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Zion Oil
& Gas Newsletter
December
22, 2010
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion
As 2010
draws to a close, I have been reflecting on the past year and the progress that
Zion has made during the last twelve months..
A
philosopher once said: “A
journey of a thousand miles begins with a single step”.
At Zion
we have been steadily taking many steps, some small and some large, that we
believe, with G-d's help, will lead to success with our oil & gas
exploration efforts.
For
example:
(i) In
August, we began drilling operations on our Ma'anit-Joseph #3 well, in our
Joseph License area, onshore Northern Israel. As you can read below, we are
currently drilling at a depth of over 14,250 feet.
To put
that in perspective, the Empire State Building in New York City is 1,250 feet
tall, so the depth of the Ma'anit-Joseph #3 well is roughly equivalent to
stacking up eleven and one-half Empire State Buildings on top of each
other.
(ii)
During the past year, the following oil & gas professionals joined
Zion:
In
February, Bill Ottaviani joined the Company as our President and Chief Operating
Officer. Bill is a Petroleum Engineer who spent 25 years working for Chevron
Corporation. He is now also a Zion Board member.
In
September, Victor Carrillo, currently serving as Chairman of the Railroad
Commission of Texas, joined Zion as a member of our Board.
(iii) We
were successful in raising finance to fund our petroleum exploration efforts,
onshore Israel. In July we completed a rights offering for gross proceeds of
approximately $12.4 million and, most recently, last week we completed a rights
offering for gross proceeds of approximately $18.2 million. Below, you can read
Zion's press release regarding the rights offering that closed, last week, on
December 15th.
Personally,
I continue to be optimistic about the possibility of recovering hydrocarbons on
our license and permit areas, onshore Israel, especially due to the U.S.
Geological Survey report, published in April 2010, containing their assessment
that there may be 1.7 billion barrels of recoverable oil and 122 trillion cubic
feet of recoverable gas in the Levant Basin, as all of Zion’s exploration rights
fall within the area of the Levant Basin.”
Finally,
as we enter the holiday season and the conclusion of 2010, I want to thank you
for your support of Zion. Israel continues to be at the center of much world
news and, for many, close to the center of their heart.
"To those who understand there are no
questions and
to those who don't understand there are no
answers."
I wish
you and your loved ones much happiness and success in 2011 and I hope that the
year ahead will be the one that brings Zion Oil & Gas the success that we
have all been working towards.
.........................................................................
Here is
this week's operational update:
Drilling Operations at the
Ma'anit-Joseph #3 Wellsite
Dr.
Eliezer Kashai, Zion's Vice President – Israeli Exploration of Zion since
October 2000
holds
his painting of "The drilling rig at dawn at the Ma'anit-Joseph #3
wellsite"
On August
26, 2010, drilling operations began on the Ma'anit-Joseph #3 well, in our Joseph
License area, onshore Northern Israel.
During
the past several weeks, we have been steadily drilling an 8-1/2"
hole. Aside from routine bit changes due to normal wear and testing
of the blow out prevention (BOP) equipment, drilling has been proceeding without
interruption.
As of
Wednesday, December 22, 2010, we have achieved a depth of approximately 4,345
meters (14,255 feet). We will continue to drill an 8-1/2" hole to an
approximate depth of 4,500 meters (14,764 feet) at which point we will obtain
the next set of open-hole logs and set the next casing string. This will likely
occur within the next few days, before the end of this year.
Rights
Offering
On
December 15, 2010, Zion completed its rights offering; the gross proceeds were
$18,214,105.
A total
subscription for 3,642,821 Units was accepted (including all of the
over-subscription), where:
One ($5) Unit = One Share of Zion stock + One ($4) Warrant to purchase Zion
stock
The
Warrants are exercisable through December 31, 2012 at a per share exercise price
of $4.00.
Commencing
December 28, 2010, the ($4) Warrants will be listed on the NASDAQ Global Market
under the symbol ZNWAZ.
The
Common Stock will continue to be listed under the symbol ZN
Below,
you can read Zion's recent press release regarding the completed rights
offering.
"In
your good pleasure, make Zion prosper..."
Psalm
51:18
Thank you
for your support of Zion and Shalom from Israel
Richard
Rinberg
CEO of
Zion Oil & Gas, Inc.
www.zionoil.com
FORWARD LOOKING STATEMENTS: Statements
in this communication that are not historical fact, including statements
regarding Zion's planned operations, anticipated attributes of geological strata
being drilled, the presence or recoverability of hydrocarbons, the sufficiency
of cash reserves, ability to raise additional capital, timing and potential
results thereof and plans contingent thereon are forward-looking statements as
defined in the "Safe Harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward looking statements are based on assumptions
that are subject to significant known and unknown risks, uncertainties and other
unpredictable factors, many of which are described in Zion's periodic reports
filed with the SEC and are beyond Zion's control. These risks could cause Zion's
actual performance to differ materially from the results predicted by these
forward-looking statements. Zion can give no assurance that the expectations
reflected in these statements will prove to be correct and assumes no
responsibility to update these statements.
