Zion Oil & Gas, Inc.

What they do

Zion Oil & Gas, Inc. is an exploration-stage company with a 25-year history of oil and gas exploration in Israel. It holds Exploration License 434 (Megiddo Valleys License 434) covering approximately 75,000 acres and is currently re-entering the MJ-02 well to test hydrocarbon zones. The company owns a drilling rig and related equipment through subsidiaries, which may also provide drilling services to other operators in Israel when not used for its own exploration.

Revenue drivers

• Exploration activities — No revenue from oil or gas sales; the company is in the exploration stage and has not reported revenue for recent quarters.
• Drilling services — Potential future revenue from contracting Zion Drilling Services to other operators in Israel, but no such revenue has been reported.

Recent performance

For the year ended December 31, 2025, Zion reported a net loss of $7.6 million and operating cash flow of -$8.0 million. Revenue was $0.00 in each quarter of 2025. As of June 30, 2026, the company had $9.6 million in cash and cash equivalents, total assets of $54.8 million, total liabilities of $5.0 million, and shareholder equity of $49.8 million.

Strategy

The company's strategy is to continue exploration on the Megiddo-Jezreel area, specifically re-entering the MJ-02 well with new technologies and stimulation methods to unlock hydrocarbon flows. In early 2025, the rig crew completed maintenance, drilling out a temporary plug, and perforation and stimulation operations, with gas observed at surface during flowback. Management is also focused on managing visa and logistical challenges for its crew and pursuing further exploration under License 434.

Risks

• Going concern — The company has incurred net losses and negative operating cash flows since inception, and its auditors have raised substantial doubt about its ability to continue as a going concern.
• No revenue — Zion has no current source of revenue and depends entirely on external financing to fund operations and exploration.
• Exploration uncertainty — The company's success depends on finding commercially productive hydrocarbons in deep wildcat wells in Israel, which is inherently risky and uncertain.
• Financing needs — Existing cash balances are not sufficient to satisfy planned exploration and development expenditures, and future capital may be raised through equity or debt markets, which could be dilutive or add leverage.

Outlook

Management expects to incur substantial expenditures in exploration and development programs and will need to raise additional capital. The company is working to continue testing the MJ-02 well and has faced delays due to visa issues and regional events, but plans to resume operations. The current Exploration License 434 is valid until September 13, 2026, with potential extensions through September 2030.