DALLAS and CAESAREA, Israel, March 18, 2020 /PRNewswire/ -- Zion Oil & Gas, Inc. (Nasdaq: ZN) announces they (i) entered into a Purchase and Sale Agreement on March 12, 2020, for a drilling rig, drill pipe, and related equipment for $5.6 million in cash, and (ii) closed that purchase on March 12, 2020, the same day, by Bill of Sale from the seller to Zion.
On March 13, 2020, Zion paid the seller $4.6 million in cash and remitted the remaining $1.0 million in cash to an escrow agent to be held pending completion of acceptance testing of the rig upon its arrival in Israel.
"This is a new era for Zion and a positive step forward for our 2020 exploration plans," Zion's COO, Robert Dunn said. "With our asset based in the State of Israel, our planning and flexibility will become more robust."
"We believe this is the right time for this to happen," stated Zion's President, Bill Avery. "Having cash budgeted and available for the purchase of this rig shows the strong support of our shareholders and evidence of God's faithfulness."
The rig is a 1600 horsepower AC Top Drive equipped rig with a twin 1600 horsepower mud pump system with a depth capability of 20,000 ft. The rig will be equipped with almost 15,000 ft of heavy 5" drill pipe along with associated well control equipment and inventory.
The rig underwent a full CAT III & IV certification in late 2017, reassuring the quality of the rig and ancillary equipment, and it has drilled two wells since certification.
The rig and equipment will be imported into Israel from Romania, where the Drilling Rig is currently stored.
The State of Israel has currently imposed travel restrictions relating to the Coronavirus outbreak, including a requirement that any person arriving in Israel, including the operating crew for the rig, will currently need to undergo a two-week quarantine.
In addition, the ports of entry into Israel through which the rig will need to enter, may be undergoing work disruptions on account of the virus outbreak. Accordingly, it is not possible at the present time to accurately estimate the time or resources that may be necessary to import the Drilling Rig onto the well site or any delay arising as a consequence of the outbreak.
Zion Oil & Gas, a public company traded on NASDAQ (ZN), explores for oil and gas onshore in Israel on their 99,000-acre Megiddo-Jezreel license area.
"The Lord Himself goes before you and will be with you; He will never leave you nor forsake you. Do not be afraid; do not be discouraged." Deuteronomy 31:8
"Sing to the Lord, for he has done glorious things; let this be known to all the world. Shout aloud and sing for joy, people of Zion, for great is the Holy One of Israel among you." Isaiah 12:5-6
FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements. Statements in this communication that are not historical fact, including statements regarding Zion's planned operations, anticipated attributes of geological strata that may be drilled or tested in the future, import the rig it purchased into Israel in a timely manner and Zion's ability to successfully raise the funds needed to undertake all of its planned exploration efforts; Zion's ability to continue as a going concern; Zion's ability to have its common stock continue to be listed on the Nasdaq Capital Market; the timing and completion of the 3-D seismic survey processing, interpretation of the results and plans contingent thereon, and operational risks in ongoing exploration efforts, are forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These forward-looking statements are based on assumptions that are subject to significant known and unknown risks, uncertainties and other unpredictable factors, many of which are described in Zion's periodic reports filed with the SEC and are beyond Zion's control. These risks could cause Zion's actual performance to differ materially from the results predicted by these forward-looking statements. Zion can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.