|
Zion
Oil & Gas Newsletter
|
Filed
pursuant to Rule 433
|
|
October
2, 2009
|
Registration Statement No. 333-160871 |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear
Shareholder and/or Friend of Zion...
Here is
an update of our progress during the past week.
Operations on the
Ma'anit-Rehoboth #2 Well
In last
week's update (dated September 25, 2009) I wrote:
"We
have decided, for the present, not to drill any deeper in this well and are now
analyzing and establishing the priorities of the seven zones that warrant
completion testing. The well bore is in excellent condition and
it is also possible that we will drill this well deeper in the
future. Next week, I will comment further."
The
Ma'anit-Rehoboth #2 well was planned as a deep well in order to test the Permian
geological formation and the original planned target depth was 5,500 meters
(18,040 feet).
During
the planning of the well, our geologists, basing their opinion on the available
seismic and other data, believed that drilling to the planned target depth of
5,500 meters (18,040 feet) would result in us testing the Permian geological
layer.
In
September 2009, when our drilling reached a depth of 5,460 meters (17,913 feet),
we had reached a depth less than 1% away from the original target
depth.
However,
during drilling, it became apparent that we were, in fact, drilling into a
'fault line'. (This means that the rock on one side of the fracture had moved
with respect to the rock on the other side.) To make matters more complicated,
there did not seem to have been just one fault line but more likely a 'fault
zone'.
Due to
the presence of the fault zone, the geological formation in which we were
drilling required much more analysis.
After
carrying out that analysis, we decided that, almost certainly, we were still in
the Triassic geological layer and could not determine how much further we would
have to drill to reach the Permian geological layer.
In the
light of the uncertainty regarding the depth of the Permian geological layer at
our well site and knowing that we have found seven zones that warrant completion
testing, we decided that the prudent course, for the present, was to stop
drilling on this well and (i) test the seven zones mentioned, as well as (ii)
carry out further analysis on the geology, using the drilling and logging data
obtained in the last weeks. However, at a later stage, if we decide to, we can
drill this well deeper.
Not only did we have the benefit of our internal experts, Dr. Druckman, Dr. Kashai and Stephen Pierce who between them have over 100 years of professional experience, but we also received input from external organizations and experts, such as the 'The Geophysical Institute of Israel' and Dr. Dorit Korengrin and Dr. Brian Conway of 'The Geological Survey of Israel'.
The Geophysical Institute of
Israel specializes in the application of geophysical methods for mapping
the structure and characteristics of the subsurface; their website address
is:
http://www.gii.co.il/index.php?page_id=1&lang_action=change_lang&to_lang=en
The Geological Survey of
Israel is involved in earth science research and development; their
website address is:
http://www.gsi.gov.il/eng/
Preparations at the site of
the Elijah #3 Well
This
coming week, we plan to start rigging down (at the Ma'anit
site) and start moving the drilling rig and equipment to the site of
the Elijah #3 well.
We have
initiated our security on the area and equipment has now started to arrive on
site.
We have
set the 'conductor pipe'; that is, a short length of pipe, driven into the
ground. Conductor pipe is run because the initial shallow section of the well is
drilled in unconsolidated soil rather than consolidated strata (i.e. solid
formations) encountered deeper.
We
estimate that we will start drilling in approximately the middle of October
2009.
Rights
Offering
This
week, on October 1, 2009, in response to comments received from the Securities
and Exchange Commission (SEC), Zion filed an additional amendment to the
registration statement.
As
amended, the proposed Rights Offering will offer a maximum of 3.6 million shares
of stock at $5.00 for each share of stock. Should the rights offering be fully
subscribed, the company will receive gross proceeds of $18 million.
Under the
(amended) rights offering, stockholders have the right to purchase twenty three
(23) shares of stock for every one hundred (100) shares of common stock owned on
the (to be determined) record date. This is identical to 0.23
subscription rights for each share of common stock owned on the record
date.
If you
were among the many hundreds of our stockholders who did not receive as many
$5.00 shares as you subscribed for in the earlier rights offering, this is your
'second chance' opportunity. Obviously, this offer is open to everyone who is a
stockholder of record on the (as yet undetermined) record date.
The
offering can only 'go effective' (or in plain language, 'begin') when the SEC
has completed its review, so we patiently wait.
CBN NEWS
Interview
On
Wednesday of this week, as you can see in the photographs, Chris Mitchell, the
Middle East Bureau Chief of CBN NEWS visited us, in order to interview John
Brown and visit the site of the Ma'anit-Rehoboth #2 well.
John
explained his vision, gave Chris Mitchell an understanding of the history of
Zion Oil & Gas and then I gave CBN NEWS a guided tour of our operations. It
transpired that some members of the CBN NEWS photographer's family, were
enthusiastic Zion shareholders. I'll let you know when the article has been
published and/or broadcast.
The CBN
NEWS website address is: http://www.cbn.com/cbnnews/
"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, geophysical and geological data and
interpretation, anticipated attributes of geological strata being drilled,
drilling efforts and locations, timing and potential results thereof and plans
contingent thereon and rights offering 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.
NOTICE
Zion Oil & Gas, Inc. has filed a
registration statement (including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the issuer has
filed with the SEC for more complete information about Zion Oil & Gas and
its offering. You may get these documents for free by visiting EDGAR on the SEC
website at www.sec.gov. Alternatively, Zion Oil & Gas will send you the
prospectus if you request it by calling toll free 1-888-TX1-ZION (1-888-891-9466
).
Contact
Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
More
information about Zion is available at www.zionoil.com or by contacting Kim
Kaylor at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX
75231; telephone 1-214-221-4610; email: dallas@zionoil.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~