Zion Oil & Gas, Inc. :: Oil in Israel. (888) 891-9466.

Zion Oil Frequently Asked Questions (FAQ) and Public Question Forum

We have prepared this page to allow our supporters and shareholders to ask questions and get thoughtful answers from us. We understand there is a lot of distortion and misinformation about Zion Oil & Gas on the internet. This page will help you get clear answers and get accurate information.

How to use this page:

1. Review the questions and answers below.
2. Ask your question in the comment field if you do not find the answer.
3. We will review your questions and answer as quickly as possible.

Note: We may not post all questions since there are likely to be repetitive questions or questions that we are not legally able to answer in this forum. If you wish to view investment related questions, please click HERE.

Zion is dedicated to exploring for oil and gas onshore Israel and is 100% focused on its Megiddo-Jezreel License, a large area south and west of the Sea of Galilee that includes the Jezreel and Megiddo valleys. This license gives Zion the exclusive right to explore in an area of approximately 99,000 acres that appears to possess the key geologic ingredients of an active petroleum system with significant exploration potential. Zion’s latest information on ongoing operations can be found on their website: https://www.zionoil.com/updates

Zion’s common stock trades on the NASDAQ Global Market under the symbol “ZN”.

All of this information is contained within the filings with the SEC. Please know that stock issuances do not mean executive staff actually exercise and/or sell the shares. Much of the rumors on the internet about how much the executive staff makes are exaggerated.

1. It is essential to understand that reportable compensation does not equal W-2 earnings.

2. Salary and Bonus represent less than 49% of all reportable compensation.

3. Stock options awarded, regardless of whether those options were exercised, represent over 38% of all reportable compensation.

4. It is important to note that there has been a company-imposed blackout period, restricting the sale or purchase of stock for all employees, implemented on May 15, 2017, which remains in effect to date.

As we previously disclosed, the Securities and Exchange Commission (“SEC”) first informed Zion of a non-public, fact-finding inquiry by subpoena for production of documents received on June 21, 2018, before which Zion had no formal or informal communication with the SEC regarding this matter.

The SEC has asserted no accusation of wrongdoing nor have they expressed any negative opinion of any person within Zion. Zion continues to fully cooperate with and work with the SEC.

Following Zion’s disclosure of the SEC investigation, a putative class action (the “class action”) Complaint was filed against Zion, Victor G. Carrillo, the Company’s former Chief Executive Officer, and Michael B. Croswell, Jr., the Company’s Chief Financial Officer, in the U. S. District Court for the Northern District of Texas. An Amended Complaint was filed on January 22, 2019, and we anticipate filing a Motion to Dismiss on March 13, 2019. Four shareholder derivative suits were filed after the class action, one in state court in Dallas, Texas, and three in federal district court in Delaware. We believe these claims are frivolous and without merit, and we are waging a vigorous defense.
Mr. Carrillo resigned effective September 1, 2018. Here is the resignation letter we filed with the SEC in an 8-K – CLICK HERE.
Zion has been a publicly reporting company since 2007 whose stock has been listed on Nasdaq since 2009, in which time it has filed, as required, audited annual reports on Form 10-K and quarterly reports on Form 10-Q, in compliance with all relevant SEC and Nasdaq rules. We would ask that you refer to those filings to help answer any questions you may have about Zion.
Nasdaq companies whose shares are listed on Global Market and who fail to comply with the required minimum closing bid price of $1 for 30 consecutive trading days will ordinarily receive a so-called deficiency notice. Once such notice is received, the Company will automatically have 180 days in which to regain compliance with the $1 minimum bid price. Compliance is regained by trading at above the $1 minimum bid price for 10 consecutive trading days, subject to Nasdaq requiring a longer trading period if it determines that this is necessary in order to establish long-term compliance with the minimum closing bid price.
Larger oil and gas exploration companies may choose to conduct extensive analytical pre-drilling testing such as 3-D seismic imaging, the drilling of an expendable “pilot” well or “stratigraphic test” to collect data (logs, cores, fluid samples, pressure data) to determine if drilling a well capable of producing oil or gas (full completion with casing and well testing) is justified. The use of pilot or stratigraphic tests is often used in areas where there is little or no offset well data, like Israel, where our exploration license area is located.

