“Let me tell you something that we Israelis have against Moses. He took us 40 years through the desert in order to bring us to the one spot in the Middle East that has no oil!”
– Golda Meir
Revenues of the publicly-traded exploration company, Zion Oil [NASDAQ: ZN], have suffered in recent years. More specifically, they have been $0. Mostly because they haven’t produced any oil.
Zion is one of the many bizarre stories to sprout from the weird relationship between Southern fundamentalists and right-wing Israelis. It was founded by a born-again alcoholic (why do we keep seeing that pattern) named John Brown who recognized the obvious Biblical message that God had placed large crude oil reserves in Israel.
You missed that verse in the Bible? You aren’t reading it closely enough. It’s there, trust me. And it tells them exactly where to drill. Exactly.
The company is based in, you guessed it, Texas.
Zion is following a different pattern from the many previous ventures in the same vein. Brown has built an actual, bono-fide company with real geologists, a real-life board of directors, accountants, and even a public offering. Unfortunately for Brown, it’s all that realness that might eventually put company officials at real risk of real jail, unlike the previous hucksters who have travelled this road unscathed.
The company held an IPO at the end of 2006 and still carries a market cap at around $100m, about half what it was a year ago. By going public Zion is exposed to the full range of US laws regarding transparency and fraud. The company regularly issues press releases hyping it’s progress. The releases sometimes include reference to their divine inspiration for the effort, which may ultimately provide a crucial shield from securities fraud liability.
Faith-based drilling and the Securities Acts of ’33 & ’34 make an awkward combination. Had Brown used private placements or bonds to fund his start-up then he could make pretty nearly whatever claims he wanted. But by availing himself of the publicly regulated markets he has set the company up for higher scrutiny should his Biblical interpretation turn out to be, well, a little off-base.
The company is being promoted by none other than the Duke of Armageddon himself, Hal Lindsey, who is also an investor. They are also getting pulpit support from fundamentalist pastors like John Hagee and the fundamentalist website, WorldNetDaily. Even Don McElroy, rabid fundie and outgoing head of the Texas State Board of Education is reportedly an investor. That’s what a belief in a 6000-year-old Earth will do for you.
When the money finally runs out and the fingers start pointing, many of those fingers will be attached to attorneys. It will be very interesting to see how Zion Oil’s explicit religious focus will affect the likely claims from investors. It’s not fraud, as George Costanza might explain, if you genuinely believe what you are telling people.
Meanwhile, in 2009 a conventional oil company, Houston’s Noble Energy, though entirely lacking Brown’s God-given insights, found a potentially massive gas reserve in deep waters off the Israeli coast. Maybe they just have a better Bible, or prayed real good, or perhaps even a held a silly belief that tiny invertebrates buried in ancient seas were pressed down over tens of millions of years to form a magical substance. But no fool would believe that crap. It must have been their prayers.
It’s going to be tough for the Zion investors to watch the heathen prosper and see Israel begin reaping a hydrocarbon bonanza without them. But they may at least be comforted by the fundamentalists’ faith in Israel’s certain, imminent destruction at the hands of a combined army of Russians and Muslims – according to Lindsey all the coolest villains are on their way.
It all works out in The End.
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