Jackpot! Israel on Cusp of Energy Revolution

Julie Stahl, CBN News Mideast Correspondent

JERUSALEM, Israel — Unrest in the Middle East is threatening Israel’s energy supply.

But recent natural gas discoveries and extracting oil from shale could make the country energy independent just in the nick of time.

Energy Breakthrough?

Some are calling it a potential energy revolution.

Off the coast of Israel in the waters of the Mediterranean Sea, explorers have found what is being called the largest offshore gas reserve in the world and the biggest find in a decade.

The discovery is a major development because Israel has long been the one Middle East country without its own oil and gas resources.

“The joke was ‘Why did it take Moses 40 years to bring the people of Israel from Egypt to Israel? Because he looked for the only place in the Middle East that lacked oil and gas,’” said Gideon Tadmor, CEO of Delek Energy.

“So that was the joke. But we proved the joke to be wrong, and actually we know that Moses brought us to the right place,” he added.

Delek Energy and its American partner, Noble, are behind the discoveries that will start producing natural gas for customers in 2015.

Energy expert and former CIA director James Woolsey says the gas fields make Israel energy independent.

“They’re extraordinarily important and strategically very advantageous I think for Israel,” Woolsey told CBN News.

Shale Oil

In addition to natural gas, it appears the Jewish state is also rich in oil shale– a fine-grained rock which can be used to produce oil through a special process.

Harold Vinegar, chief scientist with Israel Energy Initiatives, says the amount of oil shale buried here might equal the oil reserves of Saudi Arabia.

“We think it’s conservatively estimated at about 250 billion barrels of oil contained in the Israeli oil shale – probably the second or third largest deposit in the whole world,” Vinegar said. “And it has a tremendous potential to make an oil industry here.”

Experts say there’s enough oil shale to produce at least 50,000 barrels of oil a day – enough to meet Israel’s military and civil aviation needs for 25 years.

Israel Energy Initiatives is now performing quality tests.

Vinegar, who was also a chief scientist for Shell, says the samples indicate the oil quality to be very high before it’s even refined.

As the world population increases, so will the demand for crude, and that will push up the price.

In response, countries like Israel that import most of their energy will have to develop unconventional resources like oil shale.

“There’s nothing scarier than running out of energy,” Vinegar said. “I mean, wars have been fought entirely for oil. And so this is something we feel we’re doing for Israel, which is to develop the oil shale here.”

If his group’s plans work out, the land of Israel will hold even more promise for the future.

Israel’s Sara, Myra May Hold 6.5 Trillion Cubic Feet of Gas

Bloomberg June 30, 2011

Holders of the Sara and Myra exploration licenses off Israel’s Mediterranean coast said today that a seismic survey showed they may hold 6.5 trillion cubic feet of natural gas.

“This is an excellent report for us and for the energy sector,” Ohad Marani, the chief executive officer of Israel Land Development Co. Energy Ltd., said at a conference in Tel Aviv. The average probability associated with the results is 54 percent, he said.

The results for Sara and Myra follow other gas finds off Israel since 2009, including the Tamar and Leviathan discoveries that together hold an estimated 25 trillion cubic feet. The finds are sufficient to meet Israel’s domestic needs eventually and enable it to export gas, industry executives and government officials have said.

“Its always exciting to find natural resources,” said David Kaplan, a Tel Aviv-based energy analyst at Barclays Plc. “The government has shown concern about having an effective monopoly on natural gas and none of the partners in Sara and Myra are partners in Tamar.”

Tamar partnership companies fell in Tel Aviv trading. Isramco Negev 2 LP dropped 0.7 percent to 0.42 shekels at 12:41 p.m. Avner Oil Exploration LLP (AVNRL) declined 2 percent to 2.03 shekels. Delek Drilling LP lost 1.5 percent to 11.31 shekels.

Kaplan noted that Tamar is already being developed and may produce gas by 2013, while Sara and Myra are still targeted prospects rather than discoveries. “In the best case scenario, where everything goes perfectly, the first product may be two to four years from now,” he said.

Israel Land Energy fell 8 percent in Tel Aviv today after rising 13 percent yesterday on press reports of the estimates. Modiin Energy Ltd., another partner in the licenses, retreated 8.1 percent after gaining 8.8 percent in the previous session.

To contact the reporters on this story: Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net; Gwen Ackerman in Jerusalem at gackerman@bloomberg.net.

