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.

 

Video Shoot at Zion’s Ma’anit-Joseph #3 Well

We (True Potential Media) traveled to Israel for a week of shooting video at Zion Oil’s office in Caesarea, their Ma’anit-Joseph #3 well site in Northern Israel, and in Jerusalem. Zion Founder John Brown, CEO Richard Rinberg, President and CEO Bill Ottaviani and Executive VP Victor Carrillo were on-site in Israel for interviews on the vision and progress of Zion Oil’s mission in Israel.

The video, photographs, and other content produced during the shoot will be compiled and presented over the next few weeks and months as Zion shares its story and its vision with the world: ” … to assist Israel in the restoration of the Land by finding and producing oil and gas – helping to make Israel politically and economically independent.”

Visit the Oil in Israel and Zion Oil Facebook pages as we add photos to the Israel albums.

Oil Discovered in Northern Israel

In case anyone missed it last summer, oil has been discovered in Northern Israel. We’re not waiting for an oil discovery – it’s already happened! The oil has been/is being produced and sold. What’s more, the exploration company, Givot Olam, based its search for oil in Israel on Scripture. That’s right, oil has been discovered in Israel, based on Bible passages predicting the discovery and its location. The same Bible (Torah) passages used by my father, Jim Spillman, back in 1981 in his book, The Great Treasure Hunt. The same passages Zion Oil & Gas Founder John Brown heard Dad teach on a Zion Temple in Michigan thirty years ago and took to heart. Included Jacob’s Blessing, recorded in Genesis 49 and Deuteronomy 33, is the prophecy of a last days oil discovery. Jacob’s descendants will be blessed from the “deep that coucheth beneath”; “for the chief things of the ancient mountains, and for the precious things of the lasting hills, and for the precious things of the earth.” Issachar and Zebulun “shall suck of the abundance of the seas and of treasures hid in the sand.” Asher will “dip his foot in oil.”

The prophecy of oil in Israel isn’t going to be fulfilled someday – it is being fulfilled as we watch!

A January 13 Globes Article follows progress at Givot Olam’s Meged 5 well site; I’ll share a few excerpts here:

“Givot Olam Oil Exploration LP (TASE:GIVO.L), which is currently fracing (hydraulic fracturing) sections of its Meged 5 well and carrying out production tests, is seeking to cool investors’ enthusiasm after yesterday’s flare at the wellhead, which indicates the presence of fuel at the well. The scale of production, if any, is unknown, but the flare is a routine procedure during production tests.”

“A few months ago, Givot announced that production tests conducted during the summer produced an average of 382 barrels of oil a day. Fracing is now underway in sections 1-6 of the borehole to speed up the production rate, and production tests are underway of sections 7-8.”

“Givot sold 6,000 barrels of oil produced during last summer’s production tests to Oil Refineries Ltd. (TASE:ORL) at the below market price of $60 per barrel. It cannot be ruled out that oil currently being produced is also being sold to Oil Refineries, and is why there are oil tankers at the wellhead. However, how much oil is being sold is not known.”

“A capital market source close to the matter told “Globes”, “When you peel away all the conduct of the past year, Meged 5 ultimately has something real.”

Givot’s Meged 5 is just the beginning of onshore oil discoveries in Israel. I believe Givot will drill more and produce much more in their Meged oil field.

Zion Oil & Gas, just to the north of Givot Olam, controls 327,000 acres of exploration territory and is in the final stages of drilling their fourth well, the Ma’anit-Joseph #3. In just weeks, Zion will be at its final depth of 19,000 feet.

With Israel’s recent gas discovery, the country is now staged to be natural gas independent (natural gas now powers some of Israel’s power plants and by the end of the decade, most likely, all electrical generation will come from natural gas fired plants). Noble Energy, one of the exploration partners on the gas discovery says they believe substantial oil reserves are under the gas fields.

