By The case for investing in Zion Oil & Gas (ZNOG)
Volatility is seen when facts have been established.
In the case of Zion Oil & Gas the history is well known. The Zion Oil & Gas stock dropped off of the NASDAQ to Over the Counter Trading (OTC) following the disappointments of Zion’s MJ01 Well in Israel.
Given the share price from ticker: ZN, the stock price sunk to around 10 cents, transitioning to OTC (ticker symbol: ZNOG).
At this stage in testing of the MJ02 Well – with the backing of 3D data and deeper drilling – it thus follows there is more upside to the stock price to come.
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Zion Oil & Gas also have plans to drill another Well in Israel.
Zion had made their plans known prior to the commencement of the current MJ02 testing program, which should be completed within the next few weeks.
Therefore, Zion Oil & Gas is more than just a mere trading stock.
If you value long-term plans and can overlook the lengthy process which has taken some 20 years to get to this stage, you can invest in the value of the future Zion has in store; albeit an unknown one.
One cannot say that Zion Oil & Gas will never discover Oil and Gas if oil does in fact exist.
And if Zion Oil & Gas do succeed in discovering oil and can bring to reality oil production then it is more likely that they will if the target zones are rich in hydrocarbons.
If you disagree, then how much would you bet against Zion Oil & Gas discovering oil in your short trade?
You know as well as I do that you would need a guaranteed stop loss in case you call it wrong. Because an ounce of good news will likely cost you dearly in your bet against this sleeping giant.
The business is viable if Zion Oil & Gas can continue its work and raise the funds it needs to prove the concept: that there is oil in Israel and oil in abundance.
It’s too simplistic to out rule there not being oil in Israel; oil enough for Zion to put a well into production.
Oil Wells in Israel have been made commercial and produced oil, albeit not in large quantities. However it does not follow that there is not much more oil that can be produced indeed if that oil exists.
Zion Oil & Gas withdrew from NASDAQ: ZN following the court case; which was ruled in Zion’s favour.
Zion wanted to concentrate on its future plans and didn’t want to be bogged down with the necessary costly and time consuming reporting required as a NASDAQ listed company.
The bottom line is that Zion Oil & Gas is an onshore oil and gas exploration company. Oil has been discovered in Israel though to date not much.
However on the other hand, huge reserves of gas has been discovered offshore and not too far west of Zion’s drill site. And more rigs are planned to meet the demand of gas supply.
There is oil in the south west from Zion’s MJ02 Well and a discovery not too far north was discovered some years ago in the Golan.
The Zion Oil and Gas site is on the levant fault system, is close to both the Dead Sea and the Jordan river.
It is believed that there is much oil under the Dead Sea and indeed there is a company having interests in drilling for oil there.
Just because Zion Oil & Gas have been on a long journey, it does not mean that there is no oil in Israel and that Zion will not discover oil.
Clearly the signs point to oil but pinpointing the right location is what the journey has been about.
The 3D data had lead to Zion Oil & Gas to obtain a drill that could reach the current multiple zones of interest Zion is currently testing.
Clearly some big investors still believe in Zion, enough to put up millions of dollars into the project.
And a lack of news and a low stock price serves big investors interests.
The underlying fundamentals of the business will come together when Zion Oil & Gas releases a PR.
It is of course hoped that Zion Oil & Gas will report hat testing has been completed and oil has been discovered; and the flow rates and pressure are good enough to produce commercial oil.
Whether the journey turns out well with MJ02 remains to be seen.
What is clear is that people still believe that there is oil in Israel and that Zion Oil & Gas can and will discover it eventually.
In this respect, Zion Oil & Gas should be able to continue exploring for oil for many years to come.
The best outcome is that Zion Oil & Gas can produce oil from MJ02 and go on to explore for more oil in other Wells.
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