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

 

Zion Testing Ma’anit Well

In his July 1 letter to shareholders, Zion Oil & Gas CEO Richard Rinberg wrote that Zion was planning to test the Ma’anit-Joseph #3 well in spite of disappointing wire-log reports. Based on the wire log data, Rinberg reported, “there is little chance that the Ma’anit-Joseph #3 well contains hydrocarbons in commercial quantities.”
The reason Zion decided to move forward with physically testing the well is that during drilling they experienced “significant natural gas shows.” The gas, according to Rinberg, pushed past the heavy drilling mud, indicating that it,”appears to be under relatively high pressure at depth.” Testing the well will determine exactly where the natural gas is coming from and whether there’s enough of it to make the Ma-anit-Joseph #3 a commercial well. Testing the well will also give Zion greater insight into the geology of their surrounding license area and may help them determine where to drill next.

When I first read Rinberg’s letter I was tempted to be a bit dis-heartened by the phrase describing the wire-log interpretation, “there is little chance” of a commercial discovery. But then I remembered another letter, one written to the Hebrew people about 2,000 years ago; it listed the heroes of old and the faith that allowed them to persevere in spite of the current technology telling them. “there is little chance.”

• There was ‘little chance’ that a worldwide flood would destroy every living thing that wasn’t packed in Noah’s boat.
• There was ‘little chance’ that Abraham, at 100 years old, and Sarah, at 90, would have a child.
• There was ‘little chance’ that Isaac’s life would be spared by an angel and a ram caught by his horns in a thicket.
• There was ‘little chance’ that a slave child with a death warrant on his head would be spared, raised in Pharaoh’s household, and exiled to the desert 40 years would lead his people out of slavery and into a Promised Land.
• There was ‘little chance’ that a rag-tag group of pilgrims marching around Jericho could make the city’s walls fall down.
• There was little chance that Gideon’s 300 men could rout an army of hundreds of thousand Midianites.
• There was little chance a skinny 17 year-old kid could kill a fully armored Philistine warrior giant with a sling shot.

I could go on … Hebrew history is full of heroes who were given ‘little chance’. What was the one thing they had in common that far outweighed ‘little chance’ of success? Faith.

“Now faith is being sure of what we hope for and certain of what we do not see. This is what the ancients were commended for.” (Hebrews 11:1)

Faith doesn’t come from wire-log data; it comes from the One Who does what He promises. I’m looking forward to test results.

 

Israel’s Energy Revolution

CBN (Christian Broadcasting Network) reports on Israel’s energy revolution and recent discoveries of natural gas (the largest worldwide in over a decade) and oil shale (the second or third largest deposits in the world).

Zion Oil Opens $31+ Million Rights Offering

On Thursday, June 23 Zion Oil & Gas, Inc. (NASDAQ: ZN) filed a prospectus with the SEC for a $31.25 million rights offering to current stockholders. The rights offering consists of 6,250,000 non-transferable subscription rights @ $5 per Unit. Each subscription right Unit includes (1) share of Zion common stock and (2) warrants to buy additional shares of common stock @ $3.50 per share. Zion stockholders will receive (1) subscription right Unit for every (4) shares of Zion common stock they own as of June 15.

What this offering means is that if a Zion stockholder owned 1,000 shares, for example, of common stock on June 15, Zion will send, at no charge, 250 ‘subscription rights Units’. Each Unit, if exercised @ $5, entitles the stockholder to (1) share of Zion  common stock and (2) warrants to buy additional shares @ $3.50 within one year of the offering’s close. Exercising the Unit offering including the Warrants would cost the stockholder a total of $12 per (3) shares of Zion common stock. As of this writing Zion common stock is trading on NASDAQ (ZN) @ $5.56 – buying (3) shares of Zion common stock at the current trading price would cost $16.68.

This offering is currently scheduled to close on July 25, 2011. Even though the offering limits stockholders to (1) subscription right per (4) shares of common stock owned, stockholder may oversubscribe to purchase additional that remain unsubscribed at the close of the offering, subject to availability and allocation.

If fully subscribed, Zion will raise $31,250,000 from the sale of Units, and if the warrants are fully exercised within a year of the offering’s close, an additional $43,750,000. According to the Prospectus Zion Oil & Gas will use proceeds from the offering “for (i) furthering our oil and gas exploration program by carrying out geological and geophysical studies on our exploration areas, (ii) complete logging, interpretation and any production testing that may be deemed needed with respect to the Ma’anit-Joseph #3 well (iii) drilling a well on our Jordan Valley License and (iv) general corporate purposes.

