Filed
pursuant to Rule 433
Registration
Statement No. 333-164563
Zion Oil
& Gas Newsletter
July 9,
2010
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Dear
Shareholder and/or Friend of Zion
Since my
last update to you (on June 24, 2010) we have made much progress on the drilling
front. In addition, today, we have made an announcement about
management restructuring and an addition to Zion’s Board.
As you
can read here,
we announced that Kent S. Siegel, a member of Zion’s Board of directors since
November 2003, has been appointed as Chief Financial Officer and Senior Vice
President. Mr. Siegel replaces Sandra Green, who has resigned from the Company
by mutual and amicable agreement. I thanked Sandy for her many years
of dedicated work and wished her well for the future.
In
addition, Patti Beals has been appointed Chief Accounting Officer and Ilan
Sheena has been appointed Vice President and Managing Director of Zion's offices
in Caesarea, Israel. Also, we are welcoming to the Zion Board, Marc
Singer who brings a wealth of business experience to Zion.
The
vibroseis trucks go cross-country in Israel.
The
vibroseis trucks on the beach by the Mediterranean sea.
The
vibroseis trucks in place, on the beach.
Close-up
of the vibroseis truck's pad that is lowered from the vehicle to the surface and
then vibrated to generate seismic waves.
As you
can read below, we have successfully concluded the acquisition of field seismic
in both our Asher-Menashe License area and our Issachar-Zebulun Permit area. The
raw data that has been collected is now being processed for interpretation, both
here in Israel and in Houston, Texas.
I am
pleased to report that the data acquired does seem to be of good quality. This
was not easy to achieve, as in the Asher-Menashe license area, there are some
major roads. One night, we arranged for the police to stop the flow of traffic,
so that the traffic 'noise' would not affect the seismic
acquisition.
Even with
the latest computer technology, the data processing will take a number of weeks
to produce results and then the resulting information will need to be carefully
built into our geologic computer model by Zion's geologists. (As a Zion director
commented: "If it was easy,
then anyone could do it...").
As a
result, we should be able to have a much better picture of any geologic
structures under our exploration areas and therefore make better decisions
regarding our future exploration plans.
RIGHTS
OFFERING
The
current rights offering was originally scheduled to terminate on June 30, 2010.
However, as preliminary results indicated that the offering had not been fully
subscribed, we decided to extend the offering by approximately two weeks, in
order to allow more time for subscriptions to be submitted. The new scheduled
termination date for the rights offering is Thursday, July 15,
2010.
Although,
to date, we have raised significant amounts from the rights offering, we believe
that the uncertain market conditions in the past weeks may have impacted
negatively on our rights offering.
We want
to move forward with further work without delay, so we would like to secure the
maximum funds possible.
Almost
certainly there will not be a further extension. After the
termination date of Thursday, July 15, 2010, we plan to close the offering and
issue the shares as soon as practicable, most likely within two weeks following
the close.
If you
want to read the press release regarding the extension of the termination date
of Zion's rights offering, please click
here.
Christians United for
Israel
As
previously noted, 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.
With
regard to 'Operations', we are now preparing the concrete platform on the new
site of the next well, as you can read.
Ma'anit-Joseph #3 Well (M-J
#3)
A very
important milestone occurred this week when we began site construction for the
M-J #3 well. This milestone follows the significant amount of effort
made by our staff during the past months in securing the necessary permits
allowing us to proceed with construction of the well site.
Our
general contractor for the site construction work is a local Israeli
construction company well-known for their major infrastructure development work
throughout Israel. Consistent with best practice, we bid the
construction work out to several contractors and made our selection based on the
company expected to provide the greatest overall value to Zion.
Site
construction work began on July 4 (Independence Day in the USA) and is expected
to be completed within one month. As you can see from the photos
below, much activity has already occurred.
In
addition to beginning our well site construction, we have almost finalized the
selection of vendors who will provide the major services associated with
drilling the M-J #3 well. Finally, we have already begun receiving
equipment for the new well from our selected material providers. Both
material and service selection for this well were based on a comprehensive bid
process designed to provide Zion with the best possible value.
With the
start of well site construction now behind us, our next major milestone is
mobilizing the drilling rig from our Ma’anit-Rehoboth #2 well site to the newly
constructed M-J#3 well site. We will begin mobilization of this rig
immediately following site construction activities.
All in
all, our work progress remains steady and we continue to be on track 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). This data
is now being "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.
On June
30, 2010, GII successfully concluded field acquisition of approximately 25 km of
new 2-dimensional seismic data within the Elijah #3 project
area. This data will help us to resolve certain questions regarding
the geology of the area surrounding this well.
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.
Processing
of the Elijah #3 seismic data is now underway and is being done by both GII and
a geophysical consultant in the United States.
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 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.
"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, 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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