By Is Zion Oil & Gas Planning to sell the company?
On 01 August 2022 Zion Oil & Gas released an update.
They wrote they received a license extension for there 99,000-acre Megiddo-Jezreel License for six months, from August 2, 2022, to February 2, 2023.
However, Zion Oil & Gas CEO, Rob Dunn wrote more about their newly appointed independent Director, Mr. Frank F. Starr II, than about their plans moving forward in relation to the license extension.
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I listened to Mr Starr talking a little bit about his background in a video filmed in 2019. Entrepreneur Frank Starr, Part 1 on Vimeo
In it he says he forms companies and helps to form companies, brings cashflows under control then sells the companies.
Naturally being the suspicious character I am, I jumped to the conclusion that Zion Oil & Gas plan to sell on the company.
But for a company to be sold Zion needs a buyer and there has to be Oil or at least signs of Oil for an profitable acquisition.
Is Zion Oil & Gas Planning to sell the company?
Yes I think they are.
My reasoning for this is that if Zion have discovered a lot of Oil, they are not experienced enough to develop Oil Wells for commercial production.
John Brown is not getting any younger and I get the impression that CEO Dunn wants to move on.
Another major sign is the permit Zion Oil & Gas seek to drill another Well.
It’s a strong indicator that after encountering Oil from their MJ02 Well, they moved to secure another Well.
But Zion Oil & Gas have not informed the market in relation to any Oil encounter. Though the ZNOG share price did rise to around 38 cents when I believe Zion had encountered Oil.
Of course Zion Oil and Gas would need to negotiate terms with the land owner/s and they wouldn’t want to declare an Oil encounter from MJ02 before receiving a permit to drill a new Well so as to receive the best deal.
With a new Oil Well permit in place, Zion can announce Oil discovery news – Oil production news.
Given Zion Oil & Gas is new to drilling and has no experience related to commercial Oil Production, it makes sense to sell the company.
To obtain the best price for the BOD and shareholders, Zion Oil & Gas would need to show the Oil.
When would Zion sell the company?
It could be in 2022 0r early 2023.
It’s also possible Zion Oil & Gas could sell off the Oil production side of the business, but continue to drill.
To get the best price for the Zion Oil & Gas company, there would need to be a sizable rerate.
This must be based on proven reserves or at the very least, high production testing numbers.
There are a number of possibilities that could take place. For instance involving; the 800 million new shares; a reverse split; a relisting on the NASDAQ.
Shareholders stand to gain a lot of profit if Zion Oil & Gas sell the company before applying for a commercial license after declaring an Oil discovery.
Speculation is thus likely to explode. But the Zion Oil & Gas CEO told investors not to speculate.
I would expect to see news of Oil discovery and Oil production testing numbers in November 2022 after Zion Oil & Gas receives its new drilling license.
Is this a good time to buy ZNOG share in Zion Oil & Gas?
Based on the above, if I’m correct then I think it is.
With the share price currently trading at 23 cents, I major sell off of the company based on an Oil discovery will likely send the share price to rocket wildly.
I suspect Zion Oil & Gas will use the 800 million new shares to control the rise of the share price and prevent it from exploding. And this will thus fit in well with the transition on to the NASDAQ at a later stage.
At the end of the day, Mr Starr is a Entrepreneur who understands the Oil business having been educated in this field.
In my view, the time to invest in Zion Oil & Gas is now before the share price goes to the moon!
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