v3.26.1
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Earnings Per Share, Policy [Policy Text Block]

A. Net Loss per Share Data 

 

Basic and diluted net loss per share of common stock, par value $0.01 per share (“Common Stock”), is presented in conformity with ASC 260-10 “Earnings Per Share.” Diluted net loss per share is the same as basic net loss per share for 2026 as the inclusion of 28,956,325 in stock options and 189,846,035 in warrants would be anti-dilutive.

 

Diluted net loss per share is the same as basic net loss per share for 2025 as the inclusion of 31,711,325 in stock options and 17,676,754 in warrants would be anti-dilutive.
Use of Estimates, Policy [Policy Text Block]

B. Use of Estimates 

 

The preparation of the accompanying unaudited consolidated condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of expenses. Such estimates include the valuation of unproved oil and gas properties, deferred tax assets, asset retirement obligations, borrowing rate of interest consideration for leases, accounting and legal contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, political instability and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated condensed financial statements in future periods.

 

We have made estimates as to the potential impact the Israel-United States-Iran war, Israel-Hezbollah war, and the Israel-Hamas war may have on our operations. Actual results may differ from these estimates.
Oil and Gas, Accounting Method, Full Cost or Successful Efforts [Policy Text Block]

C. Oil and Gas Properties and Impairment 

 

The Company follows the full-cost method of accounting for oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized.

 

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from continuing operations before income taxes, and the adjusted carrying amount of the proved properties is amortized on the unit-of-production method.

 

 

 

The Company’s oil and gas property represents an investment in unproved properties. These costs are excluded from the amortized cost pool until proved reserves are found or until it is determined that the costs are impaired. All costs excluded are reviewed at least quarterly to determine if impairment has occurred. The amount of any impairment is charged to expense since a reserve base has not yet been established. Impairment requiring a charge to expense may be indicated through evaluation of drilling results, relinquishing drilling rights or other information.

 

Currently, the Company has no economically recoverable reserves and no amortization base. The Company’s unproved oil and gas properties consist of capitalized exploration costs of $33,199,000 and $27,673,000 as of June 30, 2026 and December 31, 2025, respectively.
Fair Value Measurement, Policy [Policy Text Block]

D. Fair Value Measurements 

 

The Company follows Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures,” as amended by Financial Accounting Standards Board (FASB) Financial Staff Position (FSP) No. 157 and related guidance. Those provisions relate to the Company’s financial assets and liabilities carried at fair value and the fair value disclosures related to financial assets and liabilities. ASC 820 defines fair value, expands related disclosure requirements, and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

 

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows:

 

 

●

Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

 

 

●

Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and

 

 

●

Level 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

 

The Company’s financial instruments, including cash and cash equivalents, other receivables, prepaid expenses and other, Government receivables, accounts payable and accrued liabilities, are carried at historical cost. At June 30, 2026, and December 31, 2025, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Share-Based Payment Arrangement [Policy Text Block]

E. Stock-Based Compensation 

 

ASC 718, “Compensation – Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated condensed financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
Warrants [Policy Text Block]

F. Warrants 

 

In connection with the Dividend Reinvestment and Stock Purchase Plan (“DSPP” or the "Plan") financing arrangements as further described in Note 3, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are stand-alone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded and accounted as a part of the DSPP investment as additional paid-in capital of the common stock issued. All other warrants are recorded at fair value and expensed over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 3E and 3F.

 
Related Parties [Policy Text Block]

G. Related parties 

 

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management, or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties are recorded at fair value of the goods or services exchanged.

 

A hardship loan of $30,000 was given to an executive vice president in March 2025 with the stipulation of monthly repayments of $2,500 beginning in April 2025. All of monthly repayments were collected as of March 31, 2026 and no balance remains. Zion had no other related party transactions during the period ended June 30, 2026

 
Prepaid Expenses [Policy Text Block]

H. Prepaid Expenses 

 

The Company makes prepayments for various types of goods and services, including, but not limited to, operational and logistics costs, insurance, professional subscriptions, licenses and other fees.
New Accounting Pronouncements, Policy [Policy Text Block]

I. Recently Adopted Accounting Pronouncements   

 

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures under topic 740 to increase transparency for investors. Key changes include more detailed rate reconciliations, disaggregation of taxes paid by jurisdiction, and increased disclosure of income before taxes. The effect of this ASU became effective for fiscal years beginning after December 15, 2024. Zion adopted this ASU effective January 1, 2025.  The adoption of this ASU did not have any impact on its consolidated financial statements.

