Israel has awarded Zion Oil and Gas Inc. another license covering about 75,000 acres, the US land exploration company recently announced.
Megiddo Valleys License 434 allows Zion to begin recovery operations on the Megiddo-Jezreel 1 (MJ-01) well. “Zion is deploying new technologies, focusing on new stimulation methods for MJ-01 and aiming to unlock hydrocarbon flows in several key identified zones,” the company said in a press release that announced the license, adding that it has already secured contractors for services and ancillary elements and expects operations to begin in the fourth quarter.
The license covers the same area as the New Megiddo license 428, which expired on February 1 after multiple extensions from an initial six-month term granted in December 2020. The application for a new license had been delayed by the political crisis in Israel that saw the Middle East. The country has been going through three parliamentary elections since March 2020, according to a Zion press release on January 31.
In that announcement, he said, referring to the Megiddo-Jezreel 1 well, “During the review process by the newly formed Israeli administration, we plan to keep our I-35 drilling rig and related components in place platform and perform the necessary maintenance, platform engineering, and design for the intended re-entry.”
The award of the Megiddo Valleys 434 license comes despite Zion raising “substantial doubt” in its latest results about its ability to continue, citing “a history of operating losses and negative cash flows from operations.”
“We currently have no income-generating operations,” he said in his quarterly filing with the US Securities and Exchange Commission on Aug. 10. Zion reported a net loss of $4.473 billion for the first half of the year, while its cash and equivalents stood at $518,000. and its working capital amounted to $362,000 on June 30.
“We expect to incur significant additional expenditures to advance our exploration and development programs. Although we raised approximately $921,000 during the period from July 1, 2023 to August 8, 2023, we will need to raise additional funds to continue our exploration and development activities. in our license area,” the regulatory disclosure stated.
Zion said in the filing that its cash balance would only be enough to see the company through August 2023 in terms of financing operations.
The new license runs for three years through September 2026 “with the option of four 1-year extensions for a total of seven full years through September 13, 2030,” Zion said.
“This license is an important endorsement by the State of Israel and affirms our longstanding commitment to unlocking Israel’s onshore energy potential,” CEO Rob Dunn said in a statement.
This is Zion’s seventh license in its 23 years as a company, which is listed on the US OTCQX exchange, where it is headquartered in Dallas, Texas, but operates in Israel.
“This is not an extension, but a new license spanning seven years, providing plenty of time for further exploration and development,” Zion Israel Branch vice president and general manager said in an earlier May 18 press release .
Zion conducts the exploration using its own drilling rig. In 2020, it incorporated two wholly-owned subsidiaries, one for the drilling property and the other for the management of drilling contracts.
To contact the author, please email jov.onsat@rigzone.com
