Replies to post #53463 on Zion Oil & Gas Inc (ZNOG)

[KyOil]

This is what we know about the MJ01 reservoir size potential:

We know there is a fault line between MJ01 and MJ02 and that oil is not recoverable on the MJ02 side of the fault. Zion hopes it is recoverable on the MJ01 side of the fault. So, in one direction there is no oil. That limits the field size.

We know the target zones in MJ01 are not spectacularly thick per a PR from Zion. I don't have time to go back and get it, but someone can if they are interested.

So, if the MJ01 field area only goes in one direction and is not thick, then the reservoir rock volume is not large.

The next factor is porosity, which is now large the holes/cracks are in the rock where the oil/gas/water could reside. Zion PR said the porosity is low, so there is a very small % of the modest rock volume that is oil.

An unknown factor is water cut - Zion has been silent on this. The open spaces in the rock has some % of water and is therefore not all oil.

All of the above factors add up to "Oil in Place", but not all the oil is recoverable.

The primary factor in determining how much oil can be recovered is permeability and Zion stated that the permeability is low - this is why fracking has to be done. Therefore, a modest % of the oil in place is recoverable.

A second factor that affects what % of the Oil In Place can be recovered is formation pressure, and I am pretty sure the formation pressure is modest for the depth of the well. Pressure is need to drive oil to the surface.

An industry standard method to size recoverable oil is a Monte Carlo analysis with the above factors as inputs and the P50 number as an output; which means there is a 50% probability that the P50 amount of oil, or greater, can be recovered. Zion knows what the P50 is for MJ01 re-entry and has reported it to the Ministry. They just choose to keep it a secret from investors from whom they solicit funds, which is very unusual and even unheard of for a company looking for exploration funds. It was large enough to justify the work plan, otherwise the Ministry would not have approved the work plan and hence the license. But, it is not astronomical per all the above factors - I did not do the Monte Carlo, but I know with low inputs the output will be low.

It is just a guess, but I say the P50 for MJ01 re-entry is 20 million barrels.