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.

> MOST OFTEN ASKED QUESTIONS AND IMPORTANT QUESTIONS
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 (61)

  1. Vernon murdock
    November 23, 2018 at 10:10 pm · Reply

    Only question I have will Zions continue to look for oil and stay in business

  2. Tony
    November 21, 2018 at 3:00 pm · Reply

    I’ve never doubted God’s part in this. My doubt about Zion management happened this past year when there was no, Merry Christmas or Happy Hanukkah. Unless I missed it. I wrote to them about it, no response. It was uncharacteristic. Sad. God will still prevail.

  3. Michael
    November 21, 2018 at 4:38 am · Reply

    I am a shareholder and do believe in Zion Oil and Gas, its mission and the potential for financial returns. Surely I mirror much of what other shareholders maintain. Regardless of all the issues others have created for Zion, which may or may not be valid, the most important to us all is is there oil there in #1? As per your most recent press release there appears no is the answer.

    That by itself is a disappointment. Yet the quest is to locate oil and gas. To drill again seems a difficult task considering the side issues surrounding this endeavor presently. How does Zion conceive of raising the capital through stock sales to achieve its original mission?

    I own a modest amount of shares yet would be willing to invest more into Zion if there was a solid approach to 1) dealing with the negative and costly sideline issues and 2) developing a plan of action to drill elsewhere. What internal actions can Zion share with us, the owners, so we can decide to reinvest or just watch something fold and fail?

  4. Spifster
    October 23, 2018 at 3:40 pm · Reply

    Can you confirm that testing actually started on October 14? Also, will there be updates when each zone is finished, or when testing is completed?

    Thank you and may His peace be upon you.

    • Zion Oil & Gas, Inc.
      October 25, 2018 at 2:16 pm · Reply

      Yes, we resumed testing. As always, we will update as often as the company has clarity and can provide solid information.

  5. Ryan
    October 13, 2018 at 10:33 am · Reply

    I understand there were no accounting issues between the firm and Zion. But can you say anything further about why they chose to resign? A little more info would help with confidence moving forward.

    • Zion Oil & Gas, Inc.
      October 30, 2018 at 10:44 am · Reply

      We know exactly what we reported on our 8-K and our previous auditor’s confirmation of our report here.

  6. Ron Meyn
    October 12, 2018 at 8:45 am · Reply

    Will ZN have more frequent updates?

    What is status of lawsuit deadline for plaintiffs ?

    Is last zone done testing ? or will more testing be done to that Zone ?

    • Zion Oil & Gas, Inc.
      October 12, 2018 at 9:14 am · Reply

      All latest updates you will be able to see by clicking HERE.

      All information about the lawsuits will be posted on this forum.

  7. JSheag
    October 11, 2018 at 10:02 am · Reply

    What can you tell us about October 10th reports of independent auditor/accounting firm, description depending on report read, resigning/quitting?

    • Zion Oil & Gas, Inc.
      October 12, 2018 at 9:16 am · Reply

      All filings about the auditors can be found through our 8-K’s.

      This was filed on October 12:

      “On October 11, 2018, the Audit Committee engaged RBSM LLP (“RBSM”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. The formal engagement with RBSM has been executed.”

  8. tisdal
    October 10, 2018 at 8:11 pm · Reply

    First, thank you for your response to my previous questions. Realize that you are busy so it is appreciated that you take the time to respond.

    Can you explain what just took place with Zion’s independent registered public accounting firm.

    • Zion Oil & Gas, Inc.
      October 12, 2018 at 9:17 am · Reply

      We filed this in an 8-K on October 10:

      “By letter dated (and received) October 3, 2018, Malone Bailey LLP (“Malone”) notified the Audit Committee of the Board of Directors (the “Audit Committee”) of Zion Oil and Gas, Inc. (the “Company”) of its resignation as the Company’s independent registered public accounting firm.

      The previously issued reports of Malone on the Company’s financial statements for the fiscal years ended December 31, 2017 and 2016 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, other than an explanatory paragraph relating to the Company’s ability to continue as a going concern.

      During the fiscal years ended December 31, 2017 and 2016, and the subsequent period through October 3, 2018, the date of Malone’s resignation, there were no disagreements with Malone on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Malone, would have caused Malone to make reference to the subject matter of the disagreements in their reports.”

      We filed this in an 8-K on October 12:

      “On October 11, 2018, the Audit Committee engaged RBSM LLP (“RBSM”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. The formal engagement with RBSM has been executed.”

  9. tisdal
    September 28, 2018 at 1:02 pm · Reply

    How many shares were issued in the most recent Unit’s Program?

    • Zion Oil & Gas, Inc.
      October 3, 2018 at 8:36 am · Reply

      We will not disclose this before our next Q report.

  10. tisdal
    September 28, 2018 at 12:57 pm · Reply

    From Zion’s recent 10Q:
    ===================================
    On June 14, 2018 Zion submitted its Application for Extension of Continued Work Program Due Date on the Megiddo-Jezreel License No. 401 . The additional time was necessary because the Company had still not completed testing and evaluating all planned testing zones. On July 1, 2018, Israel’s Petroleum Commissioner granted Zion’s work program report extension to November 1, 2018, as shown below.

    No. Activity Description Execution by:
    1 Submit program for continuation of work under license 1 November 2018

    Therefore, Zion now has until November 1, 2018 to decide on and provide a continued work program for our license area and until late in 2019 to spud a 2nd well.

    ===============================

    Does Zion still plan to meet this deadline to Submit program for continuation of work under license or will Zion be filing for an extension?

    • Zion Oil & Gas, Inc.
      October 3, 2018 at 8:34 am · Reply

      We are not able to comment on this at this time but will report when completed.

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