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
Imo. Do your dd before investing. I'm not a financial adviser nor compensated for my posts. They don't believe what they say, so why should you?