While 3-D seismic imaging data can be more useful than 2-D data in identifying potential prospects, its acquisition, and processing costs can potentially be multiples greater than that for 2-D data.

In addition to using 2-D seismic technology prior to drilling, we have historically also utilized gravity and magnetic data, built cross-section maps from offset wells and utilized geophysical analysis from similar geologic targets. We believe that the additional months, delays and costs associated with more extensive pre-drilling testing typically undertaken by larger oil and gas exploration companies are not necessarily justified when drilling vertical or near-vertical exploration wells (as we have historically been doing).

Nonetheless, the absence of more extensive pre-drilling testing may potentially increase the risk of drilling a non-producing well, which would, in turn, result in increased costs and expenses. Additionally, we are typically engaged in drilling deep onshore wildcat wells in Israel where only approximately 500 total wells have ever been drilled, the vast majority of which are relatively shallow. As such, exploration risks are inherently very substantial.

(From 10-K for the Fiscal Year ended December 31, 2017)

Please review the posted questions and ask your question in the comment field if it has yet to be answered:

Responses (59)

  1. tisdal
    September 28, 2018 at 8:10 am · Reply

    Assuming Zion has been busy developing test plans for MJ#1 during this time of rest from the drilling site.

    Will the $5.3 Million raised through the Unit’s Program be enough to fully complete all testing of the MJ#1?

    Will the $5.3 Million also allow for local 3D Seismic Analysis?

    In Summary: How far will the $5.3 Million get us with respect to the FINAL analysis of the MJ#1?

    Thank you for your time and all that you have done to further the energy independence of Israel.

    • Zion Oil & Gas, Inc.
      October 3, 2018 at 8:49 am · Reply

      Please view the last update.

      We plan to test up to five additional shallower zones that have been identified by pre-drilling identification, supported by drilling results, and further supported by post-drilling analysis by third-party review of the MJ#1 open hole logs. We expect testing to take between six to nine weeks barring any unforeseen mechanical delays.

      The $5.3million will be used, in part, to continue the testing of the MJ#1 Well.

      Further detailed information will be in our 10-Q’s and annual 10-K’s.

  2. Nathan Perron
    September 26, 2018 at 7:32 pm · Reply

    I know that natural gas is often found along with oil. Does the MJ #1 have any indications of natural gas?

    • Zion Oil & Gas, Inc.
      September 27, 2018 at 11:28 am · Reply

      What we can answer here that was stated in our Press Release dated February 13, 2018: https://www.zionoil.com/updates/zion-oil-gas-encounters-oil/

      Zion’s President and Chief Operations Officer, Dustin Guinn, provided further understanding of recent events stating, “We were cautiously optimistic given the amount of gas that accumulated in the well after returning from Shabbat after calling total depth (TD) at 5,026 meters (~16,500 feet). After making our first of three open hole logging runs, we decided to ream to bottom to clean the hole out in anticipation of our second logging run. After circulating the well, we experienced a continued and significant increase in gas followed by clear evidence of oil in our circulated mud from the bottom of the well. This is obviously very exciting news and as a result, we have decided to continue to drill up to another 70 meters (~230 feet). We expect that to take a couple of days, and barring any operational difficulties, we will continue with our open hole logs immediately thereafter.”

      Zion’s CEO, Victor G. Carrillo, added, “I am ecstatic to see clear evidence of hydrocarbons (oil and gas) in the deeper portion of our Megiddo-Jezreel #1 well – a project that we have been working on for years. However, at this time we cannot comment on the commerciality or ability to successfully produce the well. We ask that our shareholders continue to pray for safe and successful drilling, logging, and testing operations, and for God’s wisdom for management as we make key decisions in the following days and weeks. Please be patient. We will provide further updates after we have adequate time to properly evaluate the logs and finalize our well testing program following the recent events.”

      However, do read the above in context with the later Press Release dated August 16, 2018: https://www.zionoil.com/updates/zion-oil-gas-confirms-active-petroleum-system-in-megiddo-jezreel-1-well-in-israel/

  3. James
    September 26, 2018 at 2:53 pm · Reply

    What is the status of the class action suit?

