Company: ZNOG
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001437749-25-009623
Chunk: 615

Company: ZION OIL & GAS INC
Filing Date: 2025-03-27
Form: 10-K
Item: Item 4
Chunk 615
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 occurred. The amount of any impairment is charged to expense since a reserve base has not yet been established. A further impairment requiring a charge to expense may be indicated through evaluation of drilling results, relinquishing drilling rights or other information.

Abandonment of properties is accounted for as adjustments to capitalized costs. The net capitalized costs are subject to a “ceiling test” which limits such costs to the aggregate of the estimated present value of future net revenues from proved reserves discounted at ten percent based on current economic and operating conditions, plus the lower of cost or fair market value of unproved properties. The recoverability of amounts capitalized for oil and gas properties is dependent upon the identification of economically recoverable reserves, together with obtaining the necessary financing to exploit such reserves and the achievement of profitable operations.

During the year ended December 31, 2024, the Company recorded $ nil in non-cash post-impairment charges to its unproved oil and gas properties. During the year ended December 31, 2023, the Company record a non-cash post-impairment charge to its unproved oil and gas properties of $135,000 (see Note 4).

The total net book value of our unproved oil and gas properties under the full cost method was $21,682,000 and $16,637,000 at December 31, 2024 and 2023, respectively.

Currency Utilized 

Although our oil & gas properties and our principal operations are in Israel, we report all our transactions in United States dollars. Certain dollar amounts in the consolidated financial statements may represent the dollar equivalent of other currencies.

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Valuation of Deferred Taxes 

We record a valuation allowance to reduce our deferred tax asset to the amount that we believe is likely to be realized in the future. In assessing the need for the valuation allowance, we have considered not only future taxable income but also feasible and prudent tax planning strategies. In the event that we were to determine that it would be likely that we would, in the future, realize our deferred tax assets in excess of the net recorded amount, an adjustment to the deferred tax asset would be made. In the period that such a determination was made, the adjustment to the deferred tax asset would produce an increase in our net income.

Asset Retirement Obligation 

We record a liability for asset retirement obligation at fair value in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived assets.

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