Zion Oil & Gas Reports Continued Losses Amidst Exploration Efforts

TL;DR

ZNOGW is a pure-play exploration gamble with no revenue and mounting losses; avoid unless you're comfortable with extreme risk.

AI Summary

Zion Oil & Gas Inc. reported no revenue for the three and six months ended June 30, 2025, consistent with its exploration-stage status. The company posted a net loss of $3.167 million for the three months ended June 30, 2025, a slight increase from the $2.807 million net loss in the prior-year quarter. For the six months ended June 30, 2025, the net loss was $729,000, compared to $714,000 for the same period in 2024. Basic and diluted loss per share remained at $0.01 for both the three and six months ended June 30, 2025, and 2024. Key business changes include continued focus on oil and gas exploration in Israel, with no commercial discoveries to date. The company's strategic outlook remains centered on its Megiddo-Jezreel License, which expires on January 31, 2026, and the New Rehovot License, expiring on March 31, 2026. Risks include the highly speculative nature of oil and gas exploration, dependence on successful drilling, and the need for significant future capital, as evidenced by the $2,921,000 in cash used in operating activities for the six months ended June 30, 2025.

Why It Matters

For investors, Zion Oil & Gas's consistent net losses and lack of revenue underscore the high-risk, speculative nature of its exploration-stage business model. The company's reliance on future capital raises and the uncertain outcome of its Israeli licenses, expiring in early 2026, present significant competitive challenges against established energy producers. Employees face job security risks tied to the company's financial viability and exploration success. Customers are not directly impacted as there is no commercial product, but the broader market for energy exploration in politically sensitive regions like Israel watches for any significant developments, which could influence regional investment trends.

Risk Assessment

Risk Level: high — The company reported no revenue for the three and six months ended June 30, 2025, and a net loss of $3.167 million for the quarter, indicating a lack of commercial operations. Furthermore, the Megiddo-Jezreel License expires on January 31, 2026, and the New Rehovot License expires on March 31, 2026, posing significant operational continuity risks if not renewed or if no discoveries are made.

Analyst Insight

Investors should exercise extreme caution and consider this a highly speculative investment. Given the lack of revenue, consistent losses, and impending license expirations, potential investors should wait for concrete evidence of commercial discovery and a clear path to revenue generation before considering a position.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$3.167M

eps

-$0.01

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $0 — Revenue (No revenue reported for Q2 2025 or YTD 2025, indicating exploration stage.)
• $3.167M — Net Loss (Q2 2025) (Increased from $2.807M in Q2 2024, showing rising operational costs without revenue.)
• $729K — Net Loss (YTD 2025) (Slightly increased from $714K in YTD 2024, reflecting ongoing exploration expenses.)
• $0.01 — Loss Per Share (Consistent for both Q2 and YTD 2025 and 2024, reflecting stable share count despite losses.)
• January 31, 2026 — Megiddo-Jezreel License Expiration (Critical deadline for potential commercial discovery.)
• March 31, 2026 — New Rehovot License Expiration (Another key deadline for exploration activities.)
• $2.921M — Cash Used in Operating Activities (YTD 2025) (Significant cash burn for an exploration company with no revenue.)

Key Players & Entities

• Zion Oil & Gas Inc. (company) — filer of the 10-Q
• $3.167 million (dollar_amount) — net loss for the three months ended June 30, 2025
• $2.807 million (dollar_amount) — net loss for the three months ended June 30, 2024
• $729,000 (dollar_amount) — net loss for the six months ended June 30, 2025
• $714,000 (dollar_amount) — net loss for the six months ended June 30, 2024
• $0.01 (dollar_amount) — basic and diluted loss per share for Q2 2025
• January 31, 2026 (date) — expiration date of Megiddo-Jezreel License
• March 31, 2026 (date) — expiration date of New Rehovot License
• $2,921,000 (dollar_amount) — cash used in operating activities for the six months ended June 30, 2025
• Israel (country) — location of oil and gas exploration

FAQ

Risk Factors

• Significant Cash Burn [high — financial]: The company used $2,921,000 in operating activities for the six months ended June 30, 2025. This substantial cash burn, without any corresponding revenue, highlights the financial strain of exploration activities and the need for continuous capital infusion.
• Dependence on Drilling Success [high — operational]: Zion Oil & Gas Inc.'s success is entirely dependent on the outcome of its drilling operations. The company has made no commercial discoveries to date, meaning future viability hinges on finding commercially viable oil and gas reserves.
• Need for Future Capital [high — financial]: As an exploration-stage company with no revenue, Zion Oil & Gas Inc. requires significant future capital to fund its operations, exploration activities, and potential development. Failure to secure adequate funding could jeopardize its continued existence.
• License Expiration Deadlines [medium — operational]: The Megiddo-Jezreel License expires on January 31, 2026, and the New Rehovot License expires on March 31, 2026. These impending deadlines create pressure to achieve exploration milestones and potential discoveries within a limited timeframe.
• Speculative Nature of Exploration [high — market]: The oil and gas exploration industry is inherently speculative. There is no guarantee that any exploration efforts will result in the discovery of commercially viable reserves, making investments highly risky.

Industry Context

The oil and gas exploration sector is characterized by high risk and high reward, with significant capital investment required for exploration activities. Companies in this stage often operate at a loss until commercial discoveries are made and production commences. The industry is subject to volatile commodity prices and complex regulatory environments.

Regulatory Implications

Zion Oil & Gas Inc. operates under regulations pertaining to oil and gas exploration and environmental standards in Israel. Compliance with these regulations is crucial, and any changes or stringent enforcement could impact operational costs and timelines.

What Investors Should Do

1. Monitor License Expiration Progress
2. Assess Capital Raising Needs
3. Evaluate Exploration Success Metrics

Key Dates

• 2026-01-31: Megiddo-Jezreel License Expiration — This is a critical deadline for Zion Oil & Gas Inc. to demonstrate progress or make a commercial discovery on this license area.
• 2026-03-31: New Rehovot License Expiration — Another key date for the company's exploration activities, indicating the timeframe within which results are expected.
• 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q, showing continued net losses and operational cash burn.

Glossary

Exploration Stage

A phase in the lifecycle of an oil and gas company where it is actively searching for reserves but has not yet established commercial production. (Zion Oil & Gas Inc. is in this stage, explaining the lack of revenue and significant operating expenses.)

Net Loss

The total expenses of a company exceed its total revenues over a specific period. (Indicates the company's current financial performance, showing ongoing costs without revenue generation.)

Loss Per Share (LPS)

The portion of a company's profit or loss allocated to each outstanding share of common stock. (Shows the per-share impact of the company's net loss, which remained stable at $0.01.)

Cash Used in Operating Activities

The net amount of cash used by a company for its core business operations during a period. (Highlights the company's cash burn rate, which was $2,921,000 for the first six months of 2025.)

Year-Over-Year Comparison

For the three months ended June 30, 2025, Zion Oil & Gas Inc. reported a net loss of $3.167 million, an increase from $2.807 million in the prior-year quarter, indicating rising operational costs. The year-to-date net loss also saw a slight increase to $729,000 from $714,000 in the same period of 2024. Revenue remained at $0 for both periods, consistent with the company's exploration stage. No new significant risks were explicitly detailed, but the existing risks related to exploration success, capital needs, and license expirations remain paramount.

Key Financial Figures

• $0.01 — 9,197 shares of common stock, par value $0.01 per share. Table of Contents INDEX P

Filing Documents

• znog20250630_10q.htm (10-Q) — 1888KB
• ex_823065.htm (EX-31.1) — 12KB
• ex_823066.htm (EX-31.2) — 12KB
• ex_823067.htm (EX-32.1) — 5KB
• ex_823068.htm (EX-32.2) — 5KB
• image_001.jpg (GRAPHIC) — 70KB
• 0001437749-25-025943.txt ( ) — 8664KB
• znog-20250630.xsd (EX-101.SCH) — 59KB
• znog-20250630_cal.xml (EX-101.CAL) — 37KB
• znog-20250630_def.xml (EX-101.DEF) — 349KB
• znog-20250630_lab.xml (EX-101.LAB) — 339KB
• znog-20250630_pre.xml (EX-101.PRE) — 375KB
• znog20250630_10q_htm.xml (XML) — 1988KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

– Financial Statements – Unaudited

Item 1 – Financial Statements – Unaudited Consolidated Condensed Balance Sheets – June 30, 2025 and December 31, 2024 1 Consolidated Condensed Statements of Operations for the three and six months ended June 30, 2025 and 2024 2 Consolidated Condensed Statement of Changes in Stockholders ' Equity for the three and six months ended June 30, 2025 and 2024 3 Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2025 and 2024 5 Notes to Consolidated Condensed Financial Statements 7

– Management ' s Discussion and Analysis of Financial Condition and Results of Operations

Item 2 – Management ' s Discussion and Analysis of Financial Condition and Results of Operations 35

– Quantitative and Qualitative Disclosures About Market Risk

Item 3 – Quantitative and Qualitative Disclosures About Market Risk 44

– Controls and Procedures

Item 4 – Controls and Procedures 44

— OTHER INFORMATION

PART II — OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 45

– Risk Factors

Item 1A – Risk Factors 45

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 45

– Defaults upon Senior Securities

Item 3 – Defaults upon Senior Securities 45

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 45

– Other Information

Item 5 – Other Information 45

– Exhibits

Item 6 – Exhibits 46 Exhibit Index 46

SIGNATURES

SIGNATURES 47 i Table of Contents Zion Oil & Gas, Inc. Consolidated Condensed Balance Sheets as of June 30, December 31, 2025 2024 US$ US$ thousands thousands (unaudited) Current assets Cash and cash equivalents 8,605 2,272 Cash and cash equivalents – restricted 1,080 1,064 Prepaid expenses and other 368 567 Governmental receivables 175 19 Loan due from related party (see note 2G) 23 - Other receivables 16 8 Total current assets 10,267 3,930 Unproved oil and gas properties, full cost method (see Note 4) 26,585 21,682 Property and equipment at cost Drilling rig and related equipment, net of accumulated depreciation of $ 3,167 and $ 2,807 (see note 2I) 4,473 4,778 Property and equipment, net of accumulated depreciation of $ 729 and $ 714 98 104 4,571 4,882 Right of Use Lease Assets (see Note 5) 708 759 Other assets Assets held for severance benefits 600 541 Total other assets 600 541 Total assets 42,731 31,794 Liabilities and Stockholders' Equity Current liabilities Accounts payable 1,273 604 Insurance financing (see note 6D) 176 490 Lease obligation – current (see Note 5) 109 107 Asset retirement obligation 571 571 Accrued liabilities 828 456 Total current liabilities 2,957 2,228 Long-term liabilities Lease obligation – non-current (see Note 5) 572 637 Provision for severance pay 608 548 Total long-term liabilities 1,180 1,185 Total liabilities 4,137 3,413 Commitments and contingencies (see Note 6) Stockholders' equity Common stock, par value $ .01 ; Authorized: 1,600,000,000 shares at June 30, 2025: Issued and outstanding: 1,109,567,465 and 965,362,131 shares at June 30, 2025 and December 31, 2024, respectively 11,096 9,654 Additional paid-in capital 325,165 312,629 Stock subscription receivable ( 179 ) - Accumulated deficit ( 297,488 ) ( 293,902 ) Total stockholders' equity 38,594 28,381 Total liabilities and stockholders'

View Full Filing

View this 10-Q filing on SEC EDGAR