Zion Oil & Gas, Inc. entered into a Memorandum of Understanding (MOU) with Viking Services BV (Viking) (a Netherlands private company), to contract for a land-based oil and gas rig with deep drilling capacity and certain other oilfield services and crew for exploration activities within Zion’s Megiddo-Jezreel License area in Israel.
Under the scope of work, Viking would provide their Rig 35, or a rig of similar capabilities with at least a 1,500 HP engine and the capability of drilling to a depth of 15,000 feet. The agreement would be for a two year term to drill two wells with an option to drill a third well. The parties anticipate a spud date for the first well (Megiddo-Jezreel #1) in the second half of 2015, subject to Zion securing full regulatory approval from the State of Israel and regional and local governing bodies.
After the primary term of the drilling contract, the parties may jointly establish Zion Drilling, Inc. (“Zion Drilling”), to initially lease and then possibly acquire and hold title to a drilling rig, either the rig under the primary term or a similar but deeper drill capacity rig. Zion Drilling’s stated business purpose would be to conduct drilling on Zion’s oil and gas licenses within the State of Israel and to the extent not so utilized, to lease out the rig for hire to other Israel-based drilling projects.