions of shares they often have before that point]
ZN doesnt even have 1/3 of the shares of the low range of shares targeted by such companies
once again the purpose of becoming a public company is the ability to raise funds via issuing shares until lasting revenue is achieved-thats just common sense- thats what ALL public companies do until revenue can support operations
a lot of headaches accompany being public such as non stop magnifying glass disclosure
so if insiders are filthy rich they dont take a company public
execs pay is below other comparable co's pay,with zn's execs taking such a pay cut bc they believe in the mission
yes, the 11th hour-when things are proven-look forward to it
https://geology.utah.gov/map-pub/survey-notes/glad-you-asked/what-are-seismic-surveys/
https://www.iongeo.com/Data_Library/BasinSPANs/
BasinSPAN surveys have a long offset and are typically depth imaged to 40 km.
those are surveys over a large area
in reading various 3d articles,there seems to be some correlation between the surface area of the survey and the depth of image which can be produced
this article mentions a 3d survey depth of 5 km in one instance - substrate unknown
ZN drilled to 5060 meters (16,600 feet)
leviathon oil and gas substrate is 5-7 km deep
another article mentioned several thousand meters under the ocean bottom after the air gun or whatever noise source travels through presumably 1000's of vertical feet of ocean water
water is 800 times more dense than air,so that is also encouraging
https://www.sciencedirect.com/topics/earth-and-planetary-sciences/seismic-survey
wow-if zn stock went from ca 2.25 to 5.80 after 'just a tiny trace of oil was found" in the drilling mud[of course found in the completion fluid after the acid stimulation also]
then just imagine how high the stock will jump when they find the whopper!!!!
thats why its a spec stock- was the 5th fastest growing stock last june on the russel index
your basic blue chip, whose price is run by big boys on inside info stealing from retail and each other,only has a small % change in price -and thus much lower profit
thats why even big boys invest in spec stocks to raise there overall profit %, bc when such spec stocks run they can run big and bring huge profits
zn also had a large run starting in may,2017 just before spudding june 5,2017 ,which may be one reason why zn execs voluntarily restricted themselves from selling(and probably buying also, except for stock options, which are commonly a part of exec pay to conserve company cash,and thus hurt their pay severely bc the stock bought via those options -not to mention the stock they were holding due to their voluntary restrictions on selling- dropped in pps just like our stock)
Posted as a public service message
I have largely previously posted dd re these things-refer to my previous posts and other longs posts
if there are more issues to address guys remind me
re the next well:
under the most optimistic of conditions the 3d survey will quickly find a commercial field
and under the most optimistic of conditions somebody may partner w zn via a large cash infusion -just as the meged oil wells co Genie received a 50M cash investment from A-TEV
or receive a buyin from Delek - Delek bought 70% of the license abutting ZN's concession to the west
there are actually more optimistic though less likely conditions
ranging from a modern day jed clampett to earthquakes etc but since ZN has the exclusive rights to its license area the spoils would go to ZN
re drilling plans;
drilling plans will be dictated by the 3d survey surrounding the MJ1 well- and thus the next well can hopefully be drilled from the same drill pad to save time and money
re debt:
ZN pays as it goes - doesnt get into long term debt-only such long term debt is bonds which are convertible into common stock and thus ultimately wouldnt cost zn much more than fees
re russell index and nasdaq:
much of the hullabaloo re the russell index is irrelevant- ZN got by for 18 years without being on such- and russell index investors have had 9 months to get out since pps 1st fell below one dollar ca sept 25-27- zn is a spec investment for them and will remain a spec investment for them- doesnt make sense for them to hold if they plan to get out so those who planned to get out for the most part probably have
most co's like ZN apply for another 180 day extension to bring pps to one dollar by building shareholder value-which extensions are regularly granted if the applicant has any reasonable plans-exchanges dont like to lose the 150k in fees /year
if at the end of the 2nd 180 days jan 8,2020 pps is not going to otherwise be over one dollar zn can r/s to stay on the nasdaq-they've signaled their intention in a filing i posted to transfer to another level of the nasdaq during the 2nd 180 days and have not given any indication they would r/s yet
re informal no wrongdoing asserted investigation:
they/ve never been investigated before and said it was due -though the cause was a complaint by an apparent shorting cartel or entities associated w such who apparently dont politically agree w zn's purposes- sec has not indicated any wrongdoing
zn was ca the 5th fastest growth co on nasdaq last june- and if they discover a commercial reservoir they may again be one of the fastest growing- thats one of the reasons they are a spec co invested in by funds looking for spec investments(bc non spec investments usually have small % returns)
renewable lease
and if they discover a commercial field their license would be converted to a 30 yr lease renewable for another 20 years
delek etc
there is increased activity around zn's license-e.g. delek- which owns 45% of leviathon bought 70% of the license adjacent to zn on the west=
probably figuring the offshore strata may continue under onshore israel- such offshore strata is 5000 to 7000 meters deep- zn's oil shows were near the td bottom at ca 5000 meters w evidence of a petroleum system-
we have no evidence of a delek etc deal but if delek invested in zn's license in some form of deal that would speed things up
re p/b:
price /book of 10 is not unusual for a non-revenue company(and its common for revenue co- a p/b below 3 in a revenue co is a value co, which is relatively rare)
price/book and pps for non-revenue co's depends on potential going forward
in spec co's with no revenue it is not unusual to have price/book ratios of 50-100- fairly common from what i've seen-and i've seen as high as probably 1000- i was often amazed at the p/b ratios of spec co's,as i now remember
re timing of next well:
if a commercial field is found during the survey a new well[possibly from the same pad as the exploratory well(since the 3d survey will surround such well and horizontal drilling can easily extend a few miles now)could be drilled,sooner if delek etc participated.