    • Zion Oil & Gas, Inc.
      October 3, 2018 at 8:43 am · Reply

      We will update the section on the lawsuits as we are able above. Click ” > CLICK HERE FOR MOST OFTEN ASKED QUESTIONS AND IMPORTANT QUESTIONS”

  4. Gregory
    September 25, 2018 at 8:24 pm · Reply

    The Unit Program ended on September 26. When will Zion release information about the success of the fundraising?

  5. Jason Warren
    September 25, 2018 at 7:12 pm · Reply

    If this can be answered,

    Is it possible to give us a bit of insight on the direction that we “may” proceed in, once we start up operations again, at the MJ#1 site?

    Of these two examples, Would it be more of:

    3D Systemic testing first?
    Penetrate the new zones first?

    Are we going to bypass the zones that have been opened previously, and instead go straight after the new zones? Or are we still going to be spending time on those previous zones, first?
    I’m particularly excited for the zones which showed light crude!

    Any info that you could give us on these, would be awesome!

    Thanks, and God Bless!

  6. Greg Smith
    September 25, 2018 at 12:04 pm · Reply

    Assuming your tests find a pocket of commercial oil, how would you go about extracting same? Also have you encountered any gas? Do you have any way to capture and sell same? Would your operations require angle drilling? Are there other sites in the lease area under consideration?

    • Zion Oil & Gas, Inc.
      October 30, 2018 at 10:46 am · Reply

      Any answers to these questions would be considered material information and would require submission to the public in a different manner when the time is appropriate to do so.

  7. Sharon Sullivan
    September 21, 2018 at 8:16 pm · Reply

    How may I find the details of the salaries at Zion Oil & Gas?

    • Zion Oil & Gas, Inc.
      September 24, 2018 at 12:52 pm · Reply

      Zion has been a publicly reporting company since 2007 whose stock has been listed on Nasdaq since 2009, in which time it has filed, as required, audited annual reports on Form 10-K and quarterly reports on Form 10-Q, in compliance with all relevant SEC and Nasdaq rules. We would ask that you refer to those filings to help answer any questions you may have about Zion. Click Here to see the files.

  8. Robby Simpson
    September 21, 2018 at 7:30 pm · Reply

    What is Zion oil stock worth now?

  9. Gregory Steiner
    September 21, 2018 at 7:16 pm · Reply

    What’s the straight and simple story on progress to date?

    • Zion Oil & Gas, Inc.
      September 25, 2018 at 9:14 am · Reply

      From Previous Press Releases:

      (8/16/2018) The MJ #1 has successfully demonstrated the existence of an active petroleum system. Oil has been encountered which we believe confirms that mature source rocks have expelled hydrocarbons that have migrated into a trap which was drilled by MJ #1; and
      There are multiple identifiable targets and objectives that have been observed based on drilling, testing, and petrophysical analysis, which we have yet to test.

      (8/21/2018) Zion has only tested approximately 220 feet of a well that was drilled to a total depth of over 16,600 feet, or less than 1.5% of the total measured depth. Zion emphasizes that there are multiple zones that may be capable of yielding material amounts of hydrocarbons over the 16,000 feet of the geologic column not yet tested. We believe it is imperative to further explore the well’s potential based upon independent 3rd party petrophysical analysis that suggests the existence of hydrocarbons within MJ #1.

      (9/7/2018) Zion’s petrophysical analysis, in conjunction with observations, while drilling the MJ #1 well, has identified five additional primary zones of interest above the Mohilla formation that, contingent upon adequate financial resources, Zion plans to test. As has been previously reported, there are naturally fractured carbonates in the shallower zones that have effective reservoir potential. That, coupled with internal and 3rd party petrophysical analysis of Zion’s open hole logs, gives Zion optimism and confidence to proceed with further testing, and Zion believes that it is imperative to test these zones of interest.

  10. Zion Oil & Gas, Inc.
    September 18, 2018 at 1:58 pm · Reply

    [Here is a sample way to ask a question:] Have we stopped drilling yet?

    • Zion Oil & Gas, Inc.
      September 18, 2018 at 1:59 pm · Reply

      [Sample Response:] Yes, drilling operations have been completed. We are currently testing our MJ #1 well.

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