Zion Oil & Gaza (NASDAQ: ZN), a Texas-based company, has announced that it has spud [started to drill] the Megiddo-Jezreel #1, a deep, on-shore well located in Israel’s Jezreel Valley, near Beit Sh'ean.
"We anticipate drilling through at least four different geologic strata with oil and gas potential,” stated Victor G. Carrillo, Zion’s CEO. “It has been a complicated and difficult multi-year journey to get to this point, but our entire team is very excited to see this project finally come to fruition."
The company proudly states that it has been divinely blessed to have merited the privilege of "drilling for Israel's political and economic independence." Its website states that it is inspired by Genesis 49,25-26 and Deuteronomy 33,13-16. These verses speak of the physical and geographic blessings given to Joseph, son of the Patriarch Jacob – whose inheritance in the Land of Israel lies largely in the Jezreel Valley.
Zion is contracting with world class service providers such as Halliburton, Baker Hughes, and Weatherford, highlighted by DAFORA’s F-400 drilling rig. The rig has a 3,000 HP capacity drawworks, capable of drilling to over seven kilometers - more than sufficient horsepower and safety factor to drill the planned well with a target depth of up to 4.5 km (approx. 15,000 feet).
Dustin Guinn, Zion’s President and Chief Operating Officer, said, “The process to finally be able to start drilling has been met with obstacles and patience-testing trials, but we … are extremely proud of the work that has been done and look forward to a successful well. We are thankful to our shareholders and supporters for their faithfulness to stand with us during these last few years.”
In 2015, an independent study by the international consulting company Beicip-Franlab, concluded that up to 6.6 billion barrels of oil (in-place best estimate) remain to be found in the offshore portion of Israel’s Levant Basin. Zion’s Megiddo-Jezreel License area, though onshore, is entirely within the Levant Basin and is well positioned to encounter the key geologic ingredients of an active petroleum system.
Zion is cautiously hopeful that "multiple wells could be drilled from this pad site, as several subsurface geologic targets can be reached using directional trajectories for subsequent wells."
Zion notes ten reasons why a domestic supply of oil in Israel is a vitally important resource to protect Israel’s strategic and financial security. Among them is the freedom Israel would enjoy from international pressure, as well as the end of Israel's need to rely on unreliable oil sources. Throughout 2015 and 2016, for example, most of Israel’s oil was supplied from the volatile Kurdish region.
Israel currently produces only a couple thousand barrels of oil a day, Zion reports, meaning that it relies on the global market for more than 99% of its consumption.
Israel’s proven oil reserves are at 11.5 million barrels, and 10.1 trillion cubic feet of gas. While neither figure places Israel in the top 40 globally, these totals are significantly higher than they were a few years ago.