The Dallas-based oil and gas exploration company said in a Form 8-K filing with the Securities and Exchange Commission after the close that the results of logging tests performed on its Ma'anit-Joseph #3 well in Israel were "not what we had hoped for."
As a result, Zion Oil said it believes there's "little chance" the well contains hydrocarbons "in commercial quantities," although the company did say it does see evidence of natural gas.
The stock was last quoted at $5.01, down 15%, on volume of nearly 50,000, according to Nasdaq.com. Based on a regular session close at $5.90, the shares were up 24% year-to-date, although they'd pulled back since hitting a 52-week high of $7.87 on June 6.Zion Oil isn't giving up on the well, however, as it has already spent roughly $29 million on "drilling, logging and other related outlays," according to the filing. It's going to conduct further testing procedures expected to cost up to another $2.5 million. The company argued in its filing that: "If we do not test the well, then we will never know with any degree of certainty the production capacity, if any, and possibly, at a later date, some other exploratory company may re-enter the well that we drilled and prove it to be commercial." It continued: "By testing the well, we hope to gain extra insight into exactly what stratigraphic interval(s) the gas is coming from and thus be able to establish with a high degree of certainty this well's hydrocarbon production capacity, if any." Zion Oil was recently added to the Russell 3000, Russell 2000, Russell Microcap and Russell Global indexes upon their reconstitution on June 24. --Written by Michael Baron in New York.
>To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: email@example.com
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV