Zion Oil finds 9 productive zones in Israel
CAESAREA, Israel, April 5 (UPI) -- Zion Oil & Gas, the company founded on the basis of a divine revelation of oil in Israel, has encountered nine zones it believes will be productive, officials said Wednesday.
"Despite what you have heard, Ma'anit (Zion's first exploratory well) is a success," Zion Executive Vice President Glen Perry told reporters.
Perry, holding up what looked like a shiny black rock, explained the company had several indications it had found hydrocarbons, which can be either oil or natural gas.
A viable prospect has several characteristics, Perry said: the presence of a source rock called a "kitchen," where oil is generated and "cooked" into a hydrocarbon; a migration path by which the hydrocarbons can move closer to the surface to a structure with enough holes, or porosity, to hold the oil and gas; and a seal to keep the oil and gas from getting all the way to the surface.
The Ma'anit #1 well, which the company drilled from April to November 2005, exhibits all of these characteristics, Perry said.
In addition, Perry said there was "constant gas coming out of the well between the depths of 3,700 meters and 4,700 meters." The rock he held up was actually a solid substance similar to bitumen. Zion encountered a significant amount of this substance as drilling progressed in the well, which is located several kilometers inland from the Mediterranean coast, between the cities of Tel Aviv and Haifa, Perry said.
"Upon analysis that breaks down the components (of the bitumen-like substance), we found that it is composed primarily of very light oil," Perry said.
The substance is similar to ones used to make natural gasoline and kerosene. In other words, a find would be marketable.
The Ma'anit #1 well is also the highest well in northern Israel, Perry said.
"That means that it's the easiest one to get to ... shallow and full of hydrocarbons."
However, the company declined to answer questions about how big an oil and gas find it may have on its hands. Because Zion has filed for an initial public offering with the U.S. Securities and Exchange Commission, the rules governing the information it discloses are strict.
"The SEC has very stringent regulations on this," Philip Mandelker, Zion's general counsel and secretary, told United Press International. Mandelker said Zion must meet several conditions before it can make internal projections about reserves available to the public.
If the mood of the company's chairman and founder is any indication, though, the projections are good.
"There is a number (quantifying how much oil the company thinks it will find), and when I see that number, I want to tell it to the world," John M. Brown told UPI.
In a 2004 article in the Oil & Gas Journal, geologist Stephen Pierce wrote about the prospects for Zion's license, concluding: "Zion has a strong probability of making a significant discovery of some 484 million barrels of oil."
Israel depends on fossil fuels for much of its energy needs. It imports all of its oil and in 2003 bought 270,000 barrels per day, according to the U.S. Energy Department's Energy Information Administration.
At the time of his assessment, Pierce was not affiliated with the company, and the assessment was his own. Since then, Pierce, also an evangelical Christian, has served as a consulting geologist for Zion.
In light of predictions like that, Brown expressed disappointment at the lack of black geysers.
"I expected the oil to be flowing -- thousands of barrels of it ... while I understand what (Perry) and the scientists are saying, it's still not flowing," Brown said.
"Success is when oil's flowing out and helping Israel, and anything less is unacceptable," Brown said.
After all, you can't quit after a 25-year spiritual journey like Brown's. A Michigan native, he had no prior experience in the oil and gas industry. Soon after he became a born-again Christian, he believes God spoke to him, guiding him to several Bible verses that many evangelical Christians believe to be a "biblical treasure map" to oil in the Holy Land. After that, he moved to the other Holy Land for oil -- Texas -- and began his quest.
"I thought scripture was all the basis I ever needed, but that's not the way things are done in business," Brown said.
He consulted pastors and rabbis to check his interpretation of the text, and geologists and industry experts to check the science.
All along the way, Brown said, there have been skeptics. There is a joke in Israel that when the ancient Hebrews escaped slavery in Egypt, they made a wrong turn and ended up in one of the only countries in the Middle East without oil reserves.
In fact, Zion Executive Vice President Perry was one of Brown's biggest skeptics at first, Brown said. Perry had worked at Israeli energy company Delek, and he based his skepticism on geological and seismic information he'd seen for northern Israel. The conventional wisdom was always that even if there was oil in Israel, it wasn't where Brown wanted to look.
Brown's mounting evidence won Perry over, Brown said.
"We see every element (of a find at Ma'anit)," Perry said. "Our results have been so good, we have selected the site for a second well and will drill it as expeditiously as possible."
Drilling the second well is intended to confirm the findings of Ma'anit #1 and give the company a clearer picture of the geological structure, Perry said.
In all, the company plans to complete three wells: two new ones and the rest of Ma'anit #1. Brown said Ma'anit #1 needs an additional $800,000 to $1 million to make it a commercial well. The purpose of Zion's upcoming IPO, expected for the end of April or the beginning of May, is to raise the money to accomplish this.
Mandelker said the company already has investors from all over the world, including the United States, Israel, England, France, Canada and South America. Brown isn't worried about attracting financial support, either. He cited the 60 million to 70 million evangelical Christians in the United States, who have shown continued interest in the project.
"We've gotten calls, letters and e-mails telling us not to give up," Brown said.
He added that some people have even sent donations in the mail -- everything from a $5 bill from a supporter on Social Security to a check for thousands of dollars.
"They said, 'We don't want to buy anything, we just want to help,'" Brown said. Because the company can't legally use this money, Brown said, they set up a charity fund with the donations.
And while Brown had been disappointed at the setbacks, he said he is back to feeling optimistic.
"We're gonna have a real party when the oil comes," Brown said.
