Zion Oil & Gas set to drill in northern Israel

DALLAS and CAESAREA, Israel -- Zion Oil & Gas has met and complied with two key conditions set by Israel’s Petroleum Commissioner, enabling it to move toward drilling its next deep oil well, about 40 km south of the Sea of Galilee, where the Jordan and Jezreel Valleys meet.

“We are excited to have successfully negotiated a drilling contract with DAFORA S.R.L. as well as completing and submitting our drilling engineering plan,” said Victor G. Carrillo, Zion’s CEO. “Reaching these two milestones, combined with signing agreements with both Kibbutz Sde Eliyahu on whose property the drill pad will be situated, and the Israel Land Authority to access and utilize the drill site, allows us to start drill pad construction soon.”

Zion’s drilling contract is with S.C. Daflog S.R.L., the Israeli-registered entity of and related party of DAFORA, a Romanian company.

“Given that DAFORA has drilled over 1,000 wells in Romania, Eastern Europe and East Africa, we are confident they are the right partner for our Megiddo-Jezreel #1 well in Israel,” Zion’s President, Dustin Guinn, said. “Zion will use DAFORA’s F-400 drilling rig, currently stored in Israel, to drill to about 4,500 m.”

“We plan to award the drill site construction contract as soon as our outside engineering firm finalizes our site plan to accommodate DAFORA’s F-400 rig,” said Carrillo. “Assuming no further weather or regulatory delays, drill site construction should begin in November and take no longer than about 60 days to finish.”

The company’s final step before spudding the well is to submit the drill site plan along with its application to drill to the Israeli government for final approval.

The drilling program is dependent on the company raising significant additional capital, Zion said.