They say an oilman has to be a gambler, but can he be a prophet?
Zion Oil & Gas, based in Dallas, is a publicly traded company that believes it is commanded by the Bible to search for oil in Israel, both to help the Holy Land and make money for investors. The 22 employees of Zion Oil in Texas and Israel and many of its 30,000 investors believe the company is on a mission from God.
“God creates this. He provides the money and the place where to drill. Now why we haven’t got the oil yet, I don’t know. I have never drilled one oil well I didn’t expect to find oil,” says John Brown, Zion founder & CEO.
He’s a hulking, 73-year-old evangelical Christian who went to Israel, had a religious experience, came back and sold his business in Michigan, then started Zion with no prior experience in the oil industry.
He sits in Zion’s Dallas office, with a picture on the wall of him kissing Jerusalem’s Western Wall, part of the ancient Jewish Temple.
“I was an alcoholic that God saved, took me from being in the tool business and sent me to Israel and told me he was gonna do something. Zion Oil & Gas was nothing. I didn’t even think about something like that at that point,” Brown says.
So Far, Dry Holes
Zion has so far drilled four wells in Israel, all of them dry holes, which is disappointing because in recent years wildcatters struck a huge natural gas field off the coast of Israel.
Moreover, an Israeli oil company, Givot Olam, which is also using the Old Testament as its inspiration, has discovered oil onshore in commercial quantities. Zion is still waiting for its prophetic payday.
“See Megiddo, here?” says Brown, pointing to a map of the Biblical Twelve Tribes of Israel. He’s showing where Zion wants to drill next. “That’s the head of Joseph, that’s the Jezreel Valley.”
Zion’s motto is “geology confirming theology.” Brown believes the Book of Deuteronomy alludes to an Israeli oil bonanza.
“He talks specifically about the land of Joseph and the blessings of the deep that lies beneath,” Brown continues. “It doesn’t say specifically oil, but there’s a huge possibility it could be, let’s put it that way.”
Never mind that three Old Testament scholars consulted for this report say the ancient Hebrew word in Deuteronomy is olive oil, not petroleum. Zion is undeterred in its mission.
Down the hall, geologist Lee Russell sits in a room surrounded by seismic maps of Israel. Russell spent 35 years working for major oil companies before coming to Zion. As a devout Christian, Lee shares the founder’s vision, but he checks it against modern geoscience.
“Wells should be drilled based on their scientific merit, pure and simple,” Russell says. “It just so happens that where I see the right geological ingredients coming together, they’re not in conflict with the blessing being on the head of Joseph.”
Seeking ‘Investors Of Faith’
Zion Oil is listed on the Nasdaq stock exchange. Since going public in 2000, the company has burned through $130 million. According to Morningstar, Zion’s stock has lost 90 percent of its value in the past five years.
Not surprisingly, Zion depends on “investors of faith,” people like Andy Barron, an orthodontist in Temple, Texas.
“Well, I used to have a lot more money in it than I do now. The stock I bought has tremendously decreased in value over time,” Barron says. “But with my belief that God is in charge of all of it and it’s all his anyway, I think the upside of betting on God is pretty good.”
A former Zion board member, who asked not to be named, was more blunt. Zion could find producible oil, he says, but it’s undercapitalized. The company doesn’t have enough money to drill enough wells in an expensive environment like Israel.
“I sold my shares two years ago,” he says. “I got impatient like some other [investors] did.”
Zion’s president, Victor Carrillo, a geologist and former chief oil and gas regulator in Texas, agrees that his company is an extremely risky investment.
“No one that I know of at Zion pushes, ‘Hey, you should invest in this company’, ” Carrillo says. “You have to convince yourself, or God has to convince you, that you should invest in this company.”
He says everything in Israel takes a lot longer. For instance, they have to import drilling rigs from Turkey, and a drilling permit that may take three days to obtain in Texas takes more than a year in Israel.
If the Israeli petroleum commissioner grants Zion a new drilling permit, which is expected, and if Zion can raise new revenue, the company hopes to drill its next deep well sometime in 2015. The question is whether Zion Oil & Gas can survive long enough to see if the prophecy is fulfilled.