He is determined to make this happen by the end of the year.
"I wish it would happen tomorrow," Brown said.
"Despite what you have heard, Ma'anit (Zion's first exploratory well) is a success," Zion Executive Vice President Glen Perry told reporters.
Perry, holding up what looked like a shiny black rock, explained the company had several indications it had found hydrocarbons, which can be either oil or natural gas.
A viable prospect has several characteristics, Perry said: the presence of a source rock called a "kitchen," where oil is generated and "cooked" into a hydrocarbon; a migration path by which the hydrocarbons can move closer to the surface to a structure with enough holes, or porosity, to hold the oil and gas; and a seal to keep the oil and gas from getting all the way to the surface.
The Ma'anit #1 well, which the company drilled from April to November 2005, exhibits all of these characteristics, Perry said.
In addition, Perry said there was "constant gas coming out of the well between the depths of 3,700 meters and 4,700 meters." The rock he held up was actually a solid substance similar to bitumen. Zion encountered a significant amount of this substance as drilling progressed in the well, which is located several kilometers inland from the Mediterranean coast, between the cities of Tel Aviv and Haifa, Perry said.
"Upon analysis that breaks down the components (of the bitumen-like substance), we found that it is composed primarily of very light oil," Perry said.
The substance is similar to ones used to make natural gasoline and kerosene. In other words, a find would be marketable.
The Ma'anit #1 well is also the highest well in northern Israel, Perry said.
"That means that it's the easiest one to get to ... shallow and full of hydrocarbons."
However, the company declined to answer questions about how big an oil and gas find it may have on its hands. Because Zion has filed for an initial public offering with the U.S. Securities and Exchange Commission, the rules governing the information it discloses are strict.
"The SEC has very stringent regulations on this," Philip Mandelker, Zion's general counsel and secretary, told United Press International. Mandelker said Zion must meet several conditions before it can make internal projections about reserves available to the public.
If the mood of the company's chairman and founder is any indication, though, the projections are good.
"There is a number (quantifying how much oil the company thinks it will find), and when I see that number, I want to tell it to the world," John M. Brown told UPI.
In a 2004 article in the Oil & Gas Journal, geologist Stephen Pierce wrote about the prospects for Zion's license, concluding: "Zion has a strong probability of making a significant discovery of some 484 million barrels of oil."
Israel depends on fossil fuels for much of its energy needs. It imports all of its oil and in 2003 bought 270,000 barrels per day, according to the U.S. Energy Department's Energy Information Administration.
At the time of his assessment, Pierce was not affiliated with the company, and the assessment was his own. Since then, Pierce, also an evangelical Christian, has served as a consulting geologist for Zion.
In light of predictions like that, Brown expressed disappointment at the lack of black geysers.
"I expected the oil to be flowing -- thousands of barrels of it ... while I understand what (Perry) and the scientists are saying, it's still not flowing," Brown said.
"Success is when oil's flowing out and helping Israel, and anything less is unacceptable," Brown said.
After all, you can't quit after a 25-year spiritual journey like Brown's. A Michigan native, he had no prior experience in the oil and gas industry. Soon after he became a born-again Christian, he believes God spoke to him, guiding him to several Bible verses that many evangelical Christians believe to be a "biblical treasure map" to oil in the Holy Land. After that, he moved to the other Holy Land for oil -- Texas -- and began his quest.
"I thought scripture was all the basis I ever needed, but that's not the way things are done in business," Brown said.
He consulted pastors and rabbis to check his interpretation of the text, and geologists and industry experts to check the science.
All along the way, Brown said, there have been skeptics. There is a joke in Israel that when the ancient Hebrews escaped slavery in Egypt, they made a wrong turn and ended up in one of the only countries in the Middle East without oil reserves.
In fact, Zion Executive Vice President Perry was one of Brown's biggest skeptics at first, Brown said. Perry had worked at Israeli energy company Delek, and he based his skepticism on geological and seismic information he'd seen for northern Israel. The conventional wisdom was always that even if there was oil in Israel, it wasn't where Brown wanted to look.
Brown's mounting evidence won Perry over, Brown said.
"We see every element (of a find at Ma'anit)," Perry said. "Our results have been so good, we have selected the site for a second well and will drill it as expeditiously as possible."
Drilling the second well is intended to confirm the findings of Ma'anit #1 and give the company a clearer picture of the geological structure, Perry said.
In all, the company plans to complete three wells: two new ones and the rest of Ma'anit #1. Brown said Ma'anit #1 needs an additional $800,000 to $1 million to make it a commercial well. The purpose of Zion's upcoming IPO, expected for the end of April or the beginning of May, is to raise the money to accomplish this.
Mandelker said the company already has investors from all over the world, including the United States, Israel, England, France, Canada and South America. Brown isn't worried about attracting financial support, either. He cited the 60 million to 70 million evangelical Christians in the United States, who have shown continued interest in the project.
"We've gotten calls, letters and e-mails telling us not to give up," Brown said.
He added that some people have even sent donations in the mail -- everything from a $5 bill from a supporter on Social Security to a check for thousands of dollars.
"They said, 'We don't want to buy anything, we just want to help,'" Brown said. Because the company can't legally use this money, Brown said, they set up a charity fund with the donations.
And while Brown had been disappointed at the setbacks, he said he is back to feeling optimistic.
"We're gonna have a real party when the oil comes," Brown said.
He is determined to make this happen by the end of the year.
"I wish it would happen tomorrow," Brown said.
posted by Marko at 4/05/2006 09:29:00 AM
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