Filed
pursuant to Rule 433
Registration
Statement No. 333-164563
Zion Oil
& Gas Newsletter
June 24,
2010
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Dear
Shareholder and/or Friend of Zion
Zion's
Founder and Chairman of the Board, John Brown,
addressing
Zion's 2010 Annual Meeting
Zion's
'2010 Annual Meeting'
took place on Monday, June 14, 2010, in Caesarea, Israel. Present at the meeting
were stockholders who had travelled to Israel from as far away as Finland and
California, USA; I believe that everyone attending enjoyed the very positive
spirit of the meeting.
Mr. Victor Carrillo (L) and Zion's CEO, Richard Rinberg
(R)
One
V.I.P. guest present at the meeting was Victor Carrillo (pictured above), the
Chairman of the Railroad Commission of Texas. The Railroad Commission is the
primary regulator of the oil and gas industry in Texas and it was a great honor
for Zion to have Chairman Carrillo present at our meeting.
The
business formalities were duly carried out and the resolutions were successfully
carried. After the formal part of the meeting, I gave my report of Zion's
activities during the prior twelve months and then Zion's President and Chief
Operating Officer, Bill Ottaviani, gave his report.
Zion's
President and COO, Bill Ottaviani
You can
review my report (i.e. the Chief Executive Officer's report) and the Chief
Operating Officer's report, presented to the meeting, on the Investor Center
section of Zion's website. If you want to do that, please click
here.
John
Brown being interviewed at Ma'anit
The day
after Zion's annual meeting, as you can see in the above photographs, "GLOBES", one of Israel's
leading business papers interviewed Zion's Founder and Chairman of the Board,
John Brown, for a lead article in their weekend edition, (to be published in
Israel, this weekend).
Christians United for
Israel
You may
be interested to learn that, as we did in 2008, Zion Oil & Gas will be
sponsoring the “Night to Honor Israel” banquet at the Fifth Annual
Washington-Israel Summit of Christians United for Israel (CUFI). However, this
year, Zion will also be sponsoring CUFI's Ambassadors' Reception.
The
Summit will take place in Washington, D.C. during July 20th to 22nd and the
banquet will take place on Wednesday evening, July 21, 2010. Pastor John Hagee
and Israel’s Ambassador to the U.S., Michael Oren, are scheduled to speak at the
banquet.
It is
expected that John Brown, Zion’s Founder and Chairman, will be interviewed by
Pastor John Hagee during the Summit and that the interview will be broadcast on
the Daystar Television Network during the “Night to Honor Israel”. In addition,
CUFI will broadcast a video about Zion at the banquet’s pre-event, and the
banquet’s proceedings will be telecast by live-feed over the Daystar Television
network. If you want to read the press release, please click here.
RIGHTS
OFFERING
The
rights offering will soon terminate. This opportunity is only available until
5:00 p.m. EDT on June 30, 2010, so if you want to subscribe but have not yet
done so, then you will need to act without delay.
Under the
rights offering (see www.zionoil.com/investor-center) Zion stockholders, at the
close of business on May 6, 2010, were issued, at no charge, the
following:
ONE
subscription right for every TWO shares of stock owned (as of the close of
business on May 6, 2010).
Each
subscription right entitles the holder to purchase one share of Zion stock at a
price of $5.00, irrespective of the market price at the time of
purchase.
The
subscription rights may be exercised at any time prior to the end of June 2010.
However, after 5:00 pm EDT on June 30, 2010, unexercised subscriptions rights
will expire with no residual value.
Please
note that if you want to exercise your rights and you hold your stock in a
brokerage account, then you will need to contact your broker to determine when
and how you can exercise your rights, as each individual brokerage firm has
their own timeline and procedures for processing subscriptions.
As
detailed in the press release, we plan to use the proceeds from the rights
offering: (a) to purchase a 51% interest in a new yet to be established company
(Zion Drilling, Inc. that will own a 2,000 horsepower drilling rig), (b) to
drill further 'deep' exploration wells on Zion's licenses in Israel (in
continuation of Zion's oil and gas exploration efforts) and (c) for general
corporate purposes.
....................................................
With
regard to 'Operations', we are now preparing for the next well, as you can
read.
Ma'anit-Joseph #3 Well (M-J
#3)
We
continue moving forward through the many permitting requirements for the M-J #3
well and are securing all the necessary services and equipment to ensure an “on
time” spud date.
