Drilling Complete on Ma’anit-Rehoboth #2
September 18, 2009 by admin
Zion Oil CEO Richard Rinberg announced to shareholders today in his weekly drilling update that drilling of the Ma’anit-Rehoboth #2 well has been completed at 17,913 feet; 131 feet short of its intended target depth. From company reports, it still isn’t clear whether or not the bottom of the Ma’anit-Rehoboth #2 is in an upper Permian or lower Triassic stratum.
Rinberg stated that, “There were a number of factors that influenced our decision not to drill deeper.” But the only factor he gave stockholders was the increased risk of loosing the well from a cave-in due to a long section of ‘open hole’ (uncased) at the bottom of the well. Given the fact that the distance between the drill bit and the motor was nearly 3.4 miles, losing the well due to a cave-in or other catastrophic failure is a very real concern. Whatever the other factors influencing the decision to stop drilling were, they weren’t stated by Rinberg – so we’ll have to leave any other reasons to speculation.
Speculation, however, is something Zion’s managers can’t do – at least not publicly. Because the company is publicly held and in the process of another stock offering, SEC regulations prohibit Zion’s management from any form of public ‘speculation’ that could be construed as an attempt to paint a picture of the company’s future prospects in way that might not be a 100% factual projection at the moment. The SEC calls these “Forward Looking Statements”. That means Zion’s management is pretty much limited to telling us what they ‘know’ they’ve got in the Ma’anit-Rehoboth #2 well and not what they ‘think’ they’ve got. Which, at this point, doesn’t make for much news.
So if you’re going to draw conclusions, you can draw some of them from what’s not said :
- The Ma’anit Rehoboth #2 isn’t a gusher (“Gusher” is an old term for a self pressurized free-flowing oil well). If oil was flowing out of the top of the well, it would be a fact, not a “Forward Looking Statement.” Zion shareholders (and the rest of the world) would know about it.
- There’s no definite agreement as to whether or not the bottom of the Ma’anit-Rehoboth #2 is in the Permian.
- The Ma’anit Rehoboth #2 hasn’t suffered any sort of catastrophic failure. As sparing as Zion’s management has been with potential good news, to their credit, they’ve always been forthcoming in reporting any bad news. If any sort of trend can be discerned, as far as Zion is concerned, no news is more likely good news than bad … or simply, no news.
- If you follow the general energy exploration news coming out of Israel as closely as I do (that’s pretty close), then you may have discerned by now that Israel is in the beginnings of an energy ‘gold -rush’. The HUGE natural gas discovery off the Haifa coast has insured Israel’s energy (gas and electric) needs in the foreseeable future. Givot Olam has reported, and the state of Israel has accepted, that they have nearly a billion barrels of oil under the ground just south of Zion’s license area; they just haven’t been able to get it to the surface yet (by the way – they’re drilling as I write). Oil discoveries in the Dead Sea region (not huge, but there) are being reported and same companies involved in the off shore discovery are now buying into the Dead Sea exploration. Translation: Oil and gas discoveries in Israel aren’t a future possibility, they’re a present reality.
Now let’s draw some conclusions from what has been said:
- The Ma’anit-Rehoboth #2 well is at 17,913 feet (2071 feet deeper than the Ma’anit #1).
- Their are “seven zones that warrant completion testing” (I can’t locate documentation, but I believe there were three to five “zones that warranted testing” in the Ma’anit #1).
- What’s been concluded is the “drilling phase”. The determination as to whether or not the well will produce commercial hydrocarbons comes in the “completion phase.”
- The rig will soon be moved to the next drilling site, at the ‘foot of Asher.’ Zion Oil & Gas is a professional oil exploration company with multiple leases and multiple drilling prospects in the nation of Israel. Zion Oil is not a ‘one hole wildcatter.’ There is absolutely no reason to give up on the Ma’anit-Rehoboth #2 at this point, the well hasn’t even been tested yet. But regardless of how much or how little oil and/or gas the Ma’anit-Rehoboth #2 produces, Zion will continue drilling for oil and gas in northern Israel.
Now let’s look at the big picture:
- Zion Oil owns most of the exploration license area in northern Israel – 327,000 acres.
- The Ma’anit-Rehoboth #2 is among the deepest wells ever drilled, in one of the most promising locations, drilled with the best equipment, manned by the most adept crew, tested with the most sophisticated equipment that onshore Israel has ever seen. That’s not hyperbole, it’s fact.
- Geology and recent experience have proven – natural gas and oil lie beneath the land (and offshore) of Israel.
- If you want big picture, here’s the biggest – Zion Oil, Noble Energy, Delek, Givot Olam and the rest didn’t promise Israel’s children “The blessings of the deep that lies beneath.” Israel’s God did (Genesis 49:25). From where I sit, it looks like He’s keeping His promise. We’ll find out more about the Ma’anit-Rehoboth specifically as Zion begins their “completion phase”.
- Just as a reminder, I’ve dug up a photo taken at the Ma’anit #1 in 2005. That’s a hydrocarbon flare from the well – it’s down there.
Keep the faith.