Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Litigation with GYP regarding rig demobilization fees.
• New Israeli regulations significantly increasing expenditures for exploration rights and drilling, requiring substantial bank guarantees and insurance policies.
• Environmental cleanup obligations related to well sites and other environmental restoration procedures.

Mitigation Strategies

• Vigorously defending against GYP's claim.
• Exploring various alternatives for raising additional capital.
• Addressing environmental obligations in accordance with guidance from the Environmental Ministry and local officials.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• SEC investigation
• Shareholder litigation
• COVID-19 pandemic impact on operations and capital raising
• Limited capital resources and operating losses
• Uncertainty regarding the recoverability of exploration costs
• New Israeli regulations increasing exploration costs and time
• Potential environmental liabilities

Mitigation Strategies

• Full cooperation with SEC investigation
• Hiring independent counsel to address shareholder claims
• Continuing business activities despite COVID-19 restrictions
• Seeking additional financing through equity and debt issuances
• Accruing for potential environmental liabilities (although amount is $0)

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Supply chain and/or logistics disruptions due to the COVID-19 pandemic, causing delays in obtaining necessary parts and labor for the MJ-02 well.
• Downhole obstacle in the form of heavy water influx from the upper zone inhibiting the potential flow of hydrocarbons from the lower zone in the MJ-02 well.

Mitigation Strategies

• Resumed testing operations at the MJ-02 pad site after procuring the necessary equipment and personnel (following a delay due to Jewish holidays).
• Plan to isolate and neutralize the heavy water influx by procuring a 4.5” packer and installing it below the heavy water zone and above the primary zone of interest in the MJ-02 well.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• The Israel-Hamas war impacting exploration program scheduling.
• Going concern qualification in financial statements due to recurring losses and limited capital.
• Difficulty obtaining new license areas.
• Limited liquidity and challenges raising capital.
• Maintaining OTCQB listing requirements.
• Impacts of the COVID-19 pandemic on drilling and capital raising.
• Uncertainties inherent in exploratory drilling activities.
• Volatility of oil and natural gas prices.
• Dependence on key personnel.
• Government regulations and permitting in Israel.
• Availability of equipment and qualified personnel.
• Potential impact of government regulations, adverse regulatory determinations, litigation, competition, uncertainty of reserve information and future net revenue estimates, property acquisition risks, industry partner issues, availability of equipment, weather and other factors.
• Increased Israeli governmental regulations and environmental requirements.
• Lack of diversification.
• Absence of proved reserves or current production.
• Potential decline in oil or natural gas prices.
• Currency fluctuations and inflation.
• Insufficient insurance coverage.
• Activism against oil and gas exploration and development.
• Economic risks (exchange rate fluctuations, royalty and tax increases, changes in Israel's economy).
• Legal risks (changes in Petroleum Law, new legislation, changes in laws affecting foreign companies, changes in governmental policies).
• Limitations on transfer of interests in petroleum rights.
• Dependence on limited contractors, equipment, and services in Israel.
• Dependence on Israeli licenses and permits, and new regulations requiring enhanced bank guarantees and insurance coverage.
• Environmental compliance issues.
• Unavailability or high cost of equipment, supplies, services, and personnel.
• Risks associated with information technology systems and security breaches.

Mitigation Strategies

• Working with international service providers despite the Israel-Hamas war.
• Considering various alternatives to remedy capital shortfalls (equity markets, debt markets, participation arrangements).
• Developing and maintaining good professional relations with oil field service providers.
• Monitoring the market and building service provider relationships to mitigate concentration risk.
• Maintaining insurance to protect against some losses.
• Regularly reviewing risks of loss and insurance coverage.
• Implementing security measures to protect computer systems.
• Addressing cybersecurity risks through a cross-functional approach.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Supply chain and/or logistics disruptions due to the COVID-19 pandemic, resulting in production delays, factory shutdowns, and high demand for spare parts.
• Increased expenditures associated with obtaining new exploration rights and drilling new wells due to Israeli regulations.
• Additional financial burdens due to Israeli Ministry requirements for cash reserves.

Supply Chain Management

Climate-Related Risks & Opportunities