re assets
zn had close ca 42M assets til write off due to the noncommercial exploratory well-and if such well aids in discovery of a commercial field due to the 3d survey of 60 square km around the well what then?
they have an experienced C level team with the main players having over 30 years experience in oil and gas industry-and apparently are able to acquire necessary expertise for less than the prevailing compensation bc those acquired assets believe in zn's cause and want to be a part of something special as Dustins on-boarding etc letters indicate
and the 3d survey specialist they brought over from viking has 26-28 years of experience/surveys and has supervised as much as 6 wells or surveys and 500 people at a time
re exec pay
the exec compensation committee displayed info showing zn execs were underpaid cf to similar competition and much of their pay is is in stock options to conserve cash-and such options are valued at either the time the option becomes available or is exercised
-so their pay has been much less than some have advertised- those who say zn pps dropped x% should note that the portion of exec pay attributed to stock is much less ,having lost value like everybody else's stock,especially since a filing indicated execs had an agreement to not sell since ca may 17 2017- weeks before the mj1 well was spudded- and execs no doubt restricted themselves to help avoid harmful speculation
and thus execs have not sold stock since may 2017 -except one ex exec who donated stock to nonprofits etc
re ceos'
victor's lawyer/judge experience was valuable in helping pioneer zn's negotiation of the incipient israel onshore oil and gas exploration regs,as his letters indicated
ceo dustin unselfishly resigned so ZN could save money(filing indicated streamlining) as per his resignation letter so his friend Robert Dunn- a 3d specialist from Viking -could be brought in as director of operations -if ZN again needs a drilling specialist we may see dustin again
in a bigger company Dustin could stay on as a part of large co's top heavy management but ZN is running streamlined to put more dollars to the actual geophysical work
when a drilling specialist is again needed,it sounds like dustin would be willing to execute his drilling expertise again
small co's cannot afford to pad management-but zn is attacked no matter what they do
from the 10q, as of March 31, they had over 3.1 M cash and current assets(defined as cash which can be converted to cash within a year) were 3.839M
plus 10q said 504k was raised in April, which exceeds their draw of 500k /month when not actively surveying or drilling-and most of April was not a fundraising period
once fundraising period started pps dropped bc some buyers funds were being diverted via the fundraising program
which tells us funds raised in May should be greater than April - perhaps double or triple or quadruple-maybe more if any road trips
so ZN does NOT have only 1-2M cash!
they would have more cash now than when the 2nd quarter began april 1
so easy to show
current assets
Cash and cash equivalents 2,024 2,791
Fixed short term bank deposits – restricted 1,100 1,325
Prepaid expenses and other 420 461
Other deposits 150 280
Governmental receivables 6 361
Other receivables 139 153
Total current assets 3,839 5,371
Imo. Do your dd before investing. I'm not
exactly
current assets obviously is ASSETS which can be converted to cash within a year-and zn always keeps its current assets above current liabilities --whenever i've watched- and a lot of blue chips cant say that
from the 10q, as of march 31, they had over 3.1 M cash and current assets(defined as cash which can be converted to cash within a year) were 3.839M
plus 10q said 504k was raised in april, which exceeds their draw of 500k /month when not actively surveying or drilling-and most of april was not a fundraising period
once fundraising period started pps dropped bc some buyers funds were being diverted via the fundraising program
which tells us funds raised in May should be greater than april - perhaps double or triple or quadruple-maybe more if any road trips
so zn does NOT have only 1-2M cash!
they would have more cash now than when the 2nd quarter began april 1
so easy to show
current assets
Cash and cash equivalents 2,024 2,791
Fixed short term bank deposits – restricted 1,100 1,325
Prepaid expenses and other 420 461
Other deposits 150 280
Governmental receivables 6 361
Other receivables 139 153
Total current assets 3,839 5,371
wow-if zn stock went from ca 2.25 to 5.80 after 'just a tiny trace of oil was found" in the drilling mud[of course found in the completion fluid after the acid stimulation also]
then just imagine how high the stock will jump when they find the whopper!!!!
thats why its a spec stock- was the 5th fastest growing stock last june on the russel index
your basic blue chip, whose price is run by big boys on inside info stealing from retail and each other,only has a small % change in price -and thus much lower profit
thats why even big boys invest in spec stocks to raise there overall profit %, bc when such spec stocks run they can run big and bring huge profits
zn also had a large run starting in may,2017 just before spudding june 5,2017 ,which may be one reason why zn execs voluntarily restricted themselves from selling(and probably buying also, except for stock options, which are commonly a part of exec pay to conserve company cash,and thus hurt their pay severely bc the stock bought via those options -not to mention the stock they were holding due to their voluntary restrictions on selling- dropped in pps just like our stock)
72.9 M SHARES is an extremely low share count for a 19 year company
once penny co's [defined as stocks below 5 dollars pps] achieve substantial lasting revenue,since pps often lags real or perceived value at that point,co's often buy back shares with a common goal being to reduce O/S shares to 250M to 500M [from the billions of shares they often have before that point]
ZN doesnt even have 1/3 of the shares of the low range of shares targeted by such companies
once again the purpose of becoming a public company is the ability to raise funds via issuing shares until lasting revenue is achieved-thats just common sense- thats what ALL public companies do until revenue can support operations
a lot of headaches accompany being public such as non stop magnifying glass disclosure
so if insiders are filthy rich they dont take a company public
execs pay is below other comparable co's pay,with zn's execs taking such a pay cut bc they believe in the mission
still true
the system is there for the 3d to find. I never did see any estimates of how deep 3d can look- but presumably its based on the kinds of strata encountered
anybody else brave enough to search for how deep 3d can peer?
