Zion Oil Gas ZN Stock News

Zion Oil & Gas, Inc. (NASDAQ: ZN) is climbing in the market this morning, trading on gains of around 12% early on. The gains come after the company announced that it has entered into a partially binding letter of intent to purchase a drilling rig. Moreover, the company has formed two wholly owned subsidiaries. Here’s what’s going on:

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ZN Stock Pops On News

In the release, the company first outlined its plans to acquire a drilling rig. So far, the company has entered into a partially binding letter of intent to purchase the rig, a drill pipe, and all related equipment for important into Israel. The purchase comes with the goal of continuing the company’s exploration plans.

ZN said that the rig is a 1600 HP AC Top Drive that’s equipped with a twin 1600 HP mud pump system. The rig comes with a depth capacity of 20,000 ft. Moreover, it is equipped with 15,000 ft of heavy 5″ drill pipe and associated well control equipment.

The company said that the rig has underwent full CAT III & IV certification in late 2017. This reassures the quality of the rig and associated equipment. Since certification, the rig has drilled two wells.

In the release, ZN said it and the seller will immediately begin the negotiation of a definitive purchase agreement. It is expected that the rig will come with a purchase price of $5.6 million. Moreover, the purchase will be an all-cash transaction, for which, Zion said no financing will be requred.

New Subsidiaries

Along with the announcement of the plans to purchase a rig, ZN also announced that it has launched two new wholly-owned subsidiaries. These include Zion Drilling, Inc. and Zion Drilling Services, Inc.

Zion Drilling was created for the purpose of owning the rig and related equipment. Zion Drilling Services was created in order to act as the contractor that provides drilling services.

Moreover, Zion Drilling Services may contract with other operators in Israel to provide drilling services at market rates when the new rig is not being used for the company’s own exploration activities.

In a statement, Robert Dunn, COO at ZN, had the following to offer:

We have signed a letter of intent to purchase a drilling rig for Zion’s ongoing 2020 exploration plans. This rig will have increased capabilities for onshore drilling in Israel, and we see it as a vital part of our operations going forward.

The above statement was followed up by Bill Avery, President at ZN, had the following to offer:

We were fortunate to find this rig and believe it is an ideal fit for our plans. We are thankful for our shareholders’ ongoing support which will enable us to close the purchase of the rig with immediately available cash at closing.

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2 COMMENTS

  1. zn is about to repeat history.1966 asmerea oil was .25c explosled to 41.00 when it hit oil.thank me with acouple thousand shares now . buy 4m callme to make you the first trillionaire.

    • I remember receiving emails and information about this company 10-15 years ago. It’s a good thing I didn’t invest then as they have went form nearly $15 a share to $0.15 a share. I have not been following them to know why this has happened.

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