During current open hole wireline logging and subsequent reaming - cleaning the well bore - operations, the company encountered free-flowing hydrocarbons while circulating drilling mud.
“After making our first of three open hole logging runs, we decided to ream to bottom to clean the hole out in anticipation of our second logging run,” said chief operations officer Dustin Guinn.
“After circulating the well, we experienced a continued and significant increase in gas followed by clear evidence of oil in our circulated mud from the bottom of the well.”
Chief executive Victor Carrillo added: "I am ecstatic to see clear evidence of hydrocarbons (oil and gas) in the deeper portion of our Megiddo-Jezreel #1 well – a project that we have been working on for years.”
Zion confirmed it will now drill up to another 70 meters over the next couple of days.
Shares surged 87% to US$4.30 on Tuesday.