hmmm- Leviathon gas and some oil 5000-7000 m deep directly west of zn's concession
the new oilfield offshore directly west of haifa which is also directly west of zn's concession
Delek who owns 45% of leviathon and a quarter? of tamar (offshore farther south) buys 70% of the concession abutting zn's concession to the west
ZN's concession is part of the levant basin expected to possess oil and gas
ZN drills to 5060m (16600 feet) but torque limitations prevent them from going any deeper-they had a real battle going as deep as they did- dustin describing miracles which allowed zn to go as deep as they did - but one miracle short of the glory oil discovery?
the palmyra system in syria extending thru zn's concession towards the meged oil field over 4000 m deep
and zn's concession just happens to be at the intersection of some of these things
the filing says
Mr. Guinn’s resignation is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Guinn intends to remain available through May 10, 2019 to assist the Company in the transition process
Mr Guinns resignation letter said
https://www.otcmarkets.com/filing/html?id=13364344&guid=VC4yUnncHeWgK8h#F8K041719EX99-1_ZIONOIL_HTM
April 12, 2019 read it- apparently it cannot be posted
but in part it says:
Part of being a leader, though, is the recognition that the organization which you lead has needs that change through time, and now is such a time, a time of transition. It therefore seems prudent for me to step down so that I can support the Company’s efforts to attract additional talent that will help accomplish the Company’s goals for its next stage of exploration. To that end, I believe Rob Dunn meets that requirement and will be critical to the success of this next phase.
Exhibit 99.2
there is no reason to disbelieve any part of what Mr Guinn said in the letter- he simply wanted to save zn money bc zn probably couldnt at this stage economically justify just adding another coo
and when a drilling specialist is again needed we may see dustin again if he is available
Posted as a public service message
I have largely previously posted dd re these things-refer to my previous posts and other longs posts
if there are more issues to address guys remind me
re the next well:
under the most optimistic of conditions the 3d survey will quickly find a commercial field
and under the most optimistic of conditions somebody may partner w zn via a large cash infusion -just as the meged oil wells co Genie received a 50M cash investment from A-TEV
or receive a buyin from Delek - Delek bought 70% of the license abutting ZN's concession to the west
there are actually more optimistic though less likely conditions
ranging from a modern day jed clampett to earthquakes etc but since ZN has the exclusive rights to its license area the spoils would go to ZN
re drilling plans;
drilling plans will be dictated by the 3d survey surrounding the MJ1 well- and thus the next well can hopefully be drilled from the same drill pad to save time and money
re debt:
ZN pays as it goes - doesnt get into long term debt-only such long term debt is bonds which are convertible into common stock and thus ultimately wouldnt cost zn much more than fees
re russell index and nasdaq:
much of the hullabaloo re the russell index is irrelevant- ZN got by for 18 years without being on such- and russell index investors have had 9 months to get out since pps 1st fell below one dollar ca sept 25-27- zn is a spec investment for them and will remain a spec investment for them- doesnt make sense for them to hold if they plan to get out so those who planned to get out for the most part probably have
most co's like ZN apply for another 180 day extension to bring pps to one dollar by building shareholder value-which extensions are regularly granted if the applicant has any reasonable plans-exchanges dont like to lose the 150k in fees /year
if at the end of the 2nd 180 days jan 8,2020 pps is not going to otherwise be over one dollar zn can r/s to stay on the nasdaq-they've signaled their intention in a filing i posted to transfer to another level of the nasdaq during the 2nd 180 days and have not given any indication they would r/s yet
re informal no wrongdoing asserted investigation:
they/ve never been investigated before and said it was due -though the cause was a complaint by an apparent shorting cartel or entities associated w such who apparently dont politically agree w zn's purposes- sec has not indicated any wrongdoing
zn was ca the 5th fastest growth co on nasdaq last june- and if they discover a commercial reservoir they may again be one of the fastest growing- thats one of the reasons they are a spec co invested in by funds looking for spec investments(bc non spec investments usually have small % returns)
renewable lease
and if they discover a commercial field their license would be converted to a 30 yr lease renewable for another 20 years
delek etc
there is increased activity around zn's license-e.g. delek- which owns 45% of leviathon bought 70% of the license adjacent to zn on the west=
probably figuring the offshore strata may continue under onshore israel- such offshore strata is 5000 to 7000 meters deep- zn's oil shows were near the td bottom at ca 5000 meters w evidence of a petroleum system-
we have no evidence of a delek etc deal but if delek invested in zn's license in some form of deal that would speed things up
re p/b:
price /book of 10 is not unusual for a non-revenue company(and its common for revenue co- a p/b below 3 in a revenue co is a value co, which is relatively rare)
price/book and pps for non-revenue co's depends on potential going forward
in spec co's with no revenue it is not unusual to have price/book ratios of 50-100- fairly common from what i've seen-and i've seen as high as probably 1000- i was often amazed at the p/b ratios of spec co's,as i now remember
re timing of next well:
if a commercial field is found during the survey a new well[possibly from the same pad as the exploratory well(since the 3d survey will surround such well and horizontal drilling can easily extend a few miles now)could be drilled,sooner if delek etc participated.