When the
permitting process for this well began, we estimated a 5-month time frame would
be needed to secure the necessary permits before well site construction could
begin. As it is turning out, we need every bit of this time to
navigate through the complex permitting process for a new well.
We
currently plan to begin well site construction in early July 2010. The
construction of the concrete platform will take approximately four
weeks.
On the
equipment and services procurement front, we are making steady
progress. All the equipment needed on site by our planned spud date
has been ordered and delivery confirmations have been received. This
first large order of equipment is primarily for well casing and wellhead
equipment – equipment that often requires a long delivery lead
time. We are expecting the first shipment of this equipment within
the next few weeks.
Additionally,
most of the major services we require for drilling have already been awarded
through our bidding process and service contracts are in the process of being
prepared.
All in
all, our work progress is steady and we remain on schedule for an August 2010 spud date for the
M-J #3 well.
The Issachar-Zebulun Permit
Area
On June
16, 2010, field acquisition of new 2-dimensional seismic in the Jordan River
Valley section of our Issachar-Zebulun permit area was successfully
concluded. Approximately 30 km of new seismic data was collected on
Zion’s behalf by the Geophysical Institute of Israel
(GII). Preliminary indications suggest that data quality is ‘good’.
This data
will soon be “processed” by a geophysical consultant in the United States into
usable graphic imagery that can then be “interpreted” by our geologists in their
investigation for future drilling prospects. The processing and
interpretation of this data is expected to be finalized by October
2010.
Elijah #3
Well
As
previously noted, the Elijah #3 well was drilled to a depth of approximately
10,938 feet (3,334 meters) when the drill string became stuck within the Asher
Volcanics section of the hole. After recovering a significant portion of the
stuck drill pipe, progress in recovering the remainder of the pipe slowed and
the decision was made to temporarily suspend drilling operations pending further
analysis of the situation.
We are
currently acquiring approximately 32 kilometers of additional field seismic data
that will help us to resolve certain questions regarding the geology of the area
surrounding this well.
GII began
field acquisition of this seismic on June 16, 2010, and have already finished
collecting data in one of three “lines” planned. Each of the three
planned seismic lines is geographically oriented in a different direction (for
example, one line may be east-west oriented and another may be north-south
oriented). This is to ensure that our geologists have sufficient areal coverage
of the geologic region to be investigated.
As with
the seismic data collected in the Issachar-Zebulun permit area, this data will
also need to be processed and subsequently interpreted. In this case,
however, we are not looking for new prospects but instead looking for greater
clarity in the geology that underlies our Elijah-3 well.
Ma'anit-Rehoboth #2 Well
(M-R #2)
This well
is currently temporarily suspended for possible future use as an offset well to
the Ma'anit-Joseph #3 (M-J #3) well (see above) which is to be drilled a short
distance away.
It is
important to note that we are drilling to the deep "Permian" structure in the
M-J #3 well; whereas the various intervals tested in the M-R #2 well consisted
of shallower and younger age rocks. As such, and despite the relative
proximity of these two wells, the results of the M-R #2 well tests are not
correlative to what we expect in the Permian of the M-J #3 well.
The Russell 3000 Index
Rebalancing
The
Russell 3000 is a value weighted index that measures performance of the top
3,000 stocks of the investable U.S. equity market. Zion was placed on the index
as of June 26, 2009. In June of every year, the index is
reconstituted,
On
Friday, June 25, 2010, after the stock market close, the 2010 reconstitution of
the Russell Indexes will take place, and Zion may not be part of the 2010 index.
In connection with the reconstitution, NASDAQ has advised us that, in the short
term, there may be increased trading volumes in Zion's stock trading and
volatility in Zion's stock price.
As the
late great Benjamin Graham noted, 'In the short term the market is a
voting machine, in the long term it is a weighing machine".
Zion's
management team are committed to building long term value into
Zion Oil & Gas, Inc. and try to ignore fluctuations in Zion's stock price,
caused by events over which we have no control.
"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, the
procurement of needed drilling permits, drilling efforts and locations, the
presence or recoverability of hydrocarbons, the sufficiency of cash reserves,
ability to raise additional capital, the successful establishment of the
drilling subsidiary and the negotiation and execution of definitive agreements
with AME (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.
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
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More
information about Zion is available at www.zionoil.com or by contacting Michael
Williams at Zion Oil & Gas, Inc., 6510 Abrams Rd., Suite 300, Dallas, TX
75231; telephone 1-214-221-4610; email: dallas@zionoil.com
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