As the holiday season arrives, our work continues without letting up on the pace.

Left to Right: Dr. Bariudin, John McKenney, Dr. Druckman and
Israel’s Petroleum Commissioner, Dr. Mimran

On Tuesday, December 15, 2009, I travelled up to Jerusalem with John McKenney, Zion’s Project Manager, to attend a meeting at Israel’s Ministry of National Infrastructures. We met with Israel’s Petroleum and Mining Commissioner, Dr. Ya’akov Mimran and Dr. Victor Bariudin, Israel’s Senior Coordinator of Oil & Gas Production. Also present at the meeting was Zion Board member, Dr. Charlie Druckman (who was Israel’s Petroleum and Mining Commissioner before Dr. Mimran). We discussed Zion’s current operations and our plans for the future.

Meeting at Zion’s Caesarea Office with the team from Baker Hughes and Baker Atlas

On Wednesday, December 16, 2009, a full team from Baker Hughes and Baker Atlas visited our Caesarea office in order to discuss the work in the year ahead.

Of course, the operations continue independent of meetings; here is this week’s operations update.

The Ma’anit-Rehoboth #2 Well

The Ma’anit-Rehoboth Well Site showing the workover rig

Oil samples brought to Zion’s Caesarea office

We drilled the Ma’anit-Rehoboth #2 well to a depth of 17,913 feet (5,460 meters).

As detailed in last week’s update, we used a workover rig for swabbing operations and retrieved a small quantity of crude oil that we believe came from the open hole section below the last casing point at 15,830 feet (4,825 meters).

Of course, as we also noted in last week’s update, at this stage, we are unsure as to whether we have made a discovery of any hydrocarbon reservoir (and even if we have, we know nothing regarding its possible commercial viability). It may be several months before we are able to arrive at any conclusive determinations.

The workover rig allowed us to swab, confirm that the tubing is not plugged (i.e. blocked) and obtain this information in a cost effective manner.

However, as we do not have zonal isolation in the open hole section of the well, we released the workover rig during the past week and are now evaluating the next steps that we can or should take in order to test the zones of interest individually. It is currently anticipated that we will not resume testing procedures on the Ma’anit-Rehoboth #2 well until after March 2010.

Drilling Operations at the Elijah #3 Well

The A.M.E. drilling rig, at the Elijah #3 site

In last week’s update, I mentioned that we had to carry out fishing procedures due to the failure of a drilling bit.

I am happy to report that the fishing was successful. We recovered the broken piece that came off the drilling bit, including a number of ‘chips’ of metal. As our Drilling Manager remarked, “It was a successful ‘fish and chips’ operation.”

During the past week, we continued drilling to the next casing point. We also successfully ran and cemented the 10.75” casing string..

So, as of this morning, the Elijah #3 well has been cased from the surface down to 6,706 feet (2,044 meters) and, as of this afternoon, we are testing the blowout preventer system in preparation to drill deeper (presently in Upper Jurassic carbonates) as planned.

Please note that, due to the holiday period, the next update will be on Friday, January 8, 2010.