Zion Oil & Gas Inc (ZNOG)

[flatron]

I found this on another board.I think it all depends how much oil they find..................................................... I have seen many discussions and speculations as to what Zion's share price might rise to if they announce an oil/gas find with commercial quantities.

First, Zion's share price will have nothing to do with what other companies are doing.

Second, share price will ultimately be dictated by what the commercial value of the oil/gas that is pumped out of the ground.

So, if Zion were to strike a reservoir of oil and/or gas equivalent to what Noble found in the Med., then the book value of the stock would be $33 billion/ 15 million shares outstanding=> $2200/share. But the share price would ultimately be based on the earnings of the company. So using the Noble find as a benchmark again, if the $33 billion were extracted over, say, a 20 year period, then the earnings per year would be $33 billion/20 years or $1.65 billion per year. Divide that by the number of outstanding shares, then multiply by a P/E multiple (18 on average for oil/gas producers) and you get ($1.65 billion/15 million shares)*18 P/E multiple => $1980 per share.

Now, these figures are based on a VERY BIG assumption that Zion is sitting on something equivalent to what Noble found in the Med. If they have, I think we've seen our last $5 rights offering. The next IPO will come after Zion announces the size of their find, unless there's nothing down there, in which case we'll probably see another $5 offering.

Thoughts?