 

Other Recent Accounting Pronouncements

 

The Company does not believe that the adoption of any recently issued accounting pronouncements had a significant impact on our consolidated condensed financial position, results of operations, or cash flow.
Oil and Gas, Cost Incurred [Policy Text Block]

J. Depreciation and Accounting for Drilling Rig and Related Equipment

 

In March 2020, Zion purchased an onshore oil and gas drilling rig, drilling pipe, related equipment and spare parts for a purchase price of $5.6 million in cash, inclusive of approximately $540,000 allocated to spare parts and $48,000 allocated to additional separate assets. The value of the spare parts and separate assets are captured in separate ledger accounts, but reported as one line item with the drilling rig on the balance sheet. Zion determined that the life of the JB-1 drilling rig is 10 years (the rig was acquired as the “I-35 rig”, but renamed in 2026 in honor of our late founder, John Brown). Zion is depreciating the rig on a straight-line basis.

 

Zion uses the First In First Out (“FIFO”) method of accounting for the spare parts, meaning that the earliest items purchased will be the first item charged to the well in which the spare parts get consumed.

 

It is also noteworthy that various components and systems on the rig will be subject to certifications by the manufacturer to ensure that the rig is maintained at optimal levels. Per standard practice in upstream oil and gas, each certification performed on our drilling rig increases the useful life of the rig by five years. The costs of each certification will be added to the drilling rig account, and our straight-line amortization will be adjusted accordingly.

  

During the six months ended June 30, 2026 Zion added approximately $1,302,000 in costs associated with its drilling rig, approximately $372,000 in rig spare parts and approximately $556,000 in other drilling assets, for total combined additions of $2,230,000. We also recorded approximately $240,000 in self-consumption of rig spare parts.

 

See the table below for a reconciliation of the rig-related activity during the period ended June 30, 2026:

 

JB-1 Drilling Rig & Associated Equipment:

 

  

Six Months Ended June 30, 2026

 
  

JB-1

  

Rig

  

Other

     
  

Drilling

  

Spare

  

Drilling

     
  

Rig

  

Parts

  

Assets

  

Total

 
  

US$

  

US$

  

US$

  

US$

 

Gross Assets:

  thousands   thousands   thousands   thousands 

December 31, 2025

  6,700   1,007   969   8,676 

Asset Additions

  1,302   372   556   2,230 

Asset Disposals for Self-Consumption

  -   (240)  -   (240)

June 30, 2026

  8,002   1,139   1,525   10,666 
             

Accumulated Depreciation:

                

December 31, 2025

  3,172   -   349   3,521 

Asset Depreciation

  374   -   127   501 

June 30, 2026

  3,546   -   476   4,022 
             

Net Assets

  4,456   1,139   1,049   6,644 

 

  

As of December 31, 2025

 
  

JB-1

  

Rig

  

Other

     
  

Drilling

  

Spare

  

Drilling

     
  

Rig

  

Parts

  

Assets

  

Total

 
  

US$

  

US$

  

US$

  

US$

 

Gross Assets:

  thousands   thousands   thousands   thousands 

December 31, 2024

  6,495   747   343   7,585 

Asset Additions

  205   312   626   1,143 

Asset Disposals for Self-Consumption

  -   (52)  -   (52)

December 31, 2025

  6,700   1,007   969   8,676 
             

Accumulated Depreciation:

                

December 31, 2024

  2,538   -   269   2,807 

Asset Depreciation

  634   -   80   714 

December 31, 2025

  3,172   -   349   3,521 
             

Net Assets

  3,528   1,007   620   5,155