Replies to post #1172 on Zion Oil & Gas Inc (ZNOG)

[tortman]

Here is a better article that I found later yesterday on another board. Tells it like it is.

http://www.haaretz.com/hasen/spages/1137622.html

The combination of the natural gas discoveries in the Tamar and Dalit fields and investors' short memories brought another big rally in Israeli oil exploration stocks yesterday, after the Givot Olam Oil Exploration Limited Partnership reported that its Meged 5 well south of Rosh Ha'ayin had found over 60% gas, plus significant quantities of oil, in mud taken from the well on Wednesday night.

But the well is in a field that has been known to contain oil since the 1990s - though the mud came from a stratum from which it was difficult to extract oil in the past.
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In addition, the report is only preliminary, and does not attest to the presence of commercial quantities of oil and gas - or even to any extractable oil at all.

But that did not keep investors from sending Givot Olam shares rocketing up 227% on the Tel Aviv Stock Exchange yesterday. At one point during the trading, the share had even risen 470%.

Even though gas and oil exploration stocks have had a good year due to the other discoveries, Givot Olam had fallen 13.3% since the start of the year - until yesterday. At the end of the day, the company's value had reached NIS 144 million. Some 95% of the firm's shares are publicly owned, with only 4.5% in the hands of the general partners: Tovia Luskin, Nogah Ben David, Shmuel Laurence Becker and Moshe Kelner.

The Meged 5 well was started on June 7, following two years of delays due to various regulatory and bureaucratic issues. It lies four and a half kilometers east of the Beit Aryeh junction and is planned to reach a depth of 4.8 kilometers. Though these first signs of gas and oil appeared at a depth of 4.3 kilometers, the company intends to continue drilling deeper.

Only when the well reaches its final depth will the partnership undertake the various tests required to evaluate the site's potential for producing oil and gas. And even if these are successful, further tests will still be needed to know if production is feasible and commercially viable - a three-month process at least.

Givot Olam went public on the TASE in October 1993. It has so far raised over $50 million in equity on the exchange.

It has drilled four wells in its permit area so far and has found signs of oil several times. But it has yet to find oil in commercially viable quantities.