Thursday June 25, Zion Oil COO Glen Perry wrote that Zion’s Ma’anit Rehoboth #2 well had reached a depth of 15,750 feet. This is 200 feet beyond the final depth of Zion’s 2005 Ma’anit #1 well.
Why is this important? Zion oil has two targets for the current drilling program. The first was at 15,400 feet, into the early Triassic, where, based on what they’ve already experienced with the Ma’anit #1, they know that, “Based on its analysis, Zion believes that there are prospective hydrocarbon bearing intervals at depths between 12,500 feet and 18,000 feet and that, if successful, the primary hydrocarbons will be natural gas and condensate, with the possibility of oil.”
In the Ma’anit #1: “Drilling breaks and shows of hydrocarbons were recorded from 12,000 to the total depth of 15,500 feet.”
The Ma’anit Rehoboth #2 well is now below the final depth of the Ma’anit #1, in the same hole as the Ma’anit #1, but directionally aimed at a better target than the Ma’anit #1, based on their findings at the Ma’anit #1 – “Drilling breaks and shows of hydrocarbons were recorded from 12,000 to the total depth of 15,500 feet.”
Get where I’m coming from yet?
Do you really think that Zion hasn’t found “Drilling breaks and shows of hydrocarbons …”? Unlikely.
So why no news from Zion Oil?
Richard Rindberg explains in last week’s letter to shareholders.
“Recently, we received an email from a shareholder who commented that he was disappointed that we have not released any information regarding whether we have had ‘showings’ of hydrocarbons or ‘drilling breaks’ during our current drilling. He asked: ‘Why all the secrecy?’
It is correct that we have refrained from releasing ‘raw data’ (and will continue to do so) because we will not release information until it has been properly and professionally evaluated and confirmed.
When we drilled the Ma’anit #1 well, we posted daily drilling reports, but as our stock is now publicly traded, we cannot make such information available without proper review. This would be a daily burden on management time and add a large extra cost for external consulting and the required public filings.
In previous emails, we noted that the procedure is first to drill and then to ‘appraise and evaluate’ using electrical wireline well logs.
We plan to finish the intermediate drilling phase soon and then to log the well. We will be using some state-of-the-art Baker Atlas logging equipment, including some of the following:
Caliper Log, Compensated Neutron Log, Compensated Densilog, Gamma Ray Log, High Definition Induction Log, Formation Resistivity Imager (STAR), Circumferential Borehole Imaging Log (CIBL) and the Hexagonal Diplog.
To the ordinary person, it may read like scientific gobbledygook, but it will help us to determine an accurate evaluation of the well.
Thank you for your patience and you can be sure that when we do release information, it will be as correct as we can possibly make it.”
Zion Oil is in a far better position, with more advanced technology and expertise to “properly evaluate the well” than they were with the Ma’anit #1 in 2005. But this time, the company’s public status prevents them from giving blow-by-blow daily logs. In the long run, that’s a good thing. Their analysis, when it is made public, will be more accurate and indicative, not only of what they’ve got in the well, but also of what they can get out of it.