Zion Oil & Gas Inc (ZNOG)

[KyOil]

MJ#1 Reservoir Announcement Size

ZN's stated goal is oil independence for Israel, which means circa 250,000 bopd.

Most E&P companies keep about 10 years reserve to allow time to find new fields before pumping down the fields currently in production.

So, that says to meet the stated goal, ZN needs about 1B barrels, but would be fine with 500 million starting out (5 years reserve).

This is a very large discovery from one well and would be a spectacular result!

So, I'm hoping for 500 million to 1 billion from MJ#1 test data. A smaller start would be ok too, and bigger would be totally miraculous (and I've personally seen other miracles, so being "miraculous" does not rule it out for me).

MJ License Size

As more wells are drilled by ZN (and others) I'm expecting the oil in Israel to increase significantly to the point that Israel becomes a major oil exporter. So, the MJ license could very well have 10s of billions of barrels.

Ghawar is the biggest field on the planet and it took several years to assess its size by drilling wells.

Summary: I'm expecting enough to meet the stated goal in the near term, and long term that Israel will be a major oil exporter.


Steve, if I might help with the numbers:

1 Billion barrels x $9.83 netback/barrel / 100 million shares = $98.30 /share

The 100 million shares is just an estimate of 40 million new shares being issued to drill the new wells. It could be more or less. The netback (profit) per barrel could be higher too, depending on the price of oil and the cost structure. Also, the market may not award the value of the reserves to the pps until more wells are drilled and production is ramping up. On the other hand, the pps is a compressed spring right now! Post your guess and I'll put your number on the board.