When it was disclosed late last week that Dallas-based Zion Oil & Gas was being investigated by the Securities and Exchange Commission, some observers may have wondered, “What took them so long?” That’s because, for nearly two decades now, Zion has raised millions of dollars from investors—$171 million, in fact—without ever having found any oil to speak of.
That’s seemed to be OK with the company, though, since its stated purpose is to drill exclusively in Israel in its aim to support that country’s “political and economic independence.” The fact that no energy company has extracted substantial amounts of oil in Israel proper also hasn’t seemed to faze Zion’s investors, many of them fundamentalist Christians and fervent supporters of Israel.
After drilling a series of dry holes over the years, Zion announced earlier this year that it had high hopes for its latest well, called Megiddo-Jezreel #1, in Israel’s Jezreel Valley. Zion says the SEC probe won’t interfere with expanded testing on that well, which is now underway. Zion’s M.O. is a “pretty big long shot,” one energy observer says. “It’s like praying for a miracle.” Which may be why the SEC is sniffing around, though the agency conducts all its investigations privately.