Zion Oil and Gas

Zion Oil and Gas is a Dallas, Texas-based hydrocarbon exploration company; its principal assets are the three license blocks in northern Israel. The company was founded by John Brown in 2000 and is quoted on the NASDAQ Global Market (stock symbol: ZN). What makes Zion different from other exploration minnows is that it is a faith-based company which is Biblically-inspired and convinced that it will discover one of the largest oil fields in the Middle East during the "End Times", based solely on the reading of Biblical texts. The company has been heavily promoted in Christian nutjob publications such as WorldNetDaily and most of its 4000 investors are believed to be evangelical Christians with a lesser number of Jews. The primary aim of the company is to make Israel self-sufficient in oil for decades to come, just in time for the Rapture.

However, despite the Christian fundamentalist background of Zion's founder, the company does not rely on any of that creationist flood geology nonsense. Several members of the board are either qualified geologists or have worked in senior positions for major oil companies.

I believe Zion Oil & Gas was ordained by G-d for the express purpose of discovering oil and gas in the Land of Israel and to bless the Jewish people and the nation of Israel and the body of Christ ( NIV). I believe that G-d has promised in the Bible to bless Israel with one of the world’s largest oil and gas fields, and this will be discovered in the last days before the Messiah returns and that it will be found on the Joseph License and the Asher/Menashe License, both being on the Head of Joseph ( and 22-26)

John Brown
John M. Brown was an "executive" for Michigan-based toolmaker GTE Valeron when he became a born-again Christian in January 1981 following a battle with alcoholism. He professes to be a 'Christian Zionist' and states:

In spring 1981, Jim Spillman, who had just written a book called The Great Treasure Hunt, visited the Zion Temple in Clawson, Michigan where Brown was a member. The talk that Spillman gave filled Brown with a "Vision" and set him on a mission from "G-d". During a visit to Israel in 1983 Brown claims to have been "told by God that [Brown was chosen] to fulfill His promises to Israel" (d)  Based on a map of the twelve tribes of Israel, Brown liberally interpreted many passages in the Bible to mean that not only were there large oil deposits in Israel but that Brown was the gentile chosen to discover them. Indeed, Brown seems to see himself written into the Bible and considers himself to be a de facto prophet. In The Vision (a company mission statement) Brown signs off the Founder's Testimony as John Brown, Founder.

Later in The Vision, following a brief outline of oil exploration in Israel, Brown explains the reasoning behind the founding of Zion:

We are then regaled with further details of how Brown's "Vision" came into being which are worth reproducing in full:

Following this we get more self-justifying cherry-picking of various Biblical books:

Zion's main exploration licence is the "Joseph Project" and Brown proceeds to infer geological prospects from Biblical verses:

Geology
Zion's basic premise is that Brown noticed on a 1973 map of the 12 tribes of Israel that Asher's Land looked like a foot which he took as a clue from the Bible:

Results
Zion has been at this since 2000, and (unsurprisingly) found less oil than is in your car.

Despite a few traces of hydrocarbons there have been no finds in commercial quantities. Zion has drilled four exploratory wells; the most recent and deepest (Ma’anit-Joseph #3) bottomed in their target horizon at 19,300 feet after 9 months of drilling apparently without any significant discovery. Zion Oil and Gas appears to have abandoned the Biblical maps and gone for pure geology with bids for acreage around the Dead Sea where there are known asphalt seeps.

In October 2011, Zion decided to resort to conventional methods of finding oil by contracting for a 2D seismic survey with the Geophysical Institute of Israel. However, as a desperate measure for success John Brown beefed up his exploration activities with a call for more prayers.

As of April 2012, Zion had still generated no income but elected to sponsor both a "Night to Honor Israel" banquet and an "Ambassadors" reception at the 7th Annual Washington-Israel Summit of Christians United for Israel (CUFI) in Washington, D.C., 16-18 July 2012. As Richard Rinberg (Zion's Chief Executive Officer) is scheduled to speak at the banquet, and John Brown is expected to be interviewed for broadcast on the Daystar Television Network, the expense could be seen as a marketing exercise to drum up much-needed investment for the company which continues to rely on a USGS estimate of recoverable hydrocarbon reserves in the Levant Basin.

Stock market trading
Zion Oil & Gas, Inc. was founded in April 2000 with the creation of 20,000,000 shares of common stock, par value $.01 per share. An initial Public Offering (IPO) was made on 29 December 2006 on the American Stock Exchange and remained open until 26 May 2007 when it closed with a subscription of 1,806,335 shares of common stock at $7.00 per share raising a total of $12.6 million. It is thought that most of the capital was provided by 4000 shareholders who are predominantly conservative Christians. Further increases in the authorised share capital were made in 2008 and 2009 bringing the total to 50,000,000 shares. As of June 15, 2011, the outstanding capital securities consist of 25,339,624 shares of common stock.

Zion raised over $12.6 million in its IPO and subsequently, in a follow-on offering that closed in January 2009, raised approximately $6.6 million. In June 2009, Zion completed its first stock rights offering and raised approximately another $21 million and in November 2009 completed a second stock rights offering, raising approximately $18 million more. In July 2010, Zion completed a third stock rights offering, raising approximately $12.4 million and in December 2010, Zion completed a fourth stock rights offering, raising approximately $18.2 million.

In June 2011, Zion again went to the market to raise a further $31.25 million with a rights issue of 6.25 million shares at $5 and one-year warrants with an exercise price of $3.50. The fund-raising had only an 80% uptake and raised only $24.5 million.

It would appear that Zion still have funding issues as in December 2011; the expiration date of the company's warrants was extended by 11 months. Zion's CEO, Richard Rinberg, stated that "This extension of the exercise period will provide our ZNWAW warrant holders additional time to exercise their warrants and increase their ownership participation in the Company. We hope that a substantial number of these warrants will be exercised".

Investor advice
"All investments in Zion Oil and Gas, Inc. should be based on both prayer (Isa. 48:17) and only after a very thorough legal and financial review of all of Zion’s SEC Filings (www.sec.gov)."

Pump and dump?
Hal Lindsey is a broadcaster for Trinity Broadcasting Network and presents a biblical prophecy TV show &mdash; The Hal Lindsey Report. In 2007 he told his viewers that "Zion Oil right now is on the verge of discovering oil… [a sign that] we are really on the very threshold of Lord Jesus' return." He also pumped Zion in his column on WorldNetDaily with the blatant misinformation that Zion had drilled "eight exploratory wells which had all showed signs of oil and gas" (in 2007 only one had been drilled) and suggested that Israel's oil reserves "could rival that of Saudi Arabia." What Hal didn't tell his viewers or readers is that he and his relatives had significant holdings in Zion of the order of 725,000 shares and had actually received a gift of 50,000 shares from Brown in 2002. Following Lindsey's TV endorsement Zion shares rose from $7.64 to $9.25 and trading volume increased 11-fold.

Allegations of fraud
One investor has made accusations of fraud against Brown across several internet forums and has created a site entitled "John Brown and the Zion Oil and Gas Securities Fraud". The chief complaint appears to be that Brown believes that "the oil will only flow when a super spiritual person known as Joseph comes into his life". The complainant Yousef Yomtov, who uses the alias 'Yosalov', alleges that he is the "super spiritual person" but Brown has refused to meet with him. As only a wingnut can do, Yosalov also sees something highly suspicious in the fact that in January 2009 Zion announced that they had issued "approximately 666,000 warrants with a $7.00 exercise price"

As well as his website Yosalov is selling a report about Zion for the very reasonable price of 33 shekels.