Zion Oil & Gas Inc (ZNOG)

[KyOil]

Risk Factor #3 - Regulatory Approval

Great thoughts were shared on Risk Factor #2 regarding deferring expenses and raising revenue. A score card is below which will keep the running status of each risk factor as we discuss it.

The next risk factor (#3) is regulatory approval. At the time of spudding, there was risk, albeit low, that ZN could not get an extended license term. The well was spud in June and the license expired in Dec. That is a fast time line to drill, test, report and get a license extended. The risk now is zero since not only did ZN get a license extension, but a TWO year extension was granted until Dec 2019. This was a tremendous vote of confidence from the Energy Ministry.

Zn also had to secure a test permit, which was done.

ZN also had to get surface agreement in place from the local land owner, which was done.

The remaining risk is that ZN can not get permits to transport the oil and/or gas to the sales point. The author assesses this risk as low since the alternative is to continue buying crude oil from Turkey.


Time will be allowed to discuss this risk factor then we will move to the next.

Here is the scorecard for the previously discussed risks: