Zion Oil & Gas, Inc. (ZNOG) Earnings Call Transcript & Summary

Okay. Good morning, and good afternoon. Welcome to the Annual Meeting of Zion Oil & Gas, the date is June 5, 2024, the time is 9 a.m. We'll go ahead and call the meeting to order. Before start our official business, we'll have Paul Oroian, lead us in prayer.

Thank you. Can you all hear me?

Yes.

Yes.

Okay. Dear heavenly father, we live in challenging times. Israel is being attacked for many places, destructive weapons and destructive rhetoric. We pray that you dear God protect these people. We ask that you open your hearts of their enemies, so they can feel peace and understanding. Dear heavenly father, we are grateful to you for granting us the grays, wisdom and means to run Zion Oil. We have faith in your guidance as we continue to ask you to give us the strength to work hard and work smart to make our business prosperous and abundant. Everything we do is in your name. We also ask for your graceful guidance as we build and grow Zion Oil. We put our trust in your hands that you will bless our company, our suppliers, our employees, the Board of Directors and shareholders. We pray that you will protect this enterprise and the investments the shareholders have put in it. We ask all of this in the name of the father and the son, Jesus Christ, Amen.

Thank you very much, Paul. Before we get to the official business, we're going to have President and General Counsel, William Avery, read the FRS.

Good morning. Before we proceed, please, may I remind you that during the course of these presentations, or in answers to your questions, anyone on behalf of the company may make forward-looking statements regarding future events or future performance of the company. Of course, we cannot foresee the future and actual events may turn out to be different from what we expect, and because of the nature of this meeting, we cannot undertake to provide updates or corrections to any statements that we make about the future. We refer you to Zion's filings with the Securities and Exchange Commission, in particular, the company's most recent filings on Form 10-K for the recently completed fiscal year and Form 10-Q for the first quarter. These documents identify important factors that could cause actual results to differ from any forward-looking statements we make today. Thank you.

Thank you, Bill. We'll go ahead and have our Chairman and Founder, John Brown come up and have a bit of an introductory.

I've been praying about what God wanted me to say to most outboard and all our stockholders, and typically what I wound up knowing today was confirmed to me that what I'm asking for is prayer. I'm asking prayer for Israel. I'm asking prayer, God, that will protect all those people in Israel, I'm requesting our board and also the shareholders to pray for that and pray for our own country as well, and to pray that God would give us the strength to overcome this evilness that's going on in the world. And I believe that we'll pray for Israel. I ask all of you to keep them continually in your prayers, the same as Zion Oil & Gas needs your prayers in order to have success as well, that we're going to reenter this year. And I pray that in Jesus today, and I ask him to put that in all of our hearts, that we keep that as our top priority, that we pray for Israel, pray for Zion, and any other thing that you need. So I'm usually a lot more winded, but I really don't have the energy to do it anymore. So those prayers, God gave that to me, so I wanted to share it with all of you.

Thank you, John, once again, good morning, good afternoon, everybody. Thanks for attending today's meeting. At this time, I'll call the meeting to order on the Zoom webinar invitation. I believe, Andrew, you have good people brought in on this, okay. Everybody should have received the copy of the agenda and the rules of conduct, and then everybody should have been registered by May 31. So here we are June 5, and our annual meeting is kicked off. So depending on the time, the management will try to answer as many questions as we can raise during the webinar meeting. But we're going to obviously have an order of business that we're going to go through on the proxies that everybody voted. So our Executive Vice President, Secretary, and Treasurer Martin will act as secretary of the meeting and timekeeper. The Board of Directors has appointed Martin as to act as the Inspector of elections, and he has previously taken his oath as the Inspector of elections. So, rules of conduct, you should have all had the rules of conduct for this meeting. In order to conduct the meeting in an orderly fashion, we ask that participants follow these rules as stated in the rules of conduct. Please limited your submitted questions to corporate business. As noted -- sorry, as noted in the notice and proxy statement previously made available to you, the record date for voting at this meeting was the close of business on April 8, 2024. The proxy statement was filed with the Securities and Exchange Commission on April 11, 2024, and direct mailings of the notice and access were provided by American Stock Transfer & Trust Company, LLC by affidavit of May 1. Next order of business is the report on the quorum and proxies. The Secretary of the meeting will now report on the existence of a quorum for the meeting.

The shareholder list shows that holders of 730,304,892 shares of common stock are entitled to vote at this meeting as the inspector of elections are represented in-person or by proxy, 464,573,067 shares of common stock or approximately 63.61% of all shares entitled to vote at this meeting.

Thank you, Martin. Based upon the percentage of the totals of the company held by the holders on record now present at the meeting, and either person or by proxy, a quorum is present. This meeting is now duly coveted for the purpose of transacting business properly before. To go on the proposals and discussions, the next order of business is a description of matters properly brought before the meeting. The following business portion of the meeting, John Brown and I will report on current corporate affairs, after which there will be a question-and-answer session. Proposal 1, election of directors. This is the first item of business today is the election of directors. 4 directors are to be elected today as class 1 directors for the company. Directors elected today will hold office until 2027 of the Annual Meeting of Shareholders and their successors will be elected and qualified. The nominees are listed in the proxy materials on the agenda. The Board of Directors of the company recommends the following nominees: Kent Siegel; Sarah Caygill; Javier Mazon; Jeff Moskowitz; John Brown. These are -- there have been no nominees recommended by any one other than the Board of Directors. May we have a motion of the recommended candidates for the directors.

I nominate each of Kent Siegel; Sarah Caygill; Javier Mazon; Jeff Moskowitz and John Brown as Class 1 directors of the company to serve until the 2027 Annual Meeting of Shareholders and until their successors are elected and qualified.

I second the nomination.

Voting will commence after all proposals have been presented. We'll now move on to proposal 2. Proposal 2 is to ratify the appointment of RBSM, an independent registered public accounting firm as independent registered public accounting firm for the company for the fiscal year-ending December 31, 2024. Does anyone have any questions regarding proposal 2? May we move to have a motion regarding proposal 2?

Mr. Chairman, I move the proposal to ratify the appointment of RBSM, LLP, an independent registered public accounting firm as the independent registered public accounting firm of the company for the fiscal year-ending December 31, 2024.

Mr. Chairman, I second the motion.

Thank you, Javier and Brad. Proposal #3 is to approve an amendment for the additional number of common -- of shares of common stock available under the 2021 Omnibus Incentive Plan for employees, directors and consultants. Does anybody have any questions concerning proposal #3? May we have a motion regarding proposal #3.

Mr. Chairman, I move the proposal to approve an amendment for the additional number of shares of common stock under the 2021 Omnibus Incentive Plan for employees, directors and the consultants.

Mr. Chairman, I second the motion.

Thank you, Gene. Thank you, Martin. Because there's no further business on this agenda to come before this meeting, we'll move on to voting. If you have previously voted your proxy card, your shares will be voted accordingly. If you have not already done so, please log on to the AST platform to vote your proxy accordingly. The polls will open at 9:15 Central Standard Time, June 5, 2024.

If you have not already done so, please log in to the AST platform to vote your proxy. [Voting]

Welcome back. The time is now 9:25 a.m. today June 5, 2024, and I ask the inspector of elections to collect and tabulate the results. The votes or the polls are officially closed. The secretary of the meeting, please report the results of the voting.

The ballots have been tabulated and that the results are as follows: proposal 1, with respect to proposal 1 for the election of each of Kent Siegel; Sarah Caygill; Javier Mazon; Jeff Moskowitz and John Brown Class 1 directors of the company. The following persons have been elected as directors with the following votes. Kent Siegel, 300,765,133, for against 13,839,984, which represents a 95% for; Sarah Caygill, 299,955,349 against 15,597,987, representing 95%; and Javier Mazon, 299,112,992 against 16,984,690, representing essentially 95%; also, Jeffrey Moskowitz, 307,157,044 and against 9,791,986, representing actually 96.9%; and John Brown, 307,697,119 and against 10,764,226, representing 96.6%. Proposal #2 with respect to the ratification of the appointment of RBSM, LLP, independent registered public accounting firm as the independent registered public accounting firm for the company for the fiscal year-ending December 31, 2024, was approved with 442,732,544 shares being 62% of the shares in total of all shares outstanding, of voting in favor against 10,099,751 against and abstaining 11,740,764. With respect to proposal 3, for amendment, additional number of shares of common stock under the 2021 Omnibus Incentive Plan for employees, directors and consultants was approved with 267,223,281 shares being 84% of the shares voting -- voting in favor of 50,269,862 against an 6,204,182 abstaining.

All right. Thank you very much, Mr. Van Brauman. This is the adjournment of the official portion of the meeting. So if there is no further official business to come before this meeting, do I have a motion for adjournment?

I raise a motion for adjournment.

Does anyone second?

John Seery.

Thank you, John. You've heard the motion to adjourn the meeting. All those in favor, say aye. The motion is carried. I declare the meeting to be officially adjourned at 9:30 a.m. Central Standard Time, June 5, 2024. We will now proceed to the informal portion of the meeting. I will make a brief comments to you followed by some reports. Please reserve your questions-and-answers following the period of our reports. At this time, I'll call our General Counsel and President to provide the disclaimer.

Okay. I'll do the black bead again. Before I proceed, let me remind you that during the course of these presentations or in answers to your questions, anyone on behalf of the company may make forward-looking statements regarding future events or the future performance of the company that are not historical fact, including, but not limited to, statements regarding Zion's operations and the results there from, including testing and completion. Zion's ability to discover and produce oil in commercial quantities. Zion's ability to continue as a going concern, operational risks and ongoing exploration efforts, regulatory approvals needed for our license and the rigs operation, the effect, if any, of the coronavirus pandemic or regional conflicts on the timing and operation of the well and liquidity for shareholders on OTCQX are forward-looking statements as defined in the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 signs 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. These risks and uncertainties include, but are not limited to those described in Item 1A in Zion's annual report on Form 10-K, which is expressly incorporated herein by reference and other factors as may periodically be described in Zion's filings to the SEC. Zion's can give no assurance that the expectations reflected in these statements will prove to be correct and assumes no responsibility to update these statements.

Thank you, Mr. Avery. I'll have a brief dialogue, and then we'll get into the kind of the operations portion of it. We'll do a geological report Dr. Lee Russell followed by operations report with Monty Kness and a small cash flow segment within -- with our CFO, Michael Croswell. So just kind of opening on my side here. We started operations as the PR was released Monday, June 3. As we embark on our work plan for the MJ-01 reentry, we can reflect on the obstacles we have navigated to reach its point. Without the steadfast support and belief in our vision, this would not be possible. The support and prayers of our staff in Israel have been overwhelming and much appreciated. As many of you are aware, many of our MOE, which is Ministry of Energy, liaisons, along with some of our staff have been called the reserve duty and are still active duty at times. We ask for your continued support and prayers allowing for the safety during these deployments. Overcoming elections with the complete changing of the ministers and present conflict coupled by blockades in the region, we have prevailed. This is built on relationships with our regional service providers. We are positioned with a safe and efficient manner for operations going forward. During tasks and obstacles that seem insurmountable, we turn to lord for answers. A simple but impactful verse 2 Corinthians 5:7, where we live by faith, not by sight. On behalf of Zion Israel and Zion Dallas team to be thanking for all your countless prayers and motivation, allowing us to move forward with conviction and focus on our journey to fulfill the vision set forth. I will now pass the floor to Dr. Lee Russell.

Thank you, Rob. It's a pleasure to be here this morning addressing our loyal shareholders. So I can't say enough about how much we appreciate all your prayers and support through the difficult times that we're in and the efforts that we're moving forward with. Exploration in any setting is a complex endeavor. And in a setting like Israel, it's not only technically complex being in the Jordan River Valley up against the Dead Sea Fault Zone that engenders a lot of geologic complexity. But the environment in Israel, the geopolitical environment is also extremely challenging. So this morning, I would just like to show you a snapshot, I think all of you as investors and interested shareholders would enjoy seeing a snapshot of what our geology looks like, where we are operating right now. And the slide you see right now is a seismic section -- seismic structure section across the structure that we're exploring in. It's coming from the left side of the slide, there is a relatively simple faulted raft dipping down to the East. And then you see a fault in blue, which is a major reversal. And as you go to the East of that, you see a number of other thoughts that segment the structure. There's a normal fault on the very East and a number of smaller normal faults within the structure. You can see the MJ-01 wellbore here, and you can see the MJ-02 wellbore. It's interesting to see that the 2 wells are separated by a fault with significant offset. So the structure is highly -- it's complicated, it's highly compartmentalized, which means that the whole process of fluid flow within the potential reservoir zones is -- it's difficult and it's a complicated issue to resolve. But -- so we know for sure that MJ-01 is in the different fault slice a little small fault block and different fault block than the MJ-02s drilled in. Noted on the MJ-01 wellbore is a yellow horizon there with notedly show. When MJ-01 was drilled, and if you remember through all of our information that we put out during MJ-01, there was a lot of operational difficulties with MJ-01, but we were blessed to be able to write before the total depth of the well within 30 meters at the bottom of the hole, we were able to encounter a significant show of hydrocarbons, which is in the position, which is indicated by the yellow zone there. When we drill through that, we encountered hydrocarbons that came up through the drill string to the surface. We observed hydrocarbons on the pits. The drill floor basically reached with the older of hydrocarbons, and we recorded in our mud log unit, which analyzes all fluids and hydrocarbons coming up from death. The mud log, the chromatogram on the mud log indicated hydrocarbons from methane all the way up to pentane, C1s to C5s, which is a significant show of hydrocarbons. We had a lot of difficulty in attempting to test this well. The reservoirs are tight. They have low permeability. The porosity is modest, and that leads to difficulties in trying to complete and test the well. We had similar difficulties in MJ-02 in attempting to test that well and we have negative results. But as a result of what we have learned from both MJ-01 and MJ-02, we have come up with a plan for testing methodology, which is much more high tech than what we used in either of these 2 wells, we feel -- and you will hear more about this as the presentations go along from Monty and Monty Kness and Rob. But we feel like we have now addressed the issues of why we had lack of success in these 2 wells, and we're ready to go forward and do successful testing and MJ-01 in our reentry. Next slide shows exactly where we're going to be testing that is the brackets there show that we'll be testing from at the bottom, the zone where we add hydrocarbons to the surface, the yellow zone there. And we have 2 other significant zones between the yellow and the blue horizon there, a little higher, Andrew, there you go. We have 3 zones that we will test within that interval. We have an extremely confident technical staff, both geologists, geophysicists and petrophysicists and our consulting petrophysicist is a world-class scientist, and these identified not only the show zone, but 2 other additional intervals within the MJ-01 well that have significant potential to flow hydrocarbons. So this is where we are right now. We're very confident with what we're seeing. We're confident in the team, and we're confident in the plan going forward, and we are looking forward with great anticipation to the results of this effort. So thank you again for your support and your prayers.

So thank you very much, Lee, on that presentation. I know we do get quite a few questions on, we see some sings, but that is a small snippet of what we've put out there for you all to see. But as Lee kind of mentioned it's geologically, it's a challenging area, but it's something that we're more than confident to navigate through and provide some hopefully positive results in the future. We do look forward to the operations getting kicked off down hole. And with that being said, I'm going to go ahead and turn it over to Monty Kness, he is our operations fellow overseas. Maybe he can give us a good rundown and give our shareholders what they're looking for, my friend, it's your floor. I think you're muted there, Monty.

Yes. Thank you. Thank you, Rob. Good morning to everybody, state side and good evening to everybody on this side of the pond. Thank you for giving me the opportunity to once again address what we are doing operationally both currently and over the course of the last year since we last met June of 2023. So go ahead and go to the next slide there, Andrew. Let me just talk you through what we've been up to since June 7, which was our meeting date last year. As you might recall, during this time last year, our license on the MJ pad site was expiring. So since then, we worked on extending our license, which was approved in September of 2023. Immediately upon receiving our new license, we worked on finalizing the reentry plan on MJ-01, which we submitted to the MOE on October 5. Unfortunately, just a couple of days later, the terrorist attack occurred, which call it many of the VIPs within the MOE VIP meeting decision makers, those who would be reviewing our work plan, asking pertinent questions and ultimately approving the application were no longer active within the MOE. They were called to a higher service at that time. So it delayed the reviews and approval for the job plan, a couple of months, as you can see. On December 6, we did get that job plan approved. Basically, what was entailed in that job plan is everything that we are planning on doing on the MJ-01 well as far as reentering and all the stimulation techniques, the equipment that we're using. So it had a series of different approvals, but that wasn't the final approval necessary in order for us to go to work. We needed one more additional set of approvals, which comes via the supervisory committee. And that entails several different agencies, all of which have to be together at the same time. That was extremely challenging to get organized with all of the ongoing events happening in Israel. Eventually, we did meet and everything was approved on February 21 of this year. That essentially gave us the green light to move forward with our planning. So we opened up the tendering process for all of our subcontractors and service providers. We started sourcing material and equipment during that time. And it took us a good 6 weeks to finalize a lot of that stuff. And in April, we had identified and commercially contracted all -- essentially all the service providers, equipment and material, and we were ready to rock and roll in just a couple of weeks after that Turkey placed an embargo against all shipments coming from Turkey into Israel. Unfortunately, post opening the well, which basically means once we've open MJ-01 back out, I'll talk a little bit about it here in a minute, drilled all the cement and had the hole open. All of the equipment and service providers post that were coming from Turkey. So we had a setback there. We had to renegotiate and open up the commercial tendering process to other service providers. Luckily, one that we've worked with in the past, who was on MJ-02 was available in the time frame that we were looking to shoot. And I'm in the process of finalizing the last half of -- the last 1/3 of our operations with them. That should be completed next week. Right now, we're -- we've got all of the service providers contracted through opening the well and wireline and the stimulation flowback and well testing should happen sometime next week. We've got to call on that tomorrow to kind of secure and go through some of the remaining Q&A. But all major consumables have been purchased and we'll be in transit this month to location. So all in all, despite the fact that we've had a major setback a month ago, we're moving forward. And we found some good suppliers in Romania and the United States who came to our rescue, so to speak, especially when it comes to some of the newer technologies that Lee briefly mentioned. And they will be in transit here in a few weeks. So we're in good shape right now, go ahead and go to the next slide, Andrew. We're in good shape for the upcoming operations. I'll briefly walk you through what we're going to be doing this month. We have the complete rig crew on location right now. They are firing up the rig, doing some minor repair and maintenance, changing oil, going through -- restarting the electrical system, just making sure that everything is working prior to rigging down. We'll start rigging down next week, at which point we will inspect and recertify the critical components. The lifting equipment is obviously the most critical safety wise to our operation. So we'll go through anything, any piece of equipment that could potentially lift a load of any kind all the way down to just simple slings. So I've mentioned some of them here below. We'll do thickness inspections of all supporting structures, primarily the substructure, make sure we don't have any hairline cracks or any kind of damage that could potentially cause a collapse when we're pulling and the rig is supporting all the weight of all the drill pipe and tubing that will be going down. So that will take place. We'll test and reinspect and recertify all of our high pressure lines, hoses, and connections. We'll do a complete electrical certification on the rig. We've already completed the fire and safety equipment on location and got it back up into spec and recertified, as well as the self containing breathing apparatuses and monitors for any hazardous gas that might come to surface should we encounter some downhole. So that's the inspection and recertification of our rig. That's going to take 10 to 14 days, as soon as the mast is down, the mast should be down sometime next week. At the same time, the inspection is going on, we'll be regrading our pad site and getting this seller level in anticipation of the rig being moved over, MJ-01. And we will rig up over MJ-01 towards the end of the month. Next slide, please. In July and August, we'll begin opening up the well. At first, we'll have to pull the tubing that's down below, which is allowing water from an aquifer. It's about 1,300 meters deep, to come to surface. We're doing that as a courtesy to the water authority. So we will pull the tubing out of that water monitoring well. And then we'll stabilize the well, which means we'll cut the flow of water that's currently coming up to surface. We will drill out the cement and plugs. This is going to require multiple trips. We have roughly 625 meters of cement downhole that we will have to drill and clean out, both in the 7-inch casing and in the 4.5-inch casing. So that will take multiple trip runs in and out of the hole. So that could take up to 10 to 14 days to get the entire well drilled out and clean, as you can see below. After which we will reverse circulate all the debris and try and get that hole as clean as possible. That's very important, and that's something that we might have to take multiple attempts, because when we reperforate, we are reperforating in a very small section. And that's part of this engineering process that Lee touched upon. It's going to be a very narrowly focused stimulation plan. And just any debris that could be downhole could potentially clog our very small depth of new perforated holes. So we're going to have to take our time and make sure that all of the debris, all of the cement cuttings, any kind of flaking from the casing, just basically any kind of debris, the plugs that we get drilled out, they will splinter off and they will fracture. So we're going to have to take our time to really make sure that, that wellbore is clean in order to preserve the integrity of the future perforations. Once we've got the well cleaned out, we will run what's called a casing caliper log, which is going to inspect the diameter and the integrity of all the casing that's been downhole. As you know, it's been downhole for several years now. We don't know the condition of the casing. We're not anticipating there being any issues. But this is a safety measure that we are taking to ensure that we've got both the OD, which is the diameter necessary to run all of the tools through the casing and reach the location of our future perforation and target zones. So that will be run. We'll also run what's called a casing collar locator log. And this is going to give us the precise depths, which is going to be extremely important when we run the casing patches that you see on the next bullet point. The casing patches are going to be used to close off all of the previous perforations that were done in 2017 in order for us to maximize the focal point of our simulation program and keep some backside pressure from leaking off in order to allow us to push on it as hard as possible when we do the stimulation. So those casing patches have to be run to 0.6 of a meter. So it's very important that we are very accurate with our depth and placement. So we will be running the casing collar locator log in order to ensure that happens. Once the casing patches are installed, we'll pressurize the well and test the casing integrity, and we will sample any fluid that resides downhole and maybe get some good news early. Next slide, please. The final part of our operations in August or September or August through September potentially would be to perforate zones 1 and 2 in the manner that I described briefly earlier, stimulate those zones. As Lee mentioned, we have an option to do a third zone as well, at which point we'll underbalance flow test and analyze the results. I had talked more in detail of what that process looks like on the previous shareholders' meeting. So if you missed that, I would encourage you to go back and listen to some of that, as that talks about the porosity and permeability and how we're going to overcome some of those situations. So it might be good to go back and look at that, because we're essentially doing the exact same thing on here. The exciting part about this is, one, as I mentioned, we are going through a much more targeted, a much smaller zone, and we are using an engineered micro-proppant, which will allow us to control the screen out and extend the length and reach versus what we tried last time, which had some smaller particles associated, which could have potentially clogged some of, call it a screen out, which basically it prevents some of the more, the bigger proppant from penetrating in and opening up some fissures. So we have an engineered product coming in this time. The characteristics with it, if you could see it, they're very interesting, they're very neat. It stays suspended and its reach is extremely long. And it's a ceramic base, which has a high crush resistance to the pressures that we're going to be dealing with below. So we're really excited to give this product a try, and it's going to work real well with the engineering that our frac engineer has done. So I think we have a really good shot at extending the reach on this stimulation even further than we were able to on MJ-02. Next slide, please. So, the flowback, this is a slide from the previous shareholders' meeting. Once we've got the well stimulated, we're going to underbalance the well if it doesn't come on naturally. We're hoping that we can open up and unlock enough where the natural formation pressure will push. But if it doesn't, we'll use nitrogen to underbalance, basically create pressure significantly lower inside of our wellbore than that of the formation pressure. When that happens, the formation pressure will push out whatever it has inside, and that will come into our wellbore through our perforated holes, and it will come to surface. So that will be the flow back portion. The timing, we don't know how much time it will take. We could get a lot of flow, we could get a little bit of flow. So it's very variable on the length of time that we'll be flowing back the well, but we're going to keep flowing it and continue to take samples when stuff comes on location. But be patient with us on that part, because it could take a week, it could take a month. That part is pretty variable. And we'll just see how the formation reacts once we introduce this nitrogen into the well. Next slide. So, this is also from the previous presentation. As I mentioned, we will use nitrogen. The micro-proppant will act as a buffer to keep the pores open. The injection process and high pressures that we're going to put it under will hopefully help us connect with different micro-fissures throughout the formation below. And the more connections we have, the more pads that liquid and hydrocarbons have to flow through. And the further out we can get, the longer our reach into potential targets will be. So all of the frac simulations show us reaching a considerable distance from the wellbore, and we should have a pretty good opportunity to unlock what is in there. And God willing, we'll see some success. That's it for me. I appreciate you guys very much, and I appreciate your support, and I look forward to updating you as we carry on.

Thank you very much, Monty. Very informational operations report and kind of a timeline of what we're going through, just to really emphasize the fact that we're dealing with very complex geology downhole, as Dr. Russell had mentioned earlier, with sizable faults, compartmentalized areas, highly fractured rock. It's our intent to use some of the newer technology that's U.S.-based to be able to exploit the natural fracturing in the rock system there. So, we're quite pleased with the modeling that was done by some of the engineering groups that model the fractures, natural fracs, et cetera. And I think this product that we're going to be using is going to help exploit that and probably bring us some success. And with that being said, I'm going to turn it over to Mr. Jeffrey Moskowitz from the Israeli office, and he will kind of give you a state of affairs in Israel.

Well, there's a saying, seeing is believing. And I wish all of our 38,000 shareholders -- 40,000, I can all bring you to Israel to see how we are operating and how we are acting from day to day. Because if you read the news, that's how they sell, right? It's got to be panic, negative. Monty, who you've just heard, was the first one actually who came to the site, took him up from the airport, and I had the time to keep quiet because he kept going on. I can't believe this country is just so normal. Everything's so normal. That's all he talked about, obviously, the job on he was there. Angelo, our company man, I just sat with him on Thursday. You know, I don't want to start stuttering or anything like that, because it's hard to explain how that's the steadfastness, that's our strength. I'm talking about the state of Israel. That's our resoluteness. That we -- notwithstanding what our enemies want, we will continue to lead a normal life. My son, when he was in active duty, he called and there was one thing that he was concerned about. Are we continuing just to live as a normal life? And that's what we're doing. And that's how we will continue to do. We are located in a very, very good location, like they say in real estate, location, location, location, where the south of the Northern Border, as south as can be from, if there is going to -- if there is potentially, there are things that happen. We're not an ostrich. We don't have our head in the sand. But we're right in that area. That's in the middle of the 2 areas, the north and the south, with -- as north as possible from the Southern Border, and as south as possible from the Northern Border in terms of tranquility. And that's where we are right now. Like, as I mentioned, we're not an ostrich that, you know, where there's HFC with safety, safety, safety is our concern. Just like insurance, you prepare yourself for that one in a whatever 1,000, 10,000 that can happen. Zion, you know, our company, we do whatever has to be done. We brought all the facilities that need to be. If something happens there, we've trained all our rig crew and everyone is aware of what has to be done. You know, Israel, I don't think, I don't know if we're that popular today. I think we're more popular than that's presented in the news and everything as such. But even at any more time in our history, we appreciate our true friends. And there are, personally, from my and all of our experiences here, our loyal, steadfast shareholders, you are our true friends. We're all sitting here. We're allowed to be here because of you. And these aren't just words. In actuality, every day brings us through all the hurdles and the challenges that you have, that we have, that we've all experienced in the past few years, be it COVID, be the security situation, on and on and on. Well -- that's in general, specifically as an exploration oil and gas company onshore in Israel, it's sevenfold and tenfold. And the authorities that we deal with, we're just -- we get in that door and we have no problem presenting what we have to present. We have people who are more than happy, more than willing, making that extra effort because they know who you are. They know that you are with us, they know that we will do the job, they know that we will use novel techniques which have never been used. You've seen the reports, even now that we're using the bounties with the proppant and everything such with other companies. And I can tell you, they call us other companies because they want to get information. And as much as we can do, we try to help other companies, but as long as it doesn't damage our company or anything as such, I don't want to go on and on. Thank you.

Thank you very much, Jeff. It's always good to have Jeff over on the Texas side. It allows him to pick up his cache of goodies from Amazon to bring back to Israel. So thanks for giving a kind of a brief overrun on it. Like Jeff said, the reality is Israel's open for business. It's a little bit slow to navigate around, understandably, when you have the state is in conflict right now. Everybody is prepared for the conflict. And it's open for business. A little difficult to get into. Obviously, you have to kind of reroute your plans, either going through Miami, New York or London, but you can get in and it's open for business. So thank you very much for the overview on that. And you have your slide, Mike? We'll give a brief overrun of the finances with Mike, and after that we'll go to the Q&A.

All right, thanks. Thanks, Rob; thanks, Monty and Lee and Jeffrey for follow-up. This section will be very brief. I'll reference that, all the numbers that I mention today are from our 10-Q that we filed in May the 8th for the first quarter. And we have approximately $2.1 million cash in the bank. At that time, we have raised approximately $2.8 million through our DSPP through the first quarter. That number gets bigger every day. Cash that we have in the bank, plus forecasted ins and outs, will carry us through approximately September. I wouldn't remember that month and year too closely. It changes all the time. Thank you to all those who invest and who pray. We would not be able to stand here in this building without your prayers and your investments. And I'm very, very, very optimistic about the things that I see every single day. We have a lot of active engagement with our investors. Our investors are growing in numbers. They're growing in their engagement with us, both large and small. We have a presence in Twitter, Facebook. Andrew Summey and his team do a great job. And I will tell you that we here at Zion, it's a family. There's a high sense of unity in what we do. And it's really, for me, this is -- it's a blessing to be here. Just one other point. Regarding our auditors, this coming October will be the sixth year anniversary dealing with them. We know them well. We have a good working relationship with them. Everything is quiet in accounting. That's good. No audit adjustments, no problems, no restatements, nothing of the sort. We've got a good team. And that's all I want to say, other than thank you very much, and God bless you all.

Thank you very much, Michael. Okay. So, in essence, that kind of concludes the operation or geological report, my report, and it's going to kind of roll into the Q&A session of it. So with that being said, we can go ahead and get into the Q&A, but prior to the Q&A, I just wanted to -- you know, I can't thank you guys enough on the prayers that come in. It really means a lot to our staff here in Israel. It means a lot to our staff here in Dallas. It's not your typical company, it's not a typical operating environment that we're in. We're in a difficult area and we have a passion, a vision and a belief that we're going to fulfill this. And if it wasn't for the interaction and just the contact that we get from everybody in the public, it's tough to manage. But you guys, with what you guys send in prayer, just emails that come in, you know, the Israeli office, they take it to heart, like this is -- you know, it means a lot to us to see how many eyes and ears are on us on a positive note and just wanting to make sure that we're doing -- we're being safe, everybody's in one piece, et cetera. I mean, I can't -- there is really no word that I could use other than thank you, and say in Hebrew from here, toh-dah. So, just, you know, once again, the support that you guys bring to the organization and being aligned with everybody out there really does make this a great place to work. And it doesn't feel like work, it feels like we're going in and we're working on the vision of the company. So that being said, thank you once again, and we'll go ahead and hit the Q&A section.

Yes, we have some good questions coming in already, so I'm going to just go in. I'll try to get to as many of these as possible. Feel free to ask your questions in the Q&A button. Some of the questions, if it's something that's very, very specific to you, then we will -- our IR team will reach out to you and answer that question. The first one is from Jeffrey Buck. If MJ #1 is successful with a new technology and methodology, is it possible that MJ 2 could be retested in the future as well?

Very well. As we see technology changes pretty rapid in the oil and gas industry and as we're cementing relationships with the Ministry of Energy in Israel, we're educating them on the new processes that are happening in North America, specifically Texas, on secondary and tertiary recovery methodology. And as they endorse these and become more familiar with it, it's easier for us to apply these technologies in the environment we're in, in Israel. So, you know, there, I don't discount anything. Obviously, I'm in the oil and gas industry and I'm an optimist. You have to be in order to work in the industry. So, I really think that there is potential, and there's -- with the tremendous data that we acquired from the drilling operation on MJ 2, a better understanding of the full network, because it is extremely complex. It's not your benign formations that we see here. I do think there's high potential on it, and it's something that we can look at. The other benefit, too, is there's inventory that's been identified within striking distance of our current ad sites. So we're modeling on a go forward basis of best industry practices, limited footprint, being custodians of the environment, and understanding that the valley that we're in is a very special valley, and we want to limit our footprint on there, but maximize the return for us as an organization and a shareholder. Great question.

The next one is from Eric Thomas in Indiana. It's actually -- I'm going to go ahead, and since he came up, he's sent in some questions ahead of time. He's asking live. There's threefold. One is, this may be real quick for you, and the other 2 for Jeff. Is the rig crew being mobilized for the MJ 1 recompletion project, the same crew that drilled MJ 2?

Yes, the rig crew is, and these guys are outstanding. They've been with that rig since the birth of that rig, and we wouldn't have any better guys to run that rig. So they know every single nut and bolt on that thing. It's very odd to have a rig crew that's very passionate about it. And a lot of -- you know, it's kind of the UN out there with the rig crew, as far as Romanians, Hungarians, Croatians, just go down the list. But it is their baby. And we will continue to procure that group. And they specifically request to come work for us in Israel. So most people will be a little skeptical going into an area of conflict, but these guys, they want to be there, and it's a great crew. You don't want anybody rock riding that route, but that crew, period.

And Jeff highlighted this a bit. But I think you can maybe go into, because this comes from a lot of our shareholders, is that there have been multiple reports since October 7 of rocket attacks of Northern Israel from Lebanon. Can you speak to the proximity of these attacks relative to our drilling pad?

First of all, you saw Lee's that he showed before, we're to the east, very close to the proximity, probably maybe a kilometer or 2 from Jordanian border. And as you build up north, that's to the [indiscernible] Golan Heights, and from the west, from the north, from that Golan Heights to the west, to the Mediterranean, that's the border with Lebanon. And of course, you all know where the Sea of Galilee is. And just south of the sea -- remember, south of the Sea of Galilee by -- I think the easiest way to say it is by car, probably an hour ride for those that drive safely, and south of the Galilee, there has been no incidents at all. I think, I can say zero incidents. Even from the north of the Galilee, the Sea of Galilee, there haven't been in that area, again, to the east, incidents. Most of them are the border of Northern Israel. And that's where it is right now. And I know, actually, if you want to say that now we rented rooms for our crew, they're back in the same kibbutz where it was. And going back to how normal Israel is, it is very busy right now. It was actually much more difficult to get rooms. Those communities that are for the far north of the country, and even some that are to the far south, some of them were relocated to the area where we are right now. So, things are bustling, and so that's where we are right now. But it's very -- in terms of what's happening, no incidents.

And then the final question he asked is, can you speak to the cost of the new exploration license?

The cost of the exploration license...

Like my guess is that how much did it cost to actually get that license approved by the government? Do we have an estimation?

Probably a few years from route in my life, just starting to [ go after that ]. But in terms of the expense, I don't think it was an extra expense. There was perhaps an -- yes, there were extra expenses, mostly time we have our consultants who assist us. We reach to the highest echelons of the government to make sure that we can accelerate and expediate the process and everything as such, but not anything fundamental or major in terms of achieving this, more in time, in expertise, and knowing -- like any country, knowing who to speak to, get that phone call.

Thank you. And the next one is from Brady, our friend up in Canada. And this is for Monty. Monty, if you're able to unmute yourself. What is the strategy in waiting to see if the MJ 1 will naturally flow instead of immediately under-balancing the well with nitrogen to maximize the potential flow rate?

Yes. Thank you, Brady. The main reason is simply because of the data value of the natural flow. If we can understand the pressures downhole and we can probably touch upon this, the more we can understand about the reservoir and the calculations as to what could potentially reside in that reservoir. If we immediately jump into under-balancing, we would lose a lot of that critical data and analytics towards understanding the reservoir.

All right. And another one by Jeff Buck. Why still existing perforated holes in the MJ 1? If the new methodology is successful, couldn't that allow hydrocarbons to flow through the existing holes?

Yes, that's a good question there, too. The easiest way to understand it is if you could kind of think about a pressure washer. If you use the nozzle where the water goes out in a straight line under a lot of pressure, that water can strip off metal, it can punch holes. It's under a lot of pressure now versus, say, like a spray setting where the water can go in a lot of different ways, but not under pressure. But our main objective is pressure, and that's what we need in order to succeed. So the fewer places that the proppant has to go, the better chance we have at breaking up the rock. So that's kind of the easiest way to do it. And it's a secondary as well. We need to hold the backside pressure in order to properly stimulate this well. And if there's lots of different areas for this energy to escape, we're not going to have control over the process. So it's very important that we close those holes off and create new ones. And if we're successful, the few holes that we do have now will be enough to bring in the hydrocarbons.

Thank you, Monty. You know, just kind of ride the coattail to what Monty was saying, you know, when you kind of use a quick thing where you have more of a rifled approach to what we're doing versus a shotgun approach down the wellbore, we really want to focus on these zones identified because once again, it's a very complex fractured fault area. And I think the more we can isolate and zone in on certain areas, the more success we're going to have with it. There is the ability -- a multilevel production with this. We do have multiple zones, kind of like Monty had mentioned in his ops report there, where we have a third option, almost. So having it open at onetime doesn't allow us to get the data that we need to get down hole. And I think when we stay laser focused on it, we're going to answer some more questions that we have and hopefully be able to have this stuff come up to the surface.

All right. And we have a question from Gabe Fontenot. When the testing -- when testing the MJ 1 with the new technology, what are the metrics needed in order for the company to ensure that the well is now viable?

It's a great question. I mean, one of the benefits with the size of our organization is we don't have the conventional overhead that comes with E&P. We just don't -- we don't have the huge staff. We don't have the stuff that typically bogs a company down where they need to have 10,000 barrels a day or whatever. And we're going to call this well successful for that company. We -- we're going to prove this up. It's proof of concept on this. And when we do have production with this well, albeit 200 barrels a day, 500 barrels a day, whatever, you know, we can get this well to produce that. At that point, we start to prove up the field. So on the true exploration side of it, this is a single analogy. We have to start building off this. We do have the data set that we acquired the 3D, 72 square kilometers. We have inventory picked on this. It allows us to kind of start mapping volumetrics potentially on this. And from there, I mean, we can call it, well, a success when we have hydrocarbon to the surface. And that's going to allow us to really focus on the zones that we know can produce in the region and how big those zones are with additional wells being drilled, at that point, we'll go into development. And from development, you move on bigger and better things. So could be from long, long answer for a short question. But the benefit of us being the size we are is we don't need much to get to the surface.

And this is a question. Well, it's not a question, it's a statement by Justin Miller. He says, great job, Zion. Keep up the great work. The mission will be fulfilled in Jesus name, so.

Thank you.

Thank you. This -- we have 2 questions from Jim. I'm going to try to combine these. Jim Benhart. One is, what are our future drilling plans, I believe, beyond this MJ 1 reentry? And have we looked at laser perforations and options? So let's start with those 2. And then he has a question of, in the past we've had stock manipulation, are we doing anything about that kind of thing? So maybe we can answer the first 2 is future drilling plans and are we using a laser perforation or have we thought about that ever?

All right. So just, you know, let's go on to question 1 there on the future drilling plans. You know, I think everybody is cognizant that the only way for us to become successful and mobile within Israel, within our license, is vertical integration as a company. So with the contributions from the shareholders, we're able to acquire the rig. That's the first and foremost, because it would take on average 18 months for us to get a rig in the past. We utilize that. We utilize the capabilities of that rig. The G&G team, Dr. Russell and Nadav over in Israel, they have picked inventory that we can bring in after this. Well, we're going to mobilize the rig to the new location or potentially do a kick out off the same pad. So we're always constantly looking into the future on this. And the way to do it successfully for us is through our vertical integration of owning our own rig. Moving forward like that, we're able to be a little bit more nimble on it, more reactive to the fluid environment that we work. Question number 2, I already have a shorter things to expand, apparently.

Yes, just the laser perforation options.

Yes, there's a lot of really, I guess, for lack of a better word, sci-fi technology out there. And there is application specific regions that, that stuff works. And it's -- we're constantly on the edge of cutting edge. And I've always been a proponent that I like cutting edge. What I don't like is bleeding edge. And if we can see stuff that's proved up and it's gone through the beta phase to the full -- full shop phase, we definitely entertain it. If it, one, is more cost effective; 2, we're able to get it inside the state of Israel with approvals, we're going to go for it. I mean, this is a fantastic area of the state of Texas for stuff on the new proving ground. And I think we -- there is no plagiarizing new technologies in the state of Texas because everybody's on it real quick once it works. Once it's showcased and works, and that's what we're going to do. We're going to continue to pull technologies from the U.S. into Israel. And then stock manipulation, that's a really easy one to answer. It's a free market. It's the capitalist society we work in and there's no -- people make cottage industries out of it. I think that, you know, everybody is competent and capable of reading. And then we saw the other day with GameStop, once again, it's just the inherent nature within publicly traded companies that, you know, we have checks and balances on a federal level with certain regulatory bodies and stuff that are supposed to keep an eye on it. But, you know, there's not much you can do as a public company to -- to prevent that. You're going to have people that have nefarious actions out there that -- that want to do it. I mean, it's -- you know, if you do have intervention with your stock, you're riding kind of a gray line there on our side. I mean, the free market will write itself, it will correct itself on it. So that's kind of a tough question to answer, but there's not much we can do other than let the market do its corrections.

And then we have another one by Jeffrey Buck. He says, if I remember correctly, one of the challenges with the former drill rig used for the MJ 1 was a slight bend in the wellbore. So is that less of a concern with the new drill rig?

Absolutely. The drill rig that we own -- that you all own is much stronger. It's [ as a can ] rig top drive on it, it's just a more capable rig, right. So if we want to go directional with that rig, we can go directional. If we want to do a kick out on that, we can do a kick out on it. The rig is a way better platform than what we've had the availability in the past, and it's inherent in the country. One of the other onshore groups was using that rig that we had used last, and I think they gave up after the seventh sidetrack. So we know what our rig is capable of, we know what our crews are capable of, we know what the inventory and products that we bring into the country are capable of. And it really allows us to a lot more time to downhole. And I'm proud that we own that rig.

And a question from Gabe Fontenot and Justin Miller. They basically asked the same question is that if our share price gets up to the -- back up to a more recommended level, would we consider relisting on a different market like such as NASDAQ or New York Stock Exchange?

That's an excellent question. We're always going to look out for the best for everybody here. And I think when we get to that level again, we're going to review the big boards. I think that either big board you look at, there's one that's more geared for technological companies, more techie companies, and then one that's more geared for what we are, an oil and gas producer exploration company. So, when that time arrives, we are going to do that. You know, Martin is instrumental in that, we continually stay to the standards of the big boards currently in preparation for the migration to those when that day arrives. So it's -- we haven't kind of sat on our laurels or anything like that. It's the fact that we're constantly following the regulatory environment as if we were still on that exchange and we're going to be back on, pending success, and I think that when we do have that opportunity afforded to us, we're going to make a logical decision for what board makes the most sense for us.

All right. We're approaching 10:30. Do you have any final comments or...

No, I was surprised with no more questions. We must have done all right with the presentations.

We try to anticipate a lot of the questions ahead of time. So hopefully that -- we did that, so...

You know, once again, thanks. I mean, just thanks for the Board that we have here that we've been blessed with. Pandji in from Indonesia, Brad Dacus in from the West Coast somewhere, Jeff from Israel. So, we have a -- thank you guys for taking the time on the proxy that we voted for. It's, you know, Sarah over in Switzerland, Virginia, Paul, I go down the list. You know, it's a decent list. But it's because of the interaction and your guys’ ability to go through the proxies, read the information that's put out that we have a true independent board here that's competent and capable and adds a tremendous amount of value. And it's great to work with these individuals with the level of independence. We're 70-plus percent independent on our board here. So being able to have questions from the independence keeps checks and balances in place for us. And it's because of you all that takes time to vote that allows us to have a board of this diversity and it really helps us and a great group of people with vast knowledge that's from oil and gas to accounting, you name it, we have it covered. So lots of [indiscernible]. With that being said, our program for today is concluded and once again, thank you all for attending today's meeting here, the annual meeting. And hopefully next year we can do our annual and we're obviously on the rig site next year showing the success that we're going to have this year. So continue the prayers for us, continue the prayers for the Israeli staff, the nation Israel, and thanks very much.