Israel now has enough natural gas to supply its needs into the foreseeable future and for export. With the ongoing operations of Givot Olam, Zion Oil & Gas, Noble Energy can oil independence for Israel be far behind? I don’t think so.

What do you think?

Kibbutz Ma’anit Agreement Paves Way for Zion’s M-J#3 Well

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According to company CEO Richard Rinberg, Zion plans to start drilling the Ma’anit-Joseph #3 (MJ#3) in August. Zion signed an agreement with the land owner, Kibbutz Ma’anit, for access to the well site and continues the permitting process with various Israeli state agencies.

Rinberg wrote Zion share holders in his May 28 update:

“Further to our ongoing exploration work on the Ma’anit geological structure, we are moving forward with the required permitting and planning for the M-J #3 well (targeted for the ‘deep’ Permian geologic structure). (Deut. 33:13-16)
We are well underway in the process of assembling the various product and service suppliers needed to drill this new well. As reported last time, we instituted a bidding and selection process designed to ensure that we use the best available resources, offering Zion the most favorable overall value. Based on early vendor indications, we anticipate a strong response to our RFQs (Request For Quotes) and have already begun receiving price quotes. All price quotes are expected by month-end and the final vendor selection will follow shortly thereafter.
Permitting for the new well continues to proceed favorably with the recent achievement of a very significant milestone: agreement with Kibbutz Ma’anit granting us access to Kibbutz land where we desire to drill the MJ-3 well.
In Israel, ‘permitting a well’ is a very lengthy and complicated process, as permits are required from various authorities, including the: Water, Fire, Health, Military, District Planning Commission, Environmental Protection, Israel Land, National Infrastructure, Civil Aviation and National Transport Authorities… and of course, the owner of the land.
With the Kibbutz agreement now secured, we are fine-tuning the well site layout and beginning preliminary plans for construction of the site.
The layout and construction of the well site is a project in of itself, as it involves the careful placement of storage containers, offices and living quarters, equipment and liquid storage facilities, power units, and piping all efficiently arranged around the drilling rig and large liquid containment (“mud”) pits while allowing adequate space for the safe movement of personnel and heavy equipment.
As the M-J #3 well site is near residential and commercial areas, we are working diligently with local and governmental groups, to ensure the site will meet (or in some cases exceed) all applicable environmental and safety requirements.
Actual well site construction can begin once we have received all necessary permits. Depending on weather and equipment availability, we anticipate site construction to be completed within one month after being started. Given the progress we are making in both planning and permitting for the M-J #3 well, we remain optimistic that drilling will begin this summer.”

Plans for the new Ma’anit-Joseph #3 well were initiated in April after production testing determined that commercial quantities of gas and oil were not present in Zion’s nearby Ma’anit-Rehoboth #2 well.

Zion Drilling Venture in Israel Signals New Era

Zion Oil & Gas, Inc. announced last week that it had signed a Memorandum of Understanding with Turkish drilling contractor Aladdin Middle East Ltd. to purchase AME’s 2,000 horsepower drilling rig (currently located at Zion’s Ma’anit-Rehoboth #2 wellsite, in Israel). The proposed new company, Zion Drilling, Inc. (a subsidiary of Zion Oil & Gas, Inc.), will own and operate the drilling rig in Israel.

What the new company will mean for Zion Oil & Gas is that they will no longer need to rely on third party drilling contractors on future exploration wells. What the new company will mean for the State of Israel, now experiencing a gas and oil exploration boom, is that a rig, twice the size as has ever operated onshore in Israel, will now be permanently ‘in-country’ and possibly available for other (besides Zion Oil & Gas) Israeli exploration efforts. And that the rig will be owned and controlled by a company solely invested on Israeli oil and gas exploration.

During Zion’s drilling of the Ma’anit #1 well in 2005 operations were frustrated by the rig contracted for project. The Israeli owned 1,000 horsepower Ideco Super 7-11 (at that time the biggest in the country) just wasn’t up to the task of drilling to Zion’s estimated 18,000 foot Permian depth. Fearing they would lose the hole due to mechanical problems, Zion stopped drilling the Ma’anit #1 at 15,842 feet. Although they tested several zones above 15,842, noen produced commercial quantities of oil or gas. The well was abandoned and Zion went on the hunt for a rig capable of drilling to a depth greater than 18,000 feet.

After a year of searching, they discovered a rig owned by Aladdin Middle East in Turkey. The rig required refurbishment and transport to Israel, but at 2,000 horsepower it had the mechanical ability to drill beyond 18,000 feet. Zion brought the rig to Israel in the spring of 2009 and immediately began drilling the Ma’anit-Rehoboth #2. In October of 2009 the AME rig was moved to Zion’s Asher license to begin the Elijah #3 well. Then in February of this year, Zion moved the rig back to the Ma’anit-Rehoboth #2 site to conduct completion testing. Zion’s next well, the Ma’anit-Joseph #3, will be in close proximity to the Ma’anit-Rehoboth #2.

Zion Drilling will purchase AME’s drilling rig for an initial payment of US$ 7 million and a series of US$ 1 million additional payments that are anticipated to coincide with our drilling seven additional wells in Israel over the next few years. As the funds for the purchase of the rig are to be provided by Zion Oil & Gas, our plans are subject to a number of events, including due diligence, the raising of additional capital and the establishment of Zion Drilling.

Zion currently has seven new exploration wells planned and the establishment of a new drilling subsidiary signals not only a long term stability and commitment in Zion’s exploration efforts, but a substantial move forward in Israel’s deep onshore exploration capability and security.

Zion CEO Richard Rinberg’s comment as he announced plans of the new drilling venture speaks not only for Zion’s intention for future oil and gas exploration but can reasonably express the nation of Israel’s oil and gas exploration future as well: “We have both the patience and the firm resolve… and now, we expect to soon have the right tool to finish the job – a 2,000 Horsepower drilling rig in Israel on a permanent basis.”

Zion Oil 2009 Annual Report

Zion Oil & Gas, Inc. filed is 2009 annual report with the SEC on March 16. Among the company’s operation plans for 2010 listed in the 104 page document are plan’s for a fourth well and another possible stock offering.

After CEO Richard Rinberg’s obligatory “Forward Looking Statements” statement (events that haven’t happened yet, haven’t happen and there’s no way of guaranteeing that they will happen, therefore statements about operational plans for the future are ‘forward looking’) the report states:

“As the Ma’anit-Rehoboth #2 well did not reach the Permian geological formation beneath the Joseph license area, we are currently planning to drill a subsequent well, to be named the “Ma’anit-Joseph #3 well”. The Ma’anit-Joseph #3 well is currently anticipated to be drilled in the vicinity of the Ma’anit-Rehoboth #2 well in order to try and reach the Permian target.“

“We believe that our currently available cash resources will be sufficient to finance our plan of operations, as described, through the end of 2010, including the drilling of the planned Ma’anit-Joseph #3 well. To carry out further drilling and maintain operations as presently conducted, we will need to raise additional funds.”

“In order to support our operations and drilling program beyond fiscal year 2010, on January 28, 2010, we filed with the SEC a registration statement on Form S-3 for a shelf offering. As of the filing of this annual report on Form 10-K, the registration statement has not been declared effective. When declared effective by the SEC, Zion will have the option to offer and sell, from time to time in one or more offerings, up to $50 million of common stock, debt securities, warrants to purchase any of these securities, or any combination of such securities. The securities may be offered in one or more offerings, and at prices subject to prevailing market conditions to be set forth in a supplemental prospectus filing with the SEC at the time of such offering, should such an offering occur. We do not currently have any commitments to sell securities.”

A copy of Zion Oil’s complete 2009 Annual Report can be downloaded by clicking here: Zion Oil 2009 Annual Report