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| 8-K - ZION OIL & GAS INC | v207624_8k.htm |
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Zion Oil
& Gas Newsletter
January
7, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion
We enter
the 
New Year with high expectations.
New Year with high expectations.As you
can read below, we have not been idle during the past two weeks.
With the
Ma'anit-Joseph #3 well, we have drilled to a depth of approximately 4,505 meters
(14,780 feet) and have acquired open-hole logs that we believe are satisfactory.
We are now setting the casing string and should soon be drilling deeper with a 6
1/8 inch hole.
This past
week Dr. Victor Bariudin (Senior Coordinator - Oil & Gas Production at
Israel's Ministry of National Infrastructures) visited Zion's Caesarea office to
review our most recent well logs. He met with two members of our exploration
team, Dr. Eliezer Kashai and Aaron Kahn and the visit was
satisfactory.
Everyone
is looking forward to the next stage of drilling the Ma'anit-Joseph #3 well, as
we believe that the Permian geological layer holds great promise.
As an
aside, I'll also note that, this week, I received an email from Bill Ottaviani,
Zion's President and COO, noting that:
"The wellsite crew works very hard to
ensure that the work plan is executed effectively and
safely.
The accolades received from Ministry
officials and others who visit our well site and observe our work activity are
testimony to their effort."
Finally,
I'll mention a comment out of a Houston-based energy firm, that controls six gas
exploration licenses located in Israeli waters: "I like Israel. It
has a good business climate, a rule of law and a young and developing oil and
gas industry.”
Turning
to financial matters, on January 3, 2011, we issued a press release concerning
our ZNWAW
warrants.
You can
read the complete press release at the bottom of this update and I have also
made some comments regarding the ZNWAW warrants
below.
If you
hold ZNWAW warrants, you
should carefully review both the press release and the comments
below.
.........................................................................
The
Ma'anit-Joseph #3 Well - The Rig at Dawn
Here is
this week's operational update:
Drilling Operations 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.
As
planned, we have now completed drilling the 8-1/2” hole to a total depth of
approximately 4,505 meters (14,780 feet) and completed the open hole logging
operations for this section of the well. The data obtained from
open-hole logging is used, in part, to assist our geologists in validating depth
correlation to other known geologic markers.
We are
now running a 7” casing liner across the long open-hole section of the
well. This casing will be cemented in place and tested for proper
seal. Once this operation is completed, we will begin drilling the
last section of hole. This will be a 6-1/8” hole that we expect to
drill to approximately 5,900 meters (19,360 feet) and penetrate the target
Permian formation. Drilling of this next section of hole is expected
to begin by mid next week.
Opportunity regarding Zion
Warrants with the trading symbol: ZNWAW
In
January 2009, Zion completed a follow-on offering and issued approximately
666,000 warrants with a $7.00 exercise price.
Since
then, approximately 60,000 warrants have been exercised, so currently, there are
approximately 606,000 ZNWAW warrants in
existence.
In order
to be fair to all of Zion's investors, raise significant additional working
capital for Zion's exploration and development activity in Israel and simplify
our capital structure, we have
temporarily reduced the exercise price of the warrants trading under the symbol
ZNWAW to $4.00 (from the $7.00 exercise price provided by the original
terms of the Warrants).
The
reduced exercise price applies to all of Zion’s currently outstanding Warrants
that trade under the symbol ZNWAW.
The $4.00
exercise price on ZNWAW warrants will be available until 5:00 p.m. Eastern Time
on March 7, 2011, but
please note that after March 7, 2011
and through January 31, 2012, the scheduled expiration date of the ZNWAW warrants, the ZNWAW warrants will be
exercisable at the original exercise price of $7.00 per warrant, after which
date they will expire with no value.
At a
$5.00 Zion (ZN) stock
price, the dilutive effect on all those who hold Zion securities (other than the
ZNWAW warrants) is very
small. Due to the small number of ZNWAW warrants in issue, the
dilutive effect of reducing the ZNWAW warrant exercise price
to the same exercise price as the ZNWAZ warrants is of the order of just 'one
point three percent' (1.3%).
If you
hold the ZNWAW warrants,
please consider this opportunity.
"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 REDUCES THE EXERCISE PRICE OF WARRANTS TRADED UNDER THE SYMBOL
"ZNWAW"
Dallas,
Texas and Caesarea, Israel – January 3, 2011: Zion Oil & Gas, Inc. (NASDAQ
GM: ZN, ZNWAW) today
announced that it has temporarily reduced the exercise price of its outstanding
publicly traded warrants under the symbol ZNWAW (the "Warrants") to
$4.00 (from the $7.00 exercise price provided by the original terms of the
Warrants) until 5:00 p.m. eastern time on March 7, 2011 (the "Expiration Time").
Any and all Warrants properly exercised in accordance with the terms of the
Warrants prior to the Expiration Time will be accepted by Zion at the reduced
exercise price and one share of registered common stock per Warrant will be
issued to the exercising Warrant holder. After the Expiration Time, the $7.00
exercise price included in the original terms of the Warrants will be
reinstituted. Except for the reduced exercise price of the Warrants prior to the
Expiration Time, the terms of the Warrants remain unchanged. The reduced
exercise price applies to all of Zion's currently outstanding Warrants that
publicly trade under the symbol ZNWAW. Holders of Warrants
that desire to exercise their Warrants should contact their brokers and instruct
them to exercise the Warrants prior to the Expiration Time.
As of
today's date, approximately 606,000 ZNWAW Warrants are
outstanding. Zion's common stock is listed on the NASDAQ GLOBAL Market under the
symbol ZN and Zion's
Warrants being reduced are listed on the NASDAQ GLOBAL Market under the symbol
ZNWAW. Zion recommends
that Warrant holders obtain current market quotations for Zion's securities
before deciding whether or not to exercise their Warrants.
Richard
Rinberg, CEO of Zion, stated, "We are pleased to offer our ZNWAW warrant holders the
opportunity to exercise their warrants at a reduced exercise price of $4.00 and
hope that a substantial number of these warrants will be exercised. We want to
be fair to all of Zion's investors and in addition to potentially raising a
significant amount of capital for Zion, we believe that a reduction in the
number of our outstanding warrants will simplify our capital structure and
reduce the overhang of those warrants on the Company's common
stock".
ZION'S
BOARD OF DIRECTORS HAS APPROVED THE WARRANT EXERCISE PRICE REDUCTION. HOWEVER,
NEITHER ZION NOR ANY OF ITS DIRECTORS, OFFICERS OR EMPLOYEES MAKES ANY
RECOMMENDATION AS TO WHETHER TO EXERCISE WARRANTS. EACH HOLDER OF A WARRANT MUST
MAKE ITS OWN DECISION AS TO WHETHER TO EXERCISE A WARRANT.
The
information above does not constitute an offer to buy or exchange securities or
constitute the solicitation of an offer to sell or exchange any securities in
Zion.
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 press release that are not historical
fact, including statements regarding Zion’s operations, are forward-looking
statements as defined in the “Safe Harbor” provision 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:
Telephone:
214-221-4610
Email:
dallas@zionoil.com