Signs of oil and gas reported by Zion Oil & Gas Inc. (Nasdaq:ZN) in its Jezreel Valley drilling has almost doubled the Israeli company's market cap in trading, after the increase reached as high as 110%. The share price rose a further 11% yesterday, following a day of volatile trading, bringing Zion Oil's market cap to $230 million.
The company reported finding signs of oil and gas in its Megiddo-Jezreel 1 well, a project that it has been working on for many years. Zion Oil president Dustin Guinn expressed "cautious optimism," which he said took into account the quantity of gas accumulated in the well at a depth of 5,000 meters. "We experienced a significant and continuous increase in signs of oil," he said, adding that following the signs that had been discovered, the company had decided to deepen its drilling by an additional 70 meters.
Zion Oil CEO Victor Carrillo stated that he was "enthusiastic about seeing clear signs of hydrocarbons (oil and gas, A.L.) in the deep part of the drilling," but added that at this stage, the company could not comment on its ability to make the finding commercial or to produce oil and gas from it. Carrillo said, "We asked our shareholders to continue praying for a safe and successful drilling, logging (documentation, A.L.), and operational testing, and for God's wisdom in management when we are making fateful decisions in the coming weeks and months."
Zion Oil was founded early in the millennium by John Brown in order to help rebuild Israel by finding and producing oil and gas. According to the company's statement on its website, it was "drilling for Israel's political and economic independence." In accordance with the beliefs of the company's heads and those interested in it, mainly from the Christian evangelist community in the US, it is trying to find oil and gas in the holy land using signs from the Bible, and its main current activity is in the Jezreel Valley area.
Despite the recent optimistic signs from the company, investing in Zion Oil's shares can be described as a high-risk investment, because the company has never produced oil, and it cannot ruled out that it will never do so in the future. Meanwhile, the risk in Zion Oil's business and the absence of concrete results are not breaking the spirit of Brown and the community that supports him, which sees Zion Oil's activity as something much bigger than a financial investment. The vision of Brown and his supporters has not yet materialized, but its recent announcement, the company is asking investors to wait patiently, and promises to inform them later about the latest findings.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 15, 2018
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