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.
Source: Zion Oil & Gas
Date: Mar 18, 2020