Zion Oil & Gas Inc (ZNOG)

[KyOil]

Blessed: Yes, high pressure coming from the formation is a reliable indicator of a new commercial field. As a field is pumped the pressure drops and the gas expands to fill the space vacated by the extracted fluid.

Nothing in the oil exploration business is guaranteed, but high pressure means the oil/gas will flow to the surface at a good rate and expensive article lift is not needed (pump jacks here in KY and elsewhere in the US).

Therefore, some quantity of oil/gas will be extracted and sold from a well showing high pressure. What is not known is how much oil/gas can be extracted before the formation pressure drops to the degree that oil/gas no longer flows from the rock into the wellbore at a commercial rate. If it is a major field, then it could be in production for decades. If it is a small anomaly, then maybe 6 months of production. One of ZN's rationale for the unit offering ending Dec 6 was for additional seismic studies. I assume the purpose of this study is to determine how big and where the formation is around the existing well. Previous seismic work would have directed them to this area, but after logging is done on a real well and focused seismic done in the immediate vicinity, then much more is known. Think of it as a discovery process with clues along the way. Some individual clues are false-positives, but a consistent set of clues is meaningful.

How productive the field is and how long it produces will only be determined after multiple wells are pumping and the production rate plotted on a graph! That being said, I know of several high pressure wells that indicated the find of a major new field and do not know of a high pressure well that was a commercial bust. So, IF they delayed drilling due to higher than expected pressure, then it is a very high probability a major field was found. And I believe the info ZN released indicates that high pressure was encountered per my previous post.