re assets
zn had close ca 42M assets til write off due to the noncommercial exploratory well-and if such well aids in discovery of a commercial field due to the 3d survey of 60 square km around the well what then?
they have an experienced C level team with the main players having over 30 years experience in oil and gas industry-and apparently are able to acquire necessary expertise for less than the prevailing compensation bc those acquired assets believe in zn's cause and want to be a part of something special as Dustins on-boarding etc letters indicate
and the 3d survey specialist they brought over from viking has 26-28 years of experience/surveys and has supervised as much as 6 wells or surveys and 500 people at a time
re exec pay
the exec compensation committee displayed info showing zn execs were underpaid cf to similar competition and much of their pay is is in stock options to conserve cash-and such options are valued at either the time the option becomes available or is exercised
-so their pay has been much less than some have advertised- those who say zn pps dropped x% should note that the portion of exec pay attributed to stock is much less ,having lost value like everybody else's stock,especially since a filing indicated execs had an agreement to not sell since ca may 17 2017- weeks before the mj1 well was spudded- and execs no doubt restricted themselves to help avoid harmful speculation
and thus execs have not sold stock since may 2017 -except one ex exec who donated stock to nonprofits etc
re ceos'
victor's lawyer/judge experience was valuable in helping pioneer zn's negotiation of the incipient israel onshore oil and gas exploration regs,as his letters indicated
ceo dustin unselfishly resigned so ZN could save money(filing indicated streamlining) as per his resignation letter so his friend Robert Dunn- a 3d specialist from Viking -could be brought in as director of operations -if ZN again needs a drilling specialist we may see dustin again
in a bigger company Dustin could stay on as a part of large co's top heavy management but ZN is running streamlined to put more dollars to the actual geophysical work
when a drilling specialist is again needed,it sounds like dustin would be willing to execute his drilling expertise again
small co's cannot afford to pad management-but zn is attacked no matter what they do
72.9 M SHARES is an extremely low share count for a 19 year company
once penny co's [defined as stocks below 5 dollars pps] achieve substantial lasting revenue,since pps often lags real or percieved value at that point,co's often buy back shares with a common goal being to reduce O/S shares to 250M to 500M [from the billions of shares they often have before that point]
ZN doesnt even have 1/3 of the shares of the low range of shares targeted by such co's
once again the purpose of becoming a public co is the ability to raise funds via issuing shares until lasting revenue is achieved-thats just common sense
a lot of headaches accompany being public such as non stop magnifying glass disclosure
so if insiders are filthy rich they dont take a co public
this or something like this,from p.40 of the 10q, has been posted in every 10q and 10k since zn learned of the inquiry
it is an inquiry and investigation- no charges have been filed-it is not a court case-thats what zn means by non public fact finding inquiry
no allegations have been made by the sec
just bc somebody is subpoened does not mean guilty-in a democracy as opposed to a dictatorship
from the 10q:
" As previously disclosed by the Company, on June 21, 2018, Zion received a subpoena to produce documents from the Fort Worth office of the SEC informing the Company of the existence of a non-public, fact-finding inquiry into the Company. Prior to the 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.” To date, Zion has furnished all required documents to the SEC and will continue to fully cooperate with the investigation.
The Company cannot predict when this matter will be resolved or what further action, if any, the SEC may take in connection with it.
re the NT filing,that can be resolved like many things via commonsense,a dying methodology
10Q's are not due for 45 days after quarter ends,10K's 90 days after year ends.
By filing a NT form you can extend time to file for 10Q's by 5 days and 15 days for 10K's.
out of an abundance of caution-not certain they can resolve/determine subsequent amounts within the required 45 days -i.e. by May 15(45 days after end of qtr is May 15-not May 10)
they file the NT on May 14- but unexpectedly finish all the accounting re subsequent events the same day(accounting is almost always the hold up for companies)-and thus file the same day. Unusual -yes -but nothing wrong w it.
btw, I would say, based on my observations of thousands of penny stocks,that a majority of such stocks i've looked at have filed form NT's and many of those stocks dont file even within the prescribed intended extra time allotted
the good news is the NT wasnt even necessary and ZN filed within the original alloted time frame-
this wouldnt even be a story anywhere else
zn has 11.9M in assets on the bal sheet- they wrote off 30.9M-and I've asked what happens when the 3d survey find a commercial field with aid of that 30.9M!
30.9 PLUS 11.9 is 42.8M -
In the last 10Q before write off of the 30.9M, on p.1, ZN lists 42,719,000 in assets on the balance sheet!!!! Thats over 42
Million!!
the 3d survey never was 6-12 months just for the survey but for the whole entire process-part of that process has been completed
ZN likely didnt realize how long a process it would be to contract w all the landowners re any possible damages,as to my memory zn has never done that before-certainly not w a 3d-and apparently its only a 3d survey that requires vibration trucks
everything else in the email was a rehash of publicly disclosed info re the current dspp program.
The 3d survey itself has been lavishly publicly disclosed many times!!
at the very bottom of the ibox is the following:
"Options: Sign up for 'Zion Oil & Gas' E-Mail List"
-such signup is not limited to any particular group-
that signup is available to all-
such sign up is a feature provided by the hub!!!
