Zion Oil & Gas Inc (ZNOG)

[KyOil]

tothe, it would be great so see some oil sold! Oil produced during testing is sold. First revenue is a great milestone.

In my oil patch, investment is syndicated before drilling. It's hard to get in on an operation that has already found oil. Possible, but very difficult. Operators know exploratory drilling is risky and would like to dilute the risk of capital loss on a dry hole. With partners, they can drill more wells with a given amount of capital and increase their chance of success. However, once the risk is removed (well drilled and oil found) they don't like to share the oil revenue!

The offshore operators in Israel (Noble lead operator, investors Avner, Delek, and Ratio) developing the Leviathan gas field seem to follow the same model. They were all sharing the exploratory risk upfront, and now have to put up capital to complete the find, and will share revenue.

Maybe the guys in TX are in two camps: one camp takes risk for finding the oil and gets a very high reward when it is found, and the other camp wants lower risk with lower return by only investing when oil is found. That is interesting, I'll have to think about it.