Zion’s Prospectus describes the company’s current and applied for exploration territory in Israel:

“We currently hold two petroleum exploration licenses, which we have named the Joseph License and the Jordan Valley License, covering approximately 139,000 acres of land onshore Northern Israel.  A third petroleum exploration license, the Asher-Menashe License covering approximately 79,000 acres of land adjacent to the Joseph License, expired on June 9, 2011, its scheduled expiry date. We have continuously held the Asher-Menashe since June 2007 and we have drilled one exploratory well in this license area. Prior to the expiry of the Asher-Menashe License, we submitted to Israeli Petroleum Commissioner an application to extend the license. We do not believe that the Israeli Petroleum Commissioner will deny our application for the extension while we have a current well on the site; however, no assurance can be provided that the requested extension will be granted.

“In February 2011, we submitted to the Commissioner applications for two exploration licenses and an application for a preliminary exploration permit. One of the license applications and the application for the preliminary exploration permit cover substantially all of the area covered by our previous Issachar-Zebulun Permit, which expired on February 23, 2011. We named one license application (with respect to part of the previous Issachar-Zebulun Permit) the Jordan Valley License Application and the preliminary exploration permit (applied for with respect to substantially the balance of such area) the Zebulun Permit Application. We named the other license application the Dead Sea License Application as it relates to areas within the vicinity of the Dead Sea.”

Zion Oil & Gas Applies for Asher-Joseph Permit

DALLAS and CAESAREA, Israel, June 14, 2011 (GLOBE NEWSWIRE) — Zion Oil & Gas, Inc. (Nasdaq:ZN) announced today that on June 13, 2011, the Company submitted an application to the Israeli Petroleum Commissioner’s Office, requesting the grant of a new petroleum exploration permit area adjacent to Zion’s Joseph License area. The new permit application has been named by Zion, the “Asher-Joseph Permit Application”.

The Asher-Joseph Permit Application area covers approximately 80,000 acres of land and is to the west and south of Zion’s Joseph License area. It is onshore Israel and traverses a section of land, adjacent to the coastline, between Haifa and Tel Aviv. The grant of a permit would allow us to conduct, on an exclusive basis through a specified period, preliminary investigations to ascertain the prospects for discovering petroleum in the area covered by the permit.  Unlike a license area, where test drilling may take place, no test drilling is allowed on a permit area.

Zion’s Chief Executive Officer, Richard Rinberg, said today, “We have three applications for new exploration areas pending before the Israeli Petroleum Commissioner’s Office: the Asher-Joseph Permit, the Zebulun Permit and the Dead Sea License.

“We continue to implement our exploration and drilling program and build on our progress to date. If granted the new exploration areas, we intend to acquire additional seismic and other geological and geophysical data, as we work towards refining potential drilling prospects.

“Currently, drilling operations at our Ma’anit-Joseph #3 well continue. We have reached our target depth of approximately 19,357 feet (5,900 meters), in the Permian geologic layer in Northern Israel, and are now preparing for open-hole wireline logging operations, planned to commence this week. Depending on the outcome of our wireline logging and subsequent interpretation, we may determine to drill this well deeper.”

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

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Haifa and Tel Aviv. It currently holds two petroleum exploration licenses, the Joseph License (on approximately 83,000 acres), between Netanya, in the south, and Haifa, in the north and the Jordan Valley License (on approximately 56,000 acres), just south of the Sea of Galilee. The Asher-Menashe License (on approximately 79,000 acres), which Zion has held continuously since June 2007, expired on June 9, 2011 (its scheduled expiration date); however, prior to that date, Zion submitted an extension application to Israel’s Petroleum Commissioner.

Israel’s Chief Geologist Visits US Explorers

Last week, Israel’s chief geologist visited Houston based oil and gas explorer ATP’s Gulf of Mexico offshore drilling platform to see best offshore exploration practices for himself. Israel geologist Victor Bariudin made the trip to get an understanding of ATP’s safe and effective offshore drilling procedures and make a recommendation to his country’s Minister of National Infrastructures, Dr Uzi Landau. At the end of his drilling platform visit, Mr. Bariudin stated, “I will recommend to our minister and our staff that we use this method and to work with them.” ATP followed (also Houston based) Noble Energy into the exploration waters of offshore Israel and into the world’s largest natural gas discovery in more than a decade. Testing indicates that an offshore oil discovery isn’t far behind.

Israel’s expectation is that the recent gas discovery and the likely possibility of significant oil reserves will make the country energy independent and even an energy exporter. The economic impact of gas and oil production in Israel could be more profound to the nation’s GDP than any industry the country’s history.

Houston’s Fox affiliate captured Bariudin’s Gulf of Mexico drilling platform highlights in the video below.