Are u saying the hub is in violation of FD by offering such a feature???!!!
many if not all boards of a functioning company have the same option for email signup
and its even used by otc "no info" companies,who have no disclosures whatsoever!!!!!
A company under an informal non public inquiry which is not charged with any wrongdoing does not lose its protections under the FD act.
FROM faqs-regulation-fd.pdf
"Reg FD specifically excludes certain communications from the scope of the regs."[including]"Communications in connection with an offering of securities registered under the Securities Act of 1933[as is ZN's offering]
"Except in certain limited circmstances Reg FD DOES NOT APPLY TO COMPANY COMMUNICATIONS AND DISCLOSURES MADE IN CONNECTION with an offering of securities registered under the Securities Act".
still true
zn still has a better current ratio than many blue chips including walmart
zn, as always, when i've looked, has a positive -above 1- current ratio -with 3.839M current assets[convertible to cash within a year]
plus they have over 1.1M restricted cash in bank accounts
and current liabilities of 3.18M- of which 723M is a contingent liability which may turn out to be nil.
total assets of 11.9M almost twice as large as total liabilities of 6.4M
and zn is now in a current fundraise period of which we were not notified til Apr 24, so most of April was NOT a fundraising period,AND YET RAISED,as per P26 OF 10Q
Note 9 - Subsequent Events
(i) Approximately $504,000 was collected through the Company’s DSPP program during the period April 1 through 30, 2019.
still true
stock options are a normal tried and true method to partially pay execs and employees
and is a method for the company to reserve/save on cash outlays
re 3d delay: better do your math buddy-its all clear in black and white
originally the survey was to commence Aug 1,2019
now the survey is set to commence April 1, 2020
that is an eight month delay-and where did i ever say the survey began last nov- thats really reaching
btw,for those who have never been in another stock before or never researched other stocks - delays are the name of the game-delays have been experienced by probably EVERY stock i've ever researched
blue chips can avoid some delays via bribes and the usual ways of doing business but they also experience delays often
i have absolutely no experience w those surveys so i dont know the actual on the ground practicalities;e.g., does the survey have to proceed adjacent property by adjacent property? etc
if the answer is no, i would scramble to negotiate w landowners and get the truck(s)rolling on each property as soon as the negotiations for each property are done
has zn has acquired the necessary permits from the ILA?
as i've said, negotiations are never easy, bc everybody has visions of sugar plumbs dancing in their head
israel has the right, similar to or the same as the right of eminent domain, so once zn gets permits from the israel land authority(ILA) the surface owners have to cooperate- thats a given-
if owners are obstinate an appraiser etc can be called on to confer the proper value for any damages after the fact
from p.32 and 33 of the 5-14-19 10k
Number Activity description Execution by:
1 Submission of seismic survey plan to the Commissioner and execution of an agreement with a contractor to perform 30 April 2019
2 Commence 3D seismic survey in an area of approximately 50 square kilometers 1 August 2019
3 Transfer of field material configuration and processed material to the Ministry pursuant to Ministry guidelines 15 December 2019
4 Submit interpretation report 20 February 2020
On February 24, 2019 Zion submitted a request to the Commissioner to extend the Megiddo-Jezreel License No. 401 up to December 2, 2020.
On February 28, 2019 the Commissioner approved the extension of the Megiddo-Jezreel License No. 401 up to December 2, 2020.
On April 30, 2019 Zion submitted its Application for Extension of Continued Work Program Due Date on the Megiddo-Jezreel License No. 401 . The additional time is necessary because Zion intends to conduct a 3D survey in an area of approximately 60 square kilometers. This requires, amongst others, extensive permitting activities with relevant local landowners, the ILA, certain authorities and others throughout the seismic survey area and in all likelihood will not conclude prior to the beginning of the Jewish holidays in October and rainy season. This in turn would result in additional delay, as rain and mud are not conductive to the performance of a seismic survey which includes extensive use of vibrators.
32
Zion’s proposed new timelines and activity descriptions are shown below:
Number Activity description Execution by:
1 Submission of seismic survey plan to the Commissioner and execution of an agreement with a contractor to perform 30 November, 2019
2 Commence 3D seismic survey in an area of approximately 60 square kilometers 1 April, 2020
3 Transfer of field material configuration and processed material to the Ministry pursuant to Ministry guidelines 15 August 2020
4 Submit interpretation report 15 November, 2020
why would i have to show zn meets nasdaq listing standards-they wont have to meet til jan 8,2020-thats over 7 months away
why would i have to show zn doesnt need cash when zn is in the middle of a fundraise and now has more time to do multiple raises if necessary. And more road trips as necessary.
If Dick Cheney wasn't on the board or otherwise involved with another oil co interested in israel I'd also hire him to do some grouse or quail hunting,with the proviso he doesn't waste his bullets on the poor furry animals.
if at the end of the 2nd 180 days jan 8,2020 pps is not going to otherwise be over one dollar zn can r/s to stay on the nasdaq-they've signaled their intention in a filing i posted to transfer to another level of the nasdaq during the 2nd 180 days and have not given any indication they would r/s yet(and it would not be wise to willy nilly r/s bc the nasdaq generously charges 15k to do so)
as i said the nasdaq regularly grants apps for an additional 180 day period to comply if the company has a reasoanble plan to do so -as zn does,with the provision that at the end of the 2nd 180 day period the co would be required to r/s if pps otherwise was not to meet the one dollar bid requirement on jan 8,2020
the nyse must be even more lenient bc there's another houston based oil co i've followed which has averaged ca 25c pps the last yr and hasnt been one dollar pps for over 5 years!!!
so the nyse is also another longterm alternative to the nasdaq if thats what it takes-as opposed to the otcqx- but some won't tell you that
but that focus is all essentially negative -which is why it is repeatedly emphasized as opposed to the efforts to raise shareholder value via oil and gas discoveries- the positive and what will determine real pps is what kind of discovery zn makes via the 3d survey-something utterly ignored by some
and the fact that israel approved the time extension for the 3d confirms something i saw in a previous filing-which indicated a 3d commercial discovery would be sufficient to convert their license into a 30 yr lease renewable for 20 years!!!!!
then the fun begins*.
as zn said in its 1-14-19 filing:
If the Company does not regain compliance by July 8, 2019, the Company may transfer from the Nasdaq Global Market to the Nasdaq Capital Market and may be eligible for an additional compliance period of 180 calendar days. To qualify for the additional compliance period, the Company would have to meet the continued listing requirement for market value of publicly held shares and all other requirements for initial listing on the Nasdaq Capital Market (except for the bid price requirement), and provide written notice to Nasdaq of its intention to cure the bid price deficiency during the additional 180-day compliance period, by effecting a reverse stock split, if necessary."
I dont see any requirement for zn to pay cash for the senior unsecured notes
zn has an OPTION to pay cash to redeem the notes early if they want to.
otherwise zn can pay the principal and interest via common stock,as i said costing zn only fees and costs
from the 10q, p.21
During the three months ended March 31, 2019, the Company recorded approximately $6,000 in amortization expense related to the deferred financing costs, approximately $93,000 in debt discount amortization, and approximately $1,000 related to financing costs associated with notes converted to shares. The Notes are governed by the terms of the Indenture. The Notes are senior unsecured obligations of the Company and bear interest at a rate of 10% per year, payable annually in arrears on May 2 of each year, commencing May 2, 2017. The Notes will mature on May 2, 2021, unless earlier redeemed by the Company or converted by the holder.
Interest and principal may be paid, at the Company’s option, in cash or in shares of the Company’s Common Stock.
The number of shares for the payment of interest in shares of Common Stock, in lieu of the cash amount, will be based on the average of the closing prices of the Company’s Common Stock as reported by Bloomberg L.P. for the 30 trading days preceding the record date for the payment of interest; such record date has been designated and will always be the 10th business day prior to the interest payment date on May 2 of each year.
The number of shares for the payment of principal, in lieu of the cash amount, shall be based upon the average of the closing price of the Company’s Common Stock as reported by Bloomberg L.P. for the 30 trading days preceding the principal repayment date; such record date has been designated as the trading day immediately prior to the 30-day period preceding the maturity date of May 2, 2021. Fractional shares were not issued, and the final number of shares were rounded up to the next whole share.
On May 2, 2019, the Company paid its annual 10% interest to its bondholders of record on April 18, 2019. The interest was paid-in-kind (“PIK”) in the form of Common Stock. An average of the Company stock price of $0.774 was determined based on the 30 trading days prior to the record date of April 18, 2019. This figure was used to divide into 10% of the par value of the bonds held by the holders. The Company issued 422,248 shares to the accounts of its bondholders.
At any time prior to the close of business on the business day immediately preceding April 2, 2021, holders may convert their notes into Common Stock at the conversion rate of 44 shares per $100 bond (which is equivalent to a conversion rate of approximately $2.27 per share). The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends.
Beginning May 3, 2018, the Company was entitled[an option] to redeem for cash the outstanding Notes at an amount equal to the principal and accrued and unpaid interest, plus a 10% premium. No “sinking fund” is provided for the Notes due May 2021, which means that the Company is not required to periodically redeem or retire the Notes due May 2021.
Posted as a public service message
I have largely previously posted dd re these things-refer to my previous posts and other longs posts
if there are more issues to address guys remind me
re the next well:
under the most optimistic of conditions the 3d survey-which has now been extended to a design of 72 sq km- will quickly find a commercial field
and under the most optimistic of conditions somebody may partner w zn via a large cash infusion -just as the meged oil wells co Genie received a 50M cash investment from A-TEV
or receive a buyin from Delek - Delek bought 70% of the license abutting ZN's concession to the west
there are actually more optimistic though less likely conditions
ranging from a modern day jed clampett to earthquakes etc but since ZN has the exclusive rights to its license area the spoils would go to ZN
re drilling plans;
drilling plans will be dictated by the 3d survey of 72 sq km surrounding the MJ1 well- and thus the next well can hopefully be drilled from the same drill pad to save time and money
re debt:
ZN pays as it goes - doesnt get into long term debt-only such long term debt is bonds which are convertible into common stock and thus ultimately wouldnt cost zn much more than fees
re russell index and nasdaq:
much of the hullabaloo re the russell index is irrelevant- ZN got by for 18 years without being on such- and russell index investors have had 9 months to get out since pps 1st fell below one dollar ca sept 25-27- zn is a spec investment for them and will remain a spec investment for them-doesnt make sense for them to hold if they plan to get out so those who planned to get out for the most part probably have
most co's like ZN apply for another 180 day extension to bring pps to one dollar by building shareholder value-which extensions are regularly granted if the applicant has any reasonable plans-exchanges dont like to lose the 150k in fees /year
if at the end of the 2nd 180 days jan 8,2020 pps is not going to otherwise be over one dollar zn can r/s to stay on the nasdaq-they've signaled their intention in a filing i posted to transfer to another level of the nasdaq during the 2nd 180 days and have not given any indication they would r/s yet
re informal no wrongdoing asserted investigation:
they/ve never been investigated before and said it was due -though the cause was a complaint by an apparent shorting cartel or entities associated w such who apparently dont politically agree w zn's purposes- sec has not indicated any wrongdoing
zn was ca the 5th fastest growth co on nasdaq last june- and if they discover a commercial reservoir they may again be one of the fastest growing- thats one of the reasons they are a spec co invested in by funds looking for spec investments(bc non spec investments usually have small % returns)
renewable lease
and if they discover a commercial field their license would be converted to a 30 yr lease renewable for another 20 years
delek etc
there is increased activity around zn's license-e.g. delek- which owns 45% of leviathon bought 70% of the license adjacent to zn on the west=
probably figuring the offshore strata may continue under onshore israel- such offshore strata is 5000 to 7000 meters deep- zn's oil shows were near the td bottom at ca 5000 meters w evidence of a petroleum system-
we have no evidence of a delek etc deal but if delek invested in zn's license in some form of deal that would speed things up
re p/b:
price /book of 10 is not unusual for a non-revenue company(and its common for revenue co- a p/b below 3 in a revenue co is a value co, which is relatively rare)
price/book and pps for non-revenue co's depends on potential going forward
in spec co's with no revenue it is not unusual to have price/book ratios of 50-100- fairly common from what i've seen-and i've seen as high as probably 1000- i was often amazed at the p/b ratios of spec co's,as i now remember
re timing of next well:
if a commercial field is found during the survey this year a new well[possibly from the same pad as the exploratory well(since the 3d survey will surround such well and horizontal drilling can easily extend a few miles now)could be drilled next year,if not sooner if delek etc participated.
re assets
zn had close to 40m assets til write off due to the noncommercial exploratory well-and if such well aids in discovery of a commercial field due to the 3d survey of 60 square km around the well what then?
they have an experienced C level team with the main players having over 30 years experience in oil and gas industry-and apparently are able to acquire necessary expertise for less than the prevailing compensation bc those acquired assets believe in zn's cause and want to be a part of something special as dustins onboarding etc letters indicate
and the 3d survey specialist they brought over from viking has 26-28 years of experience/surveys and has supervised as much as 6 wells or surveys and 500 people at a time
re exec pay
the exec compensation committee displayed info showing zn execs were underpaid cf to similar competition and much of their pay is is in stock options to conserve cash-and such options are valued at either the time the option becomes available or is exercised
-so their pay has been much less than some have advertised- those who say zn pps dropped x% should note that the portion of exec pay attributed to stock is much less ,having lost value like everybody else's stock,especially since a filing indicated execs had an agreement to not sell since ca may 17 2017- weeks before the mj1 well was spudded- and execs no doubt restricted themselves to help avoid harmful speculation
and thus execs have not sold stock since may 2017 -except one ex exec who donated stock to nonprofits etc
re ceos'
victor's lawyer/judge experience was valuable in helping pioneer zn's negotiation of the incipient israel onshore oil and gas exploration regs,as his letters indicated
ceo dustin unselfishly resigned so ZN could save money(filing indicated streamlining) as per his resignation letter so his friend Robert Dunn- a 3d specialist from Viking -could be brought in as director of operations -if ZN again needs a drilling specialist we may see dustin again
in a bigger company Dustin could stay on as a part of large co's top heavy management but ZN is running streamlined to put more dollars to the actual geophysical work
when a drilling specialist is again needed,it sounds like dustin would be willing to execute his drilling expertise again
small co's cannot afford to pad management-but zn is attacked no matter what they do
this is still true
ZN "completed the final design for bidding purposes for the 3D seismic shoot of approximately 72 square kilometers around our Megiddo-Jezreel license." as per the email those who signed for emails received
completing the final design and acreage is important bc
such is necessary for the contract to be concrete/specific and thus enforceable and ready for signing
again,note how the 3d survey area has increased to 72 sq km from the original 50 sq km- the larger the better
the 3-12-19 10k
https://en.wikipedia.org/wiki/Highway_90_(Israel%E2%80%93Palestine)
this link works elsewhere
https://en.wikipedia.org/wiki/Highway_90_(Israel%E2%80%93Palestine)
btw,those who say pps dropped bc bids were waylaid by the dspp program cannot now say it was bc zn has not fulfilled its promises-
pick or choose-at least the diversion theory is a logical outcome for the first days of a zn fundraise
i didnt say zn would have a contract for the 3d survey by apr 30- i quoted -and cited the quote-from the 3-12-19,which said the plan was to have a 3d contract by apr 30
i dont know whether they do have such a contract or not yet- but we do know the final revision of the 3d survey area now encompasses 72 sq km- i havent seen anything on that here yet- a 72 sq km survey is better than the original zn guestimate of 50 sq km
under the most optimistic of conditions the 3d survey-which has now been extended to a design of 72 sq km- will quickly find a commercial field
and under the most optimistic of conditions somebody may partner w zn via a large cash infusion -just as the meged oil wells co received a 50M cash investment from atev
or receive a buyin from delek - delek bought 70% of the license abutting zn's concession to the west
as i've pointed out a filing ca 2017 noted that zn exec management placed restrictions on their selling stock
(beginning ca may 17- a few weeks before spudding mj1-they likely did this to prevent undue stock speculation by speculators-which can send stocks in crazy up and eventually down spirals)
and probably buying stock (outside of automatic options programs which are part of their pay to reserve/save zn on cash)
i've also noted that stock options or stock obtained via those options has fallen in worth just like everybody elses stock
it has been pointed out the % fall in longs stock pps -well, that same % fall in stock applies to the stock obtained via stock options as part of exec pay
since the execs were not allowed to sell such stock(victor gifted some) and such options/stock were priced at then market value,the executive pay for those years was considerably less than the figures bandied by some
and cash pay for those years was ca only 250k
but we do know chair/ceo john brown spent a large amount of his money over the years on zn's projects- tisdal probably knows the most about that
its a few miles west of zn's well-goes thru beit shean miles north of the kibbutz in which resides zn's well- main n-s route from eastern north israel all the way to eilat on the red sea
https://www.google.com/maps/@32.4633098,35.5028864,12z
anything that promotes stability would be a positive for pps,including the recognition of the golan as israeli territory-and of course israeli control of the jordan river valley only ca 3-4 miles from zn's well pad
saudi arabia reportedly offered abbas 10m to accept the deal and abbas reportedly replied it would be political suicide for abbas to accept
but if all countries in the deal stick by the financial carrot and stick... just an immediate impression-since 2 of the parties have been living off the finacial largess of arab states who now would block money if those parties dont accept the deal- assuming this is anywhere close to the actual deal
I've rebutted most of the negative prognostications about zn in previous posts at length
ZN pays as it goes - doesnt get into long term debt-only such long term debt is bonds which are convertible into common stock and thus ultimately wouldnt cost zn much more than fees
much of the hullabaloo re russell index is irrelevant- zn got by for 18 years without being on such- and russell index investors have had 9 months to get out since pps 1st fell below one dollar ca sept 25-27- zn is a spec investment for them and will remain a spec investment for them
most co's like zn apply for another 180 day extension to bring pps to one dollar by building shareholder value-which extensions are regularly granted if the applicant has any reasonable plans-exchanges dont like to lose the 150k in fees /year
if at the end of the 2nd 180 days jan 8,2020 pps is not going to otherwise be over one dollar zn can r/s to stay on the nasdaq-they've signaled their intention in a filing i posted to transfer to another level of the nasdaq during the 2nd 180 days and have not given any indication they would r/s
they/ve never been investigated before and said it was due -though the cause was a complaint by an apparent shorting cartel or entities associated w such who apparently dont politically agree w zn's purposes- sec has not indicated any wrongdoing
price /book of 10 is not unusual for a non-revenue company
price/book and pps for non-revenue co's depends on potential going forward
zn was ca the 5 fastest growth co on nasdaq last june- and if they discover a commercial reservoir they may again be one of the fastest growing- thats one of the reasons they are a spec co invested in by funds looking for spec investments(bc non spec investments usually have small % returns)
and if they discover a commercial field their license would be converted to a 30 yr lease renewable for another 20 years
there is increased activity around zn's license-e.g. delek- which owns 45% of leviathon bought 70% of the license adjacent to zn on the west=
probably figuring the offshore strata may continue under onshore israel- such offshore strata is 5000 to 7000 meters deep- zn's oil shows were near the td bottom at ca 5000 meters w evidence of a petroleum system-
we have no evidence of a delek etc deal but if delek invested in zn's license in some form of deal that would speed things up
if a commercial field is found during the survey this year a new well[possibly from the same pad as the exploratory well(since the 3d survey will surround such well and horizontal drilling can easily extend a few miles now)could be drilled next year,if not sooner if delek etc participated.
in spec co's with no revenue it is not unusual to have price/book ratios of 50-fairly common from what i've seen-and i've seen as high as 200
zn had close to 40m assets til write off due to the noncommercial exploratory well-and if such well aids in discovery of a commercial field due to the 3d survey of 60 square km around the well what then?
they have an experienced C level team w main players having over 30 years experience in oil and gas
and the 3d survey specialist they brought over from viking has 26-28 years of experience/surveys and has supervised as much as 6 wells or surveys and 500 people at a time
the exec compensation committee displayed info showing zn execs were underpaid cf to similar competition and much of their pay is is in stock options to conserve cash-and such options are valued at either the time the option becomes available or is exercised
-so their pay has been much less than some have advertised- those who say zn pps dropped x% should note that the portion of exec pay attributed to stock is much less ,having lost value like everybody else's stock,especially since a filing indicated execs had an agreement to not sell since ca may 17 2017- weeks before the mj1 well was spudded-and execs no doubt restricted themselves to help avoid harmful speculation
and thus execs have not sold stock since may 2017 -except one ex exec who donated stock to nonprofits etc
ceo dustin unselfishly resigned so zn could save money(filing indicated streamlining) as per his resignation letter so his friend Robert Dunn- a 3d specialist from viking -could be brought in as director of operations -if zn again needs a drilling specialist we may see dustin again
drilling plans will be dictated by the 3d survey
oops - pps rose again after rising 6.49% friday
from otcmarkets .com
0.57
[up]0.0108
[up]1.93%
the obvious import of my post was somebody only posted pps down days not pps up days
not surprising to have some market pps down days at beginning of a fundraise