Contact
Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
More
information about Zion is available at www.zionoil.com or by contacting Mike
Williams at:
Zion Oil
& Gas, Inc. 6510 Abrams Rd., Suite 300, Dallas, TX 75231
telephone
1-214-221-4610
email:
dallas@zionoil.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Zion
Oil & Gas Completes Rights Offering
Dallas,
Texas and Caesarea, Israel – December 16, 2010: Zion Oil & Gas, Inc. (NASDAQ
GM: ZN) announced today
that on December 15, 2010 it completed its previously announced rights offering.
The preliminary outcome of the rights offering, as of the close of business on
December 15, 2010, indicates that subscriptions for approximately 3.65 million
units, for gross proceeds of approximately $18.25 million, have been received
(including over-subscriptions). All shareholders that requested
over-subscription shares will be awarded their full over-subscription
request.
Zion’s
Chief Executive Officer, Richard Rinberg, said today, “I am pleased to announce
the successful conclusion of our rights offering. The proceeds from this
offering provide us with the funds that we believe are necessary to allow us to
proceed with our planned drilling subsidiary, provide us with financial and
operating flexibility and enable us to further our exploration and drilling
program significantly.
We have
successfully drilled approximately two-thirds of our Ma’anit-Joseph #3 well and
are now drilling the final third.
We remain
excited about the possibility of recovering hydrocarbons on our license and
permit areas, onshore Israel, especially due to the U.S. Geological Survey
report, published in April 2010, containing their assessment that there may be
1.7 billion barrels of recoverable oil and 122 trillion cubic feet of
recoverable gas in the Levant Basin, as all of Zion’s exploration rights fall
within the area of the Levant Basin.”
Under the
completed rights offering, holders of record of Zion’s common stock were given
non-transferable subscription rights to purchase eighteen (18) Units for every
one hundred (100) shares of common stock owned as of the close of business on
September 28, 2010. The purchase price of a Unit was $5. Each Unit consisted of
one (1) share of Zion’s common stock and one (1) warrant to purchase an
additional share of Zion's common stock at an exercise price of
$4.00.
Zion is
currently drilling its Ma’anit-Joseph #3 well in Northern Israel and has
currently reached a drilling depth of approximately 13,123 feet (4,000 meters).
The Ma’anit-Joseph #3 well has targets in both the Triassic geological zone and
the Permian geological zone. The primary target is Permian age lithology,
expected at a depth of approximately 19,357 feet (5,900 meters).
For
updates on the drilling activity please visit Zion’s website www.zionoil.com
Zion’s
common stock trades on the NASDAQ Global Market under the symbol “ZN” and Zion’s
$7 warrants trade under the symbol “ZNWAW”. From December 28, 2010 through their
expiration date of December 31, 2012, Zion's $4 warrants will trade on the
NASDAQ Global Market under the symbol “ZNWAZ". Zion's transfer agent is in the
process of distributing the share and warrant certificates to those rights
holders who participated in the rights offering, either directly or through
their brokers.
Zion Oil
& Gas, a Delaware corporation, explores for oil and gas in Israel in areas
located on-shore between Haifa and Tel Aviv. It currently holds two petroleum
exploration licenses, the Joseph and the Asher-Menashe Licenses, between
Netanya, in the south, and Haifa, in the north, covering a total of
approximately 162,000 acres and the Issachar-Zebulun Permit Area, adjacent to
and to the east of Zion’s Asher-Menashe license area, covering approximately
165,000 acres. Zion’s total petroleum exploration rights area is approximately
327,000 acres.
FORWARD LOOKING STATEMENTS: Statements
in this communication that are not historical fact, including statements
regarding Zion’s planned operations, geophysical and geological data and
interpretation, anticipated attributes of geological strata being drilled,
drilling efforts and locations, the presence or recoverability of hydrocarbons,
sufficiency of cash reserves, the successful establishment of the drilling
subsidiary and the negotiation and execution of definitive agreements with the
current owner of the drilling rig with respect thereto, timing and potential
results thereof and plans contingent thereon are forward-looking statements as
defined in the “Safe Harbor” provisions of the Private Securities Litigation
Reform Act of 1995. These forward looking statements are based on assumptions
that are subject to significant known and unknown risks, uncertainties and other
unpredictable factors, many of which are described in Zion’s periodic reports
filed with the SEC and are beyond Zion’s control. These risks could cause Zion’s
actual performance to differ materially from the results predicted by these
forward-looking statements. Zion can give no assurance that the expectations
reflected in these statements will prove to be correct and assumes no
responsibility to update these statements.
Zion’s
homepage may be found at: www.zionoil.com
Contact:
Zion Oil
& Gas, Inc.
6510
Abrams Rd., Suite 300
Dallas,
TX 75231
Mike
Williams, 214-221-4610
Email:
dallas@zionoil.com