Earlier this month Mr. Bariudin, Israeli Petroleum Commissioner, Dr. Michael Gardosh, and other Israeli officials visited with the managment of Zion Oil at Zion’s Caesarea, Israel offices. Zion holds the largest onshore exploration rights territory in Israel.

Israeli Oil Could Have a Bigger Impact Than Gas

The Jerusalem Post reported this week on an assessment from the Swiss based financial services giant UBS, that a significant oil find could have a greater impact to Israel’s economy than the recent massive natural gas discoveries offshore.

UBS analysts, Roni Biron, Ziv Tal and Reinhard Cluse wrote in a report on the Israeli gas and oil sector that: “Our calculations suggest that, in the event of success, oil could potentially deliver a boost to GDP growth, the budget and the external balance that might potentially be even bigger than the impact from natural gas.

“This would also imply a larger appreciation potential for the shekel and an even greater requirement to manage the resulting macroeconomic challenges through a carefully managed sovereign-wealth fund.”

Simply put, UBS analysts are saying that discovering oil could mean more to Israel’s economy, trade balance, domestic budget, value of the shekel and long term national wealth than the recent gargantuan offshore natural gas finds that will make Israel both import independent and a major exporter. Not to mention (they didn’t) that being oil and gas independent would add significantly to Israel’s national security.

The UBS analysts reminded readers that the Leviathan and Tamar fields were the world’s largest gas discoveries in the past decade, that Tamar would be sufficient for all of Israel’s domestic needs, making Leviathan available for 100% export. They reported, “natural- gas exports from the Leviathan field will begin in 2017 at almost $3 billion per year, before rising to almost $6 billion in 2020.”

$6 billion per year from natural gas exports – that’s significant! What’s more significant is that the UBS report was about how a oil could have a greater impact.

Zion Oil Stock Continues Upward Trend

Zion Oil & Gas Stock (ZN, NASDAQ) continues to rise since it’s six month low of $4.31 back in January. On March 2nd of this year Zion stock shot to $5.81 after broadcast media interviews and print news articles with Founder John Brown and CEO Richard Rinberg during the National Religious Broadcasters convention in Nashville.

Zion stock settled down under $5.00 during much of March and then began to climb in April, topping at $5.40 after April 14 news of Israel awarding Zion Oil & Gas the Jordan Valley exploration license. Zion stock on the last day of trading since this report finished at $5.37.

Trading analyst, SmarTrend, announced Thursday that their  ’uptrend’ call has been “vindicated” by Zion’s recent stock performance.

So what does this mean to those of us who aren’t Wall Street day traders or stock analysts? I’m not sure – I’m not one of those guys. I own Zion Oil stock because I believe in what they’re doing and I believe in the nation of Israel. Zion’s vision is to find oil in Israel and provide for the nation’s domestic energy needs through that(those) discovery(ies).

What about the daily ups and downs of Zion’s stock? At this point, who cares? I figure that an oil company’s stock value isn’t really all that important until they’ve either discovered oil and/or gas, or they give up looking. Zion hasn’t made a discovery (yet) and they sure as heck haven’t shown any signs of giving up. Until one or the other happens, I’m all in.

*Reminder – the editor of www.OilinIsrael.net is not an investment consultant or a stockbroker (not even close). For investment advice see your financial counselor, or better yet – if you’re a believer in Israel’s G-d, seek His advice.

Israel could transform global energy markets

In a March 11, 2011 Jerusalem Post article Dore Gold, president of the Jerusalem Center for Public Affairs and former Israeli ambassador to the UN stated that Israel’s newly discovered fossil fuel reserves could ‘revolutionize the global energy sector’.

Dor stated in the article, “Libyan oil accounts for less than 2 percent of world oil production, yet the revolt against Muammar Gaddafi has managed to shoot up the price of oil to more than $100 per barrel in the last month.”

The article goes on to report that, at the same time Israel holds the world’s third largest oil shale deposits and, because Israel’s Tamar gas field is capable of supplying the country’s domestic natural gas fields for the next twenty years, 100% of the gas harvested from the Leviathan field (estimate at twice the volume as Tamar) could go to export markets.

What does this mean? As Middle East oil supply from Arab countries becomes more expensive and more politically contentious, Israel’s energy exports from existing and pending discoveries should be coming online.

Bottom line: Israel energy exports in the near future could very well change the political and economic landscape in the Middle East. With Arab political regimes falling apart at the seams and oil prices spiking with the evening news, the fact that the only stable democratic government in the region and America’s best friend (yes, it’s still true) in the Middle East may very soon be one of the world’s energy exporters is a comforting thought. Go Israel!

Click here to read the full Jerusalem Post article.

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