Israel-focused Zion Oil & Gas has signed a memorandum of understanding with Netherlands-based Viking Services to secure a drilling rig ahead of spudding an exploration well on its onshore Megiddo-Jezreel licence near the border to Jordan.
The agreement also covers certain other oilfield services, as well as crew for exploration activities, and will see Viking supply a 1500 horsepower rig capable of drilling to depths of 15,000 feet.
Zion said the potential deal would run for two years and cover the drilling of two wells with the option for a third.
Zion expects to spud the first well, Megiddo-Jezreel-1, in the second half of the year, subject to it securing all required approvals.
The memorandum of understanding also lays out terms which could see the two companies jointly establish a drilling company to be named Zion Drilling.
The new company would initially lease and then potentially buy a drilling rig, which Zion said could be the rig it plans to use for its upcoming campaign or a similar